Rank Group, the embattled Mecca bingo and Grosvenor casino operator, reported encouraging trading since the start of the year, but said that changes to bingo duty and poker taxation announced in the Budget would cost it £9 million a year.

The company, which in the past two years has seen its businesses ravaged by the smoking ban, the recession and the scrapping of high-payout gaming machines, expressed dismay at Budget changes “imposed without prior indication or consultation”.

Changes made in the Budget included the scrapping of VAT on playing bingo and other forms of gaming, a measure that the industry has long been lobbying for. However, the benefit was more than offset by the increase in bingo duty from 15 per cent to 22 per cent.

The changes, which forced Rank to bring forward its trading update by a day, also brought poker under the same duty regime as other casino games, increasing tax from 15 per cent to as much as 50 per cent, depending on the profitability of the casino.

Ian Burke, the chief executive of Rank, said that the net impact of all the changes would be a hit of £6 million against this year’s operating profits and a hit of £9 million in a full year.

A clearly exasperated Mr Burke, who has worked hard to rebuild the group’s fortunes, claimed that in recent meetings with the Treausury there had been “no discussion of increase to taxation for bingo or poker”.

Analysts pointed out the irony that, after years of lobbying for the removal of double taxation on bingo, the scrapping of VAT had been accompanied by a 50 per cent rise in duty. Paul Leyland, of Collins Stewart, the broker, said: “Bingo has scored a pyrrhic victory in getting VAT abolished.”

Rank reported a 1 per cent decline in like-for-like sales in the 16 weeks to April 19, with bingo flat and casinos up 1 per cent. This was offset by a 13 per cent decline in its internet division, mainly because of a lower win margin in its Blue Square sports betting business.

Its bingo division, which will next month open its 103rd club in Britain, in Beeston, Nottingham, saw a 5 per cent rise in spend per head, offset by a 5 per cent decline in customer visits.

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