Rank Attracts New Players to Casinos and Bingo Halls

British gaming group Rank recently reported an 8% increase in the company’s first half pretax profits. Rank has benefited from an increase in customers after widespread marketing campaigns designed to attract a wider audience to Ranks Grosvenor casinos and Mecca Bingo halls throughout Britain. The company has been targeting younger players and the move has been successful. Rank chairman told reporters from Reuters “We have attracted significantly more customers under 35 and more women.” Since last year many gaming companies have focused their marketing efforts on casual players.

Currently Rank operates 35 casinos and 103 bingo halls in Britain. Mecca bingo also has a major online bingo operation. Rank has tried to broaden their appeal after revenues were hit by the smoking ban and the economic downturn. Rank’s Spanish operations were pressured after the passage of an across the board smoking ban. Presently 74.5% of Rank is owned by Malaysian based Guoco. Recently Rank posted figures that showed that pretax profits were 32.5 million pounds ($51.4 million USD) during the six months prior to December 2011 and that revenues were up 3% to 296 million.

The number of players at Mecca bingo halls rose 50,000 for a total of 700,000 during the same period and Grosvenor casinos attracted 762,000 punters, an increase of 61,000. The rise in revenue and player numbers helped to offset the declines in revenue and profits at Ranks’ Top Rank Espana which was hard hit by the smoking ban. Rank chairman Burke expressed concerns about the Spanish economy. Burke told reporters “We are not assuming that Spain will come out of the euro. The more immediate risk is the state of the Spanish economy. With unemployment at over 20 percent, it faces an even tougher environment than the UK does.”

Last month Rank announced it was in talks with Gala Coral. Burke said the talks are still in the early stage. The talks have been the subject of much speculation and rumor has it that Gala wants to sell its casino operations and focus on the company’s bingo operations and bookmaking. Gala also has a large internet bingo operation in the UK. In March Rank will go to court to see whether the company will have to pay 31 million pounds of VAT sales tax on slot machines. Last November the European Court of Justice ruled that Rank paid too much VAT tax. Rank currently has 275 million pounds in outstanding VAT claims that could be repaid to the company. Stock analysts give Rank a thumbs up. Peel Hunt analyst Nick Batram rates Rank stock as a ‘buy’ and stated “Over the next 12 months the group will either succeed in acquiring Gala Casinos, or indicate its position on repaying excess capital back to shareholders. Either outcome should be positive for the share price.”

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