In a recent update regarding its fiscal year 2025/26 results, Rank Group's CEO Richard Harris expressed concerns about developments affecting the UK's retail casino industry. He pointed to a recent document from the Social Market Foundation that advocated for higher taxes on 'higher-risk Category B electronic gaming machines.' Harris criticized anti-gambling campaigners for creating what he described as "clouds" over the regulated gambling industry in the UK.
This year, the gambling sector has already experienced an increase in remote gaming duty from 21% to 40%. Furthermore, Prime Minister Andy Burnham announced new powers for councils to impose restrictions on Adult Gaming Centers, which has further compounded the pressures on the industry.
Harris characterized betting shops as “dodgy businesses” and likened them to the rising number of vape shops in UK high streets. He warned that elevated taxes could damage the financial viability of land-based gambling businesses.
“Tax proposals from anti-gambling campaigners continue to cast clouds over a regulated industry that is proud to support jobs across the country, deliver great hospitality experiences to millions of customers, and Rank paid over £225 million in taxes and duties last year,” Harris stated.
He further cautioned that tax increases would lead to lowered tax receipts as cherished bingo halls and casinos face potential closures, adversely affecting local communities. "The government has supported bingo clubs like ours in recent years. Any tax increase would have a material impact on commercial viability," he added.
For the fiscal year ending June 2026, Rank Group reported a 5% growth in net gaming revenue (NGR), amounting to £835 million ($1.13 billion), driven primarily by its digital operations. Underlying Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) rose 15% to £138.3 million, and the underlying operating profit increased by 21% to £78.6 million. However, the operator reported a 7% decline in overall operating profit, dropping from £60.1 million to £55.7 million, largely influenced by various tax hikes, which led to a 23% fall in profit after tax to £29.9 million.
Most of these figures were calculated on a like-for-like basis, taking into account factors like venue changes and foreign exchange movements. The group’s underlying like-for-like NGR was up 6% to £834.1 million, with the underlying like-for-like operating profit climbing 20% from £66.7 million to £79.9 million.
Rank finished the year reporting a net free cash flow of £25.5 million, down slightly from £27.7 million the previous year, though net debt improved from £154.7 million to £147.2 million.
The digital segment experienced particularly strong growth, with underlying like-for-like NGR increasing 8% to £248.5 million, surpassing that of physical venues. In the fourth quarter, digital revenue on a like-for-like basis grew 12%, which Rank hailed as “particularly encouraging” and critical for ensuring a solid profit performance for the financial year. Average weekly NGR from Grosvenor casinos rose 5% year-on-year to £7.6 million, alongside increased customer visits and spending per visit, attributed to the rollout of 850 machines across 37 casinos. However, Rank noted that table gaming profits were hindered by the ongoing conflict in the Middle East. Mecca venues also recorded a 4% increase in NGR on a like-for-like basis, despite the closure of nine underperforming sites during the year.
Looking forward, Rank observed positive trading momentum in the initial six weeks of the new financial year, with group NGR up 8%. Digital revenues saw a 10% hike, while Grosvenor gaming machine revenue soared by 15%. The company reiterated its aim to achieve over £100 million in underlying operating profit in the medium term but acknowledged a potential decrease in digital profitability for FY’26/27 due to the steep rise in remote gaming duty.
Regarding land-based operations, Rank emphasized the importance of maintaining the current rate on machine games duty, which is presently 20%. “Any increase to this rate will further impact venue viability across both Grosvenor and Mecca and will lead to a reduction in tax receipts within 12 months,” the company warned.
In terms of changes within the company, Richard Harris was announced as the permanent CEO in July after serving in an interim capacity since the departure of John O’Reilly in January. Karen Whitworth also announced her board departure, and Lucinda Charles-Jones is set to follow suit after the AGM on October 8. Following this AGM, Katie McAlister will temporarily step into the role of remuneration committee chair while Rank seeks a new senior independent director to replace Whitworth.
