A steady start to the year for revenue performance has been reported by Rank Group Plc despite pressures from higher business costs and additional taxation on gaming machines. Rank’s Mecca Bingos will be further affected in Scotland by the impact of the smoking ban. Rank, just as Stanley Leisure, has seen a growth of revenue at its casinos since gaming deregulation last October. Grosvenor Casinos generated a 12% growth in revenue with a 14% rise in admissions.

Spending is up 2% at Mecca Bingos but a 2% fall in admissions has meant that bingo revenue remains flat. Rank operates 14 bingos in Scotland where the smoking ban was introduced one month ago. It is too soon to fully judge the impact this will have, although admissions have been slightly reduced since then. The company’s 11 bingos in Spain will also face a partial smoking ban from September.

Gaming machines at Grosvenor and Mecca venues will pay an estimated £5 million (US$8.9 million) of additional VAT as well as approximately £750,000 (US$1.3 million) in higher Amusement Machine Licence Duty. Rank’s Hard Rock portfolio continues to grow, with up to 7 new cafés expected to open during the course of the year. The 2 Seminole Hard Rock Hotels & Casinos in Florida continue to perform strongly.

The continued growth of online gaming and stronger sportsbook margins has given Rank’s Blue Square a positive start to the year. The changes to legislation, some with a positive affect on revenue and others with a negative affect, have been too recent to make a full evaluation. Many of the extra casino visitors are playing the gaming machines rather than table games, so as yet there has been little increase in table revenue. Provincial casinos have seen bigger rises in visitor numbers than the London casinos.
(E-04.26.06)

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