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From pre-war flour miller to giant leisure conglomerate to struggling bingo operator, the fortunes of the once mighty Rank Group are looking decidedly iffy. In its heyday, Rank owned Pinewood Film Studios, Odeon Cinemas, Butlins Holiday Camps, Xerox photocopiers, a stake in Universal Studios theme park in Florida, and Hard Rock café.
As the walls closed in, one by one Rank reduced its asset portfolio. With Hard Rock Café the last of the old guard to go, sold last year for £480, the group’s decision to concentrate on Mecca Bingo, Grosvenor Casinos and Blue Square online gaming looks like a bit of a gamble.
Ian Burke, with no luck at all, became Rank’s Chief Executive just in time to be faced with Gordon Brown’s final budget in which gambling taxes on bingo were hiked. Operators must now pay 17% VAT as well as a 15% levy on gross profits, i.e. profits before operating expenses are deducted to give net profit. Then to top things off, along came the smoking bans, beginning in Scotland the month that Burke joined Rank’s board.
The biggest challenge to hit the industry in 40 years, some have called the smoking ban legislation. Already, smoking shelters have been built outside 80 Mecca bingo halls, while many halls too costly to modify and with too little patronage have been closed down.
This causes Burke concerns beyond Rank’s ailing bottom-line. “In many towns the closure of the local bingo hall causes a serious loss of social amenity,” he said. “Communities are suffering, and customers are angry that bingo is being picked on by the government."
Typical of the disaffected many is Olive Moss, 86. Olive is a bingo stalwart of more than 50 years. With her husband gone, she says she’d have little to keep up her interest in life and nowhere to meet people, were it not for the local bingo hall. “I really don’t know what would happen to me,” she said.
A study on bingo club closures and their social impact was carried out in August by consultancy firm The Henley Centre. According to their report, deprived urban locations and small rural venues have been hardest hit by the spate of closures. “Not only have these communities suffered a loss of pastime, but they’ve also lost a crucial social support network,” a spokesman said.
Meanwhile Rank’s share price has plummeted 24% since the beginning of this year. While Ian Burke has plans to go upmarket with Rank’s casinos, and has cut costs by trimming 200 jobs, he and his corporate colleagues are courting local MPs as well as Chancellor Alistair Darling, hoping for a reversal of the double tax on bingo operators.
The Prime Minister has assured Paul Talboys, Bingo Association Chief Executive that he is aware of the industry’s situation, and intends to confer with the Chancellor and Sports Minister Gerry Sutcliffe ahead of next year’s budget.
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