April News from Rank Group
Monday, 22 April 2013 | Written by Carol Dian
After months of speculation and discussion on the proposed acquisition of Gala Coral Group by Rank Group, owners of Mecca Bingo, the deal is finally set to go through. The move follows the eventual approval by the Competitive Commission (CC) allowing the move to go through. The merger involves Gala Coral purchasing Gala, including 19 casinos and three non-operating licenses for a sizeable £179 million.
The arrangements of the deal were almost all in place, but the Competitive Commission made it clear in their February report that Rank Group was required to sell its cold license in Edinburgh to Global Gaming Ventures Limited (GGV) before the deal could be confirmed.
Rank Group agreed to acquire Gala Coral in May 2012, but the two firms have been waiting on approval from the regulatory organisations. The initially proposed deal was worth £205 million. It was a concern that this merger would create a monopoly and put Rank Group in too strong a position going forward, with a hugely dominant market share and a detrimental effect on competition. The amended agreement, worth £179 million, was finally reached in compliance with the Competitive Commission and excluded Gala’s casinos in Aberdeen, Bristol, Cardiff, Stockton-On-Tees and Gibraltar.
The deal will make Rank Group the largest casino owner in the UK, with 54 operating venues and 12 non-operating licenses. Rank has stated that although the deal is funded by debt, it is expected to increase company profits in the first whole financial year.
Rank Group Calls for Rethink of Gambling Legislation
Rank has pleaded for the government to reconsider its approach to gaming policy on the grounds that it will promote a greater social and economic benefit to the UK.
The Rank Group believes that a rethink to the current approach to the regulation of gambling will be beneficial to supporting economic growth. The casino operator published its ‘Game Plan’ on 15th April 2013 and in it, Rank chief executive Ian Burke wrote that the role of gambling legislation in the UK should not be simply to minimise harm caused, but also to maximise societal and economic benefit and minimise costs. He also claimed that common misconceptions surrounding the gambling industry have restricted growth of the industry as well as obstructing important discussion on how to deal with the issue of problem gambling. Burke’s game plan intends to propose an altered approach to gambling policy as well as the relationship between government and the industry.
Rank Group to Open New Venues
In a bid to offer a fair deal to encourage a reduction of tax duty from 20% to 15%, Rank have committed to the Treasury that they will open new Mecca bingo halls for the first time in years to create new jobs. In response to the Treasury’s claim that this cut would harm tax revenues, Rank has claimed that the consequential investment would raise revenues by £35million over four years.
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