Rank Warns a Third of Its Venues Would Close if Machine Games Duty Doubles to 40%

The Mecca and Grosvenor owner says a doubling would shut about a third of its estate and hit around 2,000 staff. Its own accounts suggest the arithmetic is real: on a rough estimate, the rise on Mecca's machines alone would exceed what its bingo clubs earn. The new gambling minister, touring one of its casinos this week, has so far spoken about bingo licensing rather than tax.

• Rank Group chief executive Richard Harris told the Press Association that raising Machine Games Duty from 20% to 40% would force about a third of its estate to close and affect around 2,000 staff, about 30% of its UK workforce
• A week earlier he put the cost at £35 million a year, This Is Money reported; Rank's reported gaming machine revenue in its British casinos and bingo clubs, £173.3 million last year, is consistent with that figure
• Gambling Minister Vicky Foxcroft toured Rank's Grosvenor Casino Liverpool with the Betting and Gaming Council during the Labour conference, where she said a consultation on revoking "aim to permit" would start "very shortly"
• Chancellor John Healey presents the Budget on 28 October; the Treasury has confirmed nothing, and the industry's and the Social Market Foundation's revenue estimates point in opposite directions
• Separately, the charity Ygam has convened a Prevention Delivery Network for the 33 organisations funded from the statutory levy's prevention budget

Rank Puts a Share of Its Estate on the Table

Rank Group, which owns Mecca Bingo and Grosvenor Casinos, has warned that about a third of its venues would close if the government doubles Machine Games Duty (MGD) in next month's Budget. "We have a healthy business, but if it went to 40% about a third of our estate would have to close," chief executive Richard Harris told the Press Association, in an interview published on 28 September. Around 2,000 workers, about 30% of the group's UK workforce, would be affected, he said, with sites in the North of England hit hardest. "There are other operators who wouldn't just be looking at shutting venues but wouldn't have a future at all."

It is the second set of figures Harris has given in a week. On 21 September, according to This Is Money as reported by Yogonet, he said a rise to 40% would cost Rank £35 million, make between a quarter and a third of its venues "unviable" and put up to 25% of its 6,500 UK staff, about 1,625 jobs, at risk. He said then that "within 12 months, if the tax rate goes up, the tax take goes down". Rank runs 41 Mecca clubs and 47 Grosvenor casinos, according to the same report, and has not said which are at risk.

In its August results Rank called the MGD rate "critical" and said any increase "will lead to a reduction in tax receipts within 12 months". It closed nine Mecca clubs in the year to June, taking the estate from 50 to 41.

A Tax Proposal Without a Treasury Position

MGD is charged on machines' net takings at 5%, 20% or 25% depending on stake and prize. The Times reported in September that the Treasury was modelling a Social Market Foundation (SMF) proposal to double the rates; the SMF estimates that doubling the rate on Category B machines alone would raise £275 million to £458 million a year. The Treasury has confirmed nothing, and Chancellor John Healey presents his first Budget on 28 October. EY modelling for the Betting and Gaming Council (BGC) suggests a 40% rate could put up to 16,000 jobs, nearly 1,500 betting shops and as many as 34 casinos at risk and leave the Treasury £124 million worse off; the BGC has not published its assumptions. Rank's warning follows Genting's estimate that 13 of its 32 casinos would become unsustainable, and the BGC's Back Our Betting Shops campaign, launched on the same day as the Harris interview.

The Minister Visits a Rank Casino

Gambling Minister Vicky Foxcroft visited Grosvenor Casino Liverpool during the Labour Party conference on Monday 28 September, her first direct engagement with the sector since taking the brief, according to the BGC. The visit was hosted by Grosvenor and the BGC, including chief executive Grainne Hurst, who told the minister that 22 casinos have closed since 2019 with the loss of more than 3,000 jobs and that further tax rises "risk undermining investment and putting more jobs and venues at risk". Rank's director of corporate affairs, David Williams, said the Liverpool casino alone employs more than 100 people.

At a conference fringe event, her first public appearance in the role, Foxcroft said a consultation on revoking the Gambling Act's "aim to permit" principle would be "starting very shortly", without giving a date, according to NEXT.io. She also set out plans to update bingo licensing requirements to ensure "that it is bingo that is taking place", after Alex Ballinger MP said some bingo halls "have become adult gaming centres by the back door", and said she wanted to "make sure we follow the evidence". According to InterGame, she spoke in support of the seaside industry "and arcades" but was less sympathetic to high street venues. She did not, in the reports seen by iGaming Times, address MGD.

The panel's chair, James Noyes of the SMF, said he "would have liked to see more money on prevention and treatment and a little less on research" from the statutory levy. Prevention money is now flowing: on 24 September the charity Ygam convened the first meeting of a Prevention Delivery Network for the 33 organisations commissioned through the levy-funded Gambling Harms Prevention and Resilience Fund of the Office for Health Improvement and Disparities. It will meet quarterly.

Rank's Accounts Make Its Number Credible

Warnings of closures are the standard currency of a pre-Budget campaign, and Rank's have grown between one interview and the next. The company's own accounts are a better guide. In the year to June, Grosvenor's British casinos reported £113.2 million of gaming machine revenue and Mecca £60.1 million, a combined £173.3 million. Twenty percentage points on that sum is about £35 million, which is Harris's figure. Reported revenue is not the same measure as the net takings on which the duty is charged, and some machines sit in other bands, so this is an approximation. But it shows the claim is not plucked from the air, and it shows where the pain falls: machines provide 42% of Mecca's venue revenue, and an extra £12 million on Mecca's machines alone would exceed the £8.9 million of underlying operating profit its clubs made last year.

The Minister's First Words Were About Bingo, Which Is Rank's Other Problem

Foxcroft said nothing about tax, and she could not before a Budget. What she did say points at the same revenue line. An update of bingo licensing designed to ensure "that it is bingo that is taking place" is aimed at halls that earn much of their money from machines, which describes Mecca: its machines took £60.1 million last year against £63.6 million from mainstage and interval bingo combined. Rank's strategy, set out in August, is to lean further into machines and electronic terminals in all its venues. A government that doubles MGD and tightens what counts as a bingo hall would be squeezing the same pound twice, and Rank would be one of the operators most exposed to both.

Both Revenue Estimates Are Assumptions About Closures

The SMF's £275 million to £458 million and the BGC's £124 million loss are not really disagreements about the tax rate; they are disagreements about how many venues close and how quickly players and staff go elsewhere. The BGC has not published EY's assumptions, and the SMF's own range is wide. Rank's accounts give the Treasury one data point: on a rough estimate, the rise on Mecca's machines alone would exceed what its bingo clubs earn. Whether those venues close or absorb the cost is what the Treasury has to judge before 28 October. The levy-funded prevention network is a reminder that harm prevention now has its own funding stream, so the case for a higher duty has to rest on revenue or on reducing the number of machines, and those two aims pull against each other.

Rank has given the Treasury a number, and its accounts broadly support it. What the Chancellor does with it will show whether the government is taxing machines for revenue or to reduce their number.