Rank Group has reiterated its opposition to a potential increase in the UK's machine games duty (MGD) ahead of the country's upcoming budget. In a statement accompanying its latest financial results, the casino and bingo operator emphasized the risk that higher MGD poses to its business and the broader land-based gaming sector.
Concerns Over Economic Impact
Chief Executive Officer Richard Harris warned that any rise in MGD would drive up costs, reduce the viability of venues, and potentially lead to closures and job losses. He argued that such a move could also decrease tax receipts and halt further investment in the sector. Harris cited the UK Treasury's previous recognition of these economic arguments, suggesting that with supportive conditions, operators like Rank can contribute positively to the government's growth agenda.
Closures and Financial Performance
During the most recent quarter, Rank closed three Grosvenor casino venues in Swansea, Reading, and Sunderland, citing their lack of medium-term economic viability. Despite these closures, the company reported a 6% increase in like-for-like net gaming revenue to £108.1 million across its venues, with gaming machine revenue rising by 14%. Overall group revenue grew 5% to £216.1 million, with similar growth seen in Rank's digital and Spanish operations.
Potential Industry-Wide Effects
Harris has previously warned that a significant MGD hike, such as the doubling to 40% proposed by the Social Market Foundation, could force the closure of a large portion of Rank's estate and result in substantial job losses. He has also suggested that smaller or less resilient operators may not survive such a change, potentially impacting local communities and the wider industry.
Why This Matters for the Industry
The debate over MGD is significant for operators, affiliates, and suppliers in the UK gambling sector. Increased tax burdens could lead to venue closures, job losses, and reduced investment, shrinking the land-based market and affecting supply chains and affiliate revenue streams. For regulators, the challenge will be to balance fiscal objectives with the sustainability of the sector and the social impact of venue closures.
Key takeaways
- Rank Group is warning against a rise in UK machine games duty, citing risks to jobs and venue viability.
- The operator closed three casinos in the last quarter due to economic pressures.
- Despite closures, Rank reported revenue growth across most segments.
- Industry stakeholders face uncertainty as the UK budget approaches and tax policy is debated.