Mecca's hit with Rank profits
23rd October, 2007
The knock on effect of the new gambling laws combined with the new smoking laws has seen attendance in bingo halls fall dramatically. The last time the industry suffered a slump like this was when the National Lottery was introduced 13 years ago. However the industry recovered from that over time and they will probably bounce back again, although it is taking its toll on their profits.
Rank Group which owns Mecca Bingo, announced that profits have fallen by 19% since September 1st following the introduction of laws limiting the number of Section 21 high value jackpot machines. Each club used to have 13 of these machines, but this has been reduced to just 4. The machines accounted for over £70 million of revenue for Rank Group. Weekly visits to Rank clubs have fallen 15% to just 300,000. Rank Group also own Grosvenor Casinos. Their top share price has dipped - by a whopping third.
Rank is trying to move ahead and keep bingo modern. They have introduced handheld electronic terminals and have an online presence. New legislation ahs brought with it benefits as well as problems. The new legislation has allowed for roll over jackpots and so they have given away 3 £1 million prizes since September.
The bingo industry has been hit very hard, while bookies have benefited from longer opening hours and the introduction of blackjack and video poker machines.
Bingo firms also have to contend with paying both VAT at 17.5% AND 15% Gross Profits tax whilst bookies only have to pay gross profits tax.
