Smoking ban hits Mecca profit
Leisure group Rank today said profits continued to slide at its Mecca Bingo operations after the smoking ban in Scotland saw sales fall north of the border.
The forthcoming July 1 blanket ban on smoking in public places south of the border has already led to Mecca Bingo bosses announcing the closure of the hall in Wolverhampton city centre's Skinner Street and eight other centres.
They fear the ban will put off players and are applying to building smoking shelters outside their bingo halls as they look for other ways Mecca members can still gamble while being able to light up.
Mecca Bingo in Bilston is just one of many that has applied to create a hut outside its Springvale Way building.
It is thought the other branches in Brierley Hill, West Bromwich, Oldbury, Wednesbury, Telford and Birmingham will also apply to build shelters.
At the time of the Skinner Street closure announcement, Max Wylde, spokesman for operators Rank, said: "We had to review all of our clubs which might be affected by the smoking ban profits-wise.
"It was felt that Bilston would have the most potential to remain profitable.
The full impact of the smoking ban in Scotland was revealed today as Rank showed how, alongside increased business costs, it caused operating profits at its bingo division to fall to £72.1 million, down from £87.9 million last year. Like-for-like revenues were 15 per cent lower in Scotland.
However, the group added that increased prizes – up £18 million to £205 million – had helped stem declining admissions and increased the Mecca's market share.
Rank added that it was set for a challenging year ahead, with the introduction of smoking bans in England and Wales remaining its most immediate concern.
But Rank said it had implemented a broad strategy to improve facilities for members who wish to smoke.
The company, which has changed its focus during 2006 to a solely gaming business, posted adjusted pre-tax profits of £44.4million for the year to December 31, down from £50.5 million last year. Rank warned that it expected to be hit by changes to gambling regulations during the year.
While the relaxation on advertising and limits on games would serve to benefit the company's operations, the removal of certain types of slot machines and the increase in casino licences would impact further on revenues.
The company said it intended to bid for a number of new casino licences and said the level of investment was likely to be "significant".
The sale of Rank's Hard Rock Cafe chain to the Seminole Tribe of Florida for £490million is expected to be completed next week.
