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How on and offline gambling boosted the leading leisure group

24th January 2017 Print
Rank Group

In many ways, Leisure group Rank is a throwback to a previous generation. The British owner of established gaming brands such as the Grosvenor Casino chain and Mecca Bingo, it has historically relied on bricks and mortar outlets for the majority of its revenue while online casino platforms account for just 13% of all money earned.

The nature of the market meant that this could not continue indefinitely, however, so Rank adopted a two-pronged strategy to help drive future growth. Firstly, it invested heavily in the revival of the classic but often maligned British bingo hall, modernising establishments and improving the experience available to players.

The firm has also begun to increase its reliance on online gaming revenues, following the lead of contemporary market leaders such as William Hill. As a result of this, online revenues increased by an impressive 14% during last year as the number of gamblers accessing games virtually increased by 50% in the same period of time. This helped the brand to recover from stringent UK tax sanctions imposed on Gibraltar while also laying a foundation for future growth and success.

Interestingly, Rank's range of bingo halls also returned to sales growth for the first time in five years, lifting first-half revenues by 5% on a like-for-like basis. These factors contributed to a significant increase in sale over the course of 2015, with revenue rising from £351.7 million to £370.1million in the final six months to December 31st alone. Further inspection of these numbers revealed that group operating profit rose by 11% in this time, from £41.7 million to £46.1 million. This is a relatively large increase for such a short space of time, highlighting the success of strategic thinking over knee-jerk reactions.

Make no mistake; however, it is the rise in online gaming revenues that offers the group the most significant hope for the future. After all, this is the direction that the gambling market is heading in, and Rank's previous reluctance to drive virtual casino revenue was a key contributing factor to the brands' lacklustre performance. This is now a thing of the past, and with plenty of scope for further growth in this segment the firm may well be looking forward to more sustained success over the next 12 months and beyond.

The online casino industry is booming, globally, from the UK to Canada (follow this Canadian site for more). In terms of the merits of strategic thinking in business, Rank has undoubtedly the template that others should look to follow. Even if we think within the narrower confines of the gaming market, Rank’s decision to enhance both online and offline sales created greater room for error within the firm and undoubtedly drove higher revenues overall.

This therefore makes perfect sense for similar brands, especially given that there remains a viable market for offline gaming and gambling. While this may change over time, Rank have undoubtedly set an example for other leisure groups and casino chains to follow in the year ahead.

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Rank Group