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Bingo Halls and Digital Platform Boost Rank’s Revenues
By Sam Goode - September 08, 2016
British gambling and leisure company Rank Group continues to see signs of growth as more visitors flock to its gambling halls.
Working to broaden their reach, Mecca bingo chain owner Rank Group are taking steps to appeal to the younger generation.
In the summer, Rank Group plans to launch two new centre bingo halls in the UK to reach a “new generation” of gambling fans.
According to Rank Group chief executive Henry Birch, the company will open smaller clubs that will target younger gamblers. Operating outside the Mecca brand, these clubs will become a more convenient alternative to conventionally large bingo halls that are more difficult to access.
Bingo Through Tough Times
In the last decade, bingo as a hobby has seen difficult times. The smoking ban enacted in England in 2007, and in Scotland in 2006, had a substantial impact. As well, the recession, changes to legislation restricting money-spinning gaming machines and harsh tax rules have all played a part.
The bingo industry was hit hard with these issues, to the point where a large population of bingo halls were closed down. Rank Group, for instance, had 120 clubs ten years ago, but downsized to 91.
Bingo Revival Through the Younger Generation
Now that bingo has embraced a generation of twenty-somethings, it is starting to see some positive changes.
Despite higher bingo taxes, revenues at Rank Group’s subsidiary Mecca, rose two percent to £118.7m.
According to Rank Group, after replacing 5,600 Mecca Max units, they saw growth in customers’ spending-per-visit.
Birch shared, “Bingo can offer a different experience in an age when people are always looking at their mobile phones.”
He added, “It allows people to get out, congregate and play a game in the same place as hundreds of other people. It is quite unique in that sense.”
Digital Gambling’s Contribution to Rank Group’s Growth
According to Birch, Rank Group’s “star performers” were its digital gaming platforms, like the Mecca online bingo site.
As gamblers increasingly turn to online bingo and other digital platforms, sales at Rank Group continue to grow.
In a regulatory statement, Birch said, “Growth in digital revenue – at 21% – is particularly pleasing of digital gaming taxes versus the seven out of 12 months just passed and our comparators will be that much more difficult coming out of a strong year.”
Moreover, even after the 15% gambling tax was introduced in December 2014, the digital revenue grew by 14% by the beginning of 2016.
By March 2016, Rank Group’s interim dividend will increase by 13% to 1.8% a share.
Birch shared, “2016 will see us deliver significant new platforms, new functionality and new products, including a new digital platform, a new retail casino management system, new poker and sports betting products and a new retail bingo format – all of which will drive improvements across our company.”
According to Shore Capital analyst Greg Johnson, there will be further strong performances from the digital platform as Rank Group launches the new platform and product by the end of the quarter.
Rank Group’s Strategy
According to Birch, Rank Group’s strategy for the year is focused on digital growth and a multi-channel future.
He said that despite the slower growth in some sectors of gambling, the company will still see a sustained progress in the industry.
Birch shared, “I have no doubt that we will get there as an industry and that customers will place greater value on companies who can offer a joined up retail and digital experience than on digital-only operators.”
Birch further noted that Rank Group will be able to provide a multi-channel experience with its membership-based retail businesses, loyalty programmes and strong service culture.
So far, this strategy has been rendering positive results as the FTSE 250 gambling company reported group sales that rose by 5% to £370.1m. Despite the effects of a new gambling tax, Rank Group continues to operate with profit rising by 11% to £46.1m.
Mecca’s Online Bingo Games
Regardless of Rank’s revenue improvements, it is still undeniable that bingo has entered a new era where players often prefer to play bingo at home than to go out and visit a gambling hall. Fortunately for Rank Group, they offer an alternative by providing players the option to play bingo online on laptops or mobile devices. Rank’s Mecca bingo site offers a variety of bingo games, including the classic 75-ball, 80-ball and 90-ball games. Bingo bonuses and specials are also widely offered on their site along with unusual bingo games like The X Factor Bingo, Rainbow Riches Bingo and Britain’s Got Talent Bingo, among others.