The new Gambling Act, once thought to herald a new era of deregulation in the British gaming industry, has proved less than helpful for the Rank Group. In its trading statement published on Friday the company admitted that both its Mecca Bingo and Grosvenor Casinos had suffered ‘significant deterioration’ over recent weeks. This was blamed largely on the required removal of around 950 gaming terminals following the implementation of the Gambling Act 2005 on 1 September this year and the smoking ban implemented on 1 July 2007.

The profits warning by Rank led to a 21% decline in share price. The company said that the coincidence of a number of external factors will mean a period of volatility and that there is ‘a lack of visibility unprecedented in the UK gaming industry.’ Rank’s interactive sector Blue Square was the one bright spot for the company, with revenue 38% ahead of the comparable period of 2006. Group operating profit for the full year is expected to be significantly lower than in 2006.

The bingo industry loss of most fruit machines with £500 jackpots plus the smoking ban could make bingo halls things of the past, and turnover at Mecca Bingo has dropped 19%. However, Rank is building gaming shelters outdoors for smokers and introducing new games, including millionaire bingo. Analysts believe that Rank Group could once again be attractive for a takeover by a gaming industry rival. (E-10.15.07)

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