John O’Reilly, the CEO of Grosvenor Casinos owner Rank Group, reportedly said that the the post-pandemic recovery of London casino performance is falling behind the rest of the country due to the smaller presence of foreign high-rollers in London venues. The CEO also said that these players seem to prefer Paris and Milan gambling destinations as the removal of tax-free shopping facilities in the UK affects London casinos and the overall company’s business recovery in the post-pandemic period.
As reported by Evening Standard, O’Reilly said: “That’s a function of higher spending, mainly Middle Eastern, customers not coming into town, or coming in but less,” he said. “We used to have lots of middle eastern customers coming in for seven or eight weeks across the summer. Now they might come here briefly but they mostly stay in Paris or Milan.”
FY 2022 Results:
According to Rank Group Aug 17 Preliminary results for the 12 months ended 30 June 2023, the group recorded the net gaming revenue of £679.7 million in the FY 2022. The result reportedly represents a 7% increase over the prior year but still remains 15% below the pre-pandemic levels. As Evening Standard reports, the revenue of London-based casinos was also 26 % lower than in 2019.
£20.3m Full-Year 2022 Profit:
The company’s FY 2022 operating profit was £20.3m and reportedly made only 52 % of the FY 2021 figure. Although Grosvenor casino properties recorded a 7% growth in customer visits, the group’s London facilities are generally falling behind the overall UK industry recently recording a rapid growth. Rank’s casinos reportedly increased revenues by only 5% over the past six weeks and the group’s CEO told the source that the lack of high rollers from abroad is one of the factors affecting the recovery.
Absence of High Rollers and Free Shops:
Also, Evening Standard reports that John O’Reilly considers that there are a lot of ”moving parts,” with the removal of VAT-free shopping facilities being regarded as another significant factor for a slower revenue growth in the post-pandemic period. He reportedly told the source: “You come here, you shop, you eat, you play the tables. If they’re not coming to London, because things cost 20% more, that affects everything. It affects casinos.”
Mecca Is Growing:
Meanwhile, the Rank Group’s gambling resort Mecca Bingo was among those UK gambling facilities that used the volatile weather conditions to benefit from the gamblers looking for indoor entertainment over the past six weeks. As reported, Mecca has boosted revenues by 17% over the six-week period. This seems pleasantly surprising for the Rank as O’Reilly reportedly said: “I can’t remember saying to anybody before that Mecca is growing.”
Awaiting Gambling Reforms:
According to Evening Standard, Rank Group faces work force shortages and higher staff costs but looks forward to the new gambling reforms intended to support the UK casino industry. The group’s CEO reportedly expects that these reforms will be implemented by summer of 2024. In the meantime, the modest growth of its operations impacted the shares to go up 1.6% to 90.8 p.
