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If Ian Burke was a betting man, he’d long since have become a regular at Gamblers Anonymous.
Since he became chief executive of Rank Group three years ago, he has suffered a losing streak of epic proportions, contending with a smoking ban, the scrapping of lucrative high-jackpot gaming machines, a series of (unexpected) tax hikes and the worst consumer spending environment for 20 years.
But the man at the helm of Mecca Bingo and Grosvenor Casinos is not the sort to throw in his chips and walk away. Instead, he is intent on turning provincial casinos and bingo halls into modern leisure businesses, vying with pubs, restaurants and cinemas.
That involves changing the traditional way of doing things. For example, he is testing table service in bingo clubs, which, together with an improved menu, has pushed spending per head on food from a risible £1.50 to a still low £4. “In the past, we’ve almost been proud at how bad we are at doing food.”
Not any more. Rank is also introducing a new, state-of-the-art operation to give today’s customer — a more demanding, more sophisticated animal than the silver-haired ladies and medallion men of Seventies legend — what they want.
The process is most advanced in the casino division, which, in addition to its 33 operational casinos has 13 non-operating licences. Here, the company is switching the focus from the traditional Grosvenor format to a new, larger format dubbed G Casino, sold under the slogan: “One amazing venue. One great night out.”
Rank will open its ninth G Casino in Dundee by the end of this year and Mr Burke expects to convert about 20 of the remaining sites to the G brand, including most of the non-operating licences in places such as Reading and Southend. That would give Rank a total of 46 UK casinos, of which about 30 would carry the G brand.
According to Burke, the larger-scale G clubs are broadening the appeal of casinos beyond the male-dominated clientele. While he does not expect to be able to increase the frequency of visits from the average of six times a year, he believes that there is plenty of scope to boost their number and to increase the amount of money spent.
“The G casinos are appealing to more 25-35s and more women,” Mr Burke said. “The big opportunity is positioning our casinos as modern leisure businesses. They’ve always catered for the so-called transactional customer, who wants to go in and play against the dealer or the house at roulette or cards. We want to keep the current customers and broaden the appeal. We’re partly in competition with what the rest of the leisure sector is doing and partly in competition with the home. G Casinos still have the traditional tables, but they also have bigger bars and restaurants and poker areas.”
A similar process has started at Mecca Bingo, where the template is a new £5 million club in Beeston, Nottinghamshire, a 25,000 sq ft venue that has introduced features such as rock ‘n’ roll bingo nights. It has a lounge behind a glass screen “where young people can have a laugh with mates without being shushed”. According to Mr Burke, such changes could boost the number of men who decide to play.
Rank has committed £1.5 million to convert its Mecca club in Aberdeen to the Beeston format and, if the conversion works well, half the Mecca estate of 103 clubs could be upgraded. The sites that will be converted are largely Mecca’s newer, flat-floor venues, although Mr Burke insists that the company’s former cinemas, with sloping floors, remain core.
“I think the industry’s given up on the former cinemas,” he said, “but how many retail leisure businesses on the high street do you know that have been rejuvenated by management because they’ve taken different approaches?”
Since Mr Burke joined Rank, he has closed 16 bingo clubs, mainly former cinemas rendered unprofitable by the smoking ban. The surprise rise in bingo tax from 15 per cent to 22 per cent in the recent Budget has pushed up to eight more clubs into the red, although the walking and cycling enthusiast seems determined to avoid further closures until he has exhausted all other avenues.
To drive the changes he has recruited Mark Jones, former boss of Premium Bars & Restaurants and Pizza Hut UK, as Mecca’s managing director. “I wanted somebody to come in with a fresh approach to these things. We needed someone to see the opportunity not only for the Beeston format but also for the former cinemas by applying the same customer insights.”
Moreover, as well as seeking to improve Rank’s fortunes though his own efforts, Mr Burke has at last started to catch the eye of Lady Luck. The High Court recently ruled in Rank’s favour in two claims against HM Revenue & Customs on overpaid VAT worth about £100 million. Analysts reckon the final tally could top £200 million.
All he needs now is to sort out the group’s troublesome online business, to restore the fortunes of its Spanish bingo clubs and to persuade the Government of the folly of its punitive approach to taxing bingo. Then he really would be on a roll.
Looking further into the future and even though he has his hands full for the moment, Mr Burke says that he would like to look at acquisition opportunities, especially internationally.
Yet the main threat to that ambition could come from a takeover of Rank itself. Its biggest shareholder, with 28 per cent, is Guoco Group, part of the leisure empire of Quek Leng Chan.
Mr Quek is well known to Mr Burke: he was the biggest shareholder of Thistle Hotels when the Liverpool fan was chief executive. In 2003, the Malaysian tycoon launched a hostile bid and Mr Burke was later dismissed and sued for opposing him.
Today, Mr Burke says that the past is forgotten and there is mutual respect between the two men. “He’s a shrewd businessman. He’s got a lot of cash. I think we’ll see him doing something quite dramatic in the next two years as asset prices come down. He’s always liked hotels and casinos.”
So what are the odds on Mr Quek launching a bid for Rank? Burke laughed before saying: “Who knows?”
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