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Feb
12th

Internet Bingo Keeps Rank Group Profitable

While internet bingo may lack the sociability of a trip to the local bingo hall the online version of the game has been very profitable for British bingo operator Rank Group. Rank operates Mecca bingo halls throughout the UK and the Mecca online bingo site. In 2007 when the national smoking ban went into effect bingo halls were decimated and many were forced to close. Giant operators such as Mecca and Gala launched internet bingo operations to survive and remain profitable. Years after the smoking ban was imposed bingo halls are full again and some operators have managed to make the game attractive to a younger tech savvy crowd of players.

The benefits of internet bingo became apparent after Rank said that a cold snowy January had cost the company 3 million pounds as British players opted to not to venture out in the inclement weather to bingo halls and casinos. Operating profit from internet bingo was 11.4 million pounds just above the 11.1 million generated by Rank’s land based Mecca bingo halls. Weather has always had an effect on the land based and internet bingo industries. Two years ago a series of severe arctic storms made travel impossible in many parts of the UK. While land based bingo halls suffered from a lack of players many internet bingo operators were able to post record fourth quarter profits because of the weather.

Rank, which is majority owned by Malaysia’s Guoco, reported a 4% decline in pretax profits to 31.3 million pounds during the six months prior to December 2012. Rank’s Blue Square betting operation was a drag on the company and posted losses during the same period. Many parts of Britain received heavy amounts of snow in early January and analysts fear that the bad weather will hurt economic activity and push the UK back into recession. Pub groups Enterprise Inns and Mitchell & Butlers said the recent weather had hurt sales. Rank Chief Executive Ian Burke told reporters “Allowing for the slow start to the second half we remain confident in our prospects for the remainder of the year and in our longer-term growth strategy.”

Rank operates 35 Grosvenor Casinos and 100 Mecca bingo halls located throughout the UK. Rank’s profit growth in its online operations mirrors the gambling industry as a whole where online gaming is the fastest growing sector of the gaming market in the UK. Rank is currently reviewing the future of its Blue Square division which reported an operating loss of 4.8 million pounds. Rank has cut spending on marketing for Blue Square. Rank chief Burke said “There were 11 or 12 competitors advertising and that spending just wasn’t cutting through.” Rank is currently trying to buy Gala Coral’s casino division. Once sold Gala plans to focus on bingo.