Rank Group’s Online Gambling Revenues Softens The Blow From COVID-19 Pandemic (But It’s Still In The Red)

Article by : Helen Sep 28, 2020

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With Rank Group’s preliminary 2020 financial year (ended 30 June 2020) results finally out there, we get to see a good example of how the coronavirus pandemic affected the industry players with both brick-and-mortar casinos and digital gambling products.

The overall net gaming revenue went down 15% to £585.1 million compared to the 2019 financial year. However, its digital operations actually brought 23% more net gaming revenue in 2020 – £145.3 million. The venues, obviously, suffered financial losses due to forced closures – their revenue declined by 22%.

Unfortunately for Rank Group, it relies heavily on venues to make a profit, with online gambling being an additional source of income rather than the company’s cornerstone. In 2020, digital operations brought Rank only £145.3 million – a lot less compared to £275.9 million earned by Grosvenor venues and £128.4 million brought in by Mecca ones. Evidently, even though revenues from digital gaming can soften the blow for the company’s bottom line, the said blow is still going to be a considerable one for those companies that are venue-first rather than digital-first.

Rank Group is one of the largest gambling companies in Western Europe. Initially a cinema and motion industry player, the company switched to gambling in 2006 and has been going strong since. Its revenues were stable at £700+ million for the past 5 financial years preceding the coronavirus (2015-2019), as were the operating profits at £70+ million over the same time period.

Rank operates in three markets – the UK, Belgium, and Spain, with the first one accounting for 95% of the company’s revenue. In the UK, Rank has 56 casinos brought together under the Grosvenor Casinos brand, as well as 96 bingo clubs under the Mecca Bingo brand, and online gaming and betting services as a part of Rank Interactive. Grosvenor is also in charge of two more casinos located in Belgium. The company’s Spanish branch, Rank España, has 10 bingo clubs around the country under its management.

All of Rank’s properties were forced to close in March 2020, with their reopening depending heavily on the local epidemiologic situation. In the UK, casinos were allowed to reopen their doors to guests only in mid-August, with safety guidelines and capacity limits in place.

As reported by the company itself, its UK Grosvenor casinos are operating at 60% levels compared to the previous financial year after reopening on August 15. 35 Mecca venues have been welcoming guests for a longer period of time, since the beginning of July, with the other 14 casinos reopening at the end of the same month. They now bring in 70% of the previous year’s revenue, which is better than the base case scenario expectations set by the company initially.

Here’s how the Chief Executive of Rank Group commented on the company’s 2020 financial results: “Rank performed very strongly during the first part of the year and into the second half. Despite continued good growth in our digital brands, with our venues closed from mid-March, the impact of the COVID-19 pandemic on the Group has been significant.”

However, with the huge commitment and dedication of our colleagues, very tight cost control across the business, and the support we have received from the government, we have carefully navigated the past few months and are now beginning to emerge successfully. We know the recovery will take time, but the underlying strength of our business provides us with confidence that we are well equipped to return to full strength.