In what could be seen as an ambitious push for revenue growth, The Rank Group’s Grosvenor Casinos are setting their sights on a significant financial benchmark. John Harris, the company’s executive, revealed at a capital markets event on the previous day, November 30th, that the casino chain seeks to ramp up its weekly income to a minimum of £7 million. He noted that this target would be pursued through strategies that are within the company’s purview and would precede any advantages gained from the forthcoming review of the UK Gambling Act as well as before any major real estate modifications.
Demonstrating confidence in his company’s growth trajectory, Harris suggested that eventual revenues are projected to surpass the £7 million weekly figure in the medium term. The latest financial outcomes signal a sturdy starting point, with Grosvenor venues reporting an £84.2 million revenue in Q1 of the fiscal year 2023/24.
Harris didn’t limit his optimism to brick-and-mortar establishments, as he also anticipates a substantial uplift in digital revenues, with an expected growth ranging from 8% to 12% over the forthcoming years. He underscored that such financial progress, coupled with operational leverage and a concerted focus on efficiency, will contribute to enhanced profit margins.
The Rank Group’s momentum doesn’t stop with Grosvenor Casinos. Harris made a bold statement about the future of the company’s Mecca Bingo halls, vowing to steer Mecca venues from a £5.8 million loss last year to a robust double-digit operator profit in the medium term.
Addressing the Gambling Act review white paper released in April, he suggested that the company stands to benefit significantly from the legislative updates and has already been actively participating in several consultations. Harris primarily highlighted the anticipated boon of being able to nearly double the number of gaming machines across Grosvenor locations, as permitted by the new regulations outlined in the white paper.
This positive outlook extends to Rank’s UK bingo operations, where an adjustment of rules—the 80:20 rule—would now accommodate an equal proportion of Category B and C/D gaming machines. Moreover, Harris mentioned that the introduction of electronic payments in casinos and bingo venues would streamline the customer experience, making their journey “much simpler.”
Jon Martin, Rank’s chief operating officer, provided further context by citing Rank’s current market share in bingo and casino operations. The group intends to capitalize on the strength of its venue brands and maximize cross-channel opportunities that they present. However, the group is mindful of the challenges too, such as the impact of potential maximum stake limits for online slots and an increase in the statutory levy, with rates expected to rise from a uniform 0.1% today to 0.4% for Grosvenor casinos and 1% for the UK digital business by 2027.
On the regulatory front, the GB Gambling Commission has initiated the second round of consultations for the white paper’s proposals. The current focus is on replacing the existing requirement to contribute to Research, Prevention, and Treatment (RET) with a statutory levy, a change that Rank is preparing to implement starting in the new year.
Discussing the pandemic’s effects, particularly on bingo operations, Harris disclosed that the number of Mecca venues contracted from 80 to 55. This proactive resizing was deemed crucial to achieve profitability in the post-pandemic market landscape.
Exploring opportunities beyond the UK, Rank’s international managing director, Enric Monton, shed light on the company’s aspirations for expansion. He suggested that Rank is poised to enter the Portuguese market as the first online bingo operator before the end of its fiscal year, given the rapid growth of the online sector there. Additionally, Monton expressed confidence in the company’s position within the Spanish market, emphasizing potential growth in casino and sports segments, as well as through novel offerings like live bingo.
