Mecca Bingo Operating Profits Drop - 03-01-10

March 1 - The Rank Group, which owns brands such as Mecca Bingo, announced that several of its divisions, including its online gambling and online bingo arms, had underperformed last year, mainly due to the recession.

The group's online gambling division showed a drop in revenues of 3% to £ 50.8 million, which resulted in a drop in operating profits of 1% to £7.5 million.

The group's Mecca Bingo brand saw operating profit drop 15% to £32.3 million.

Nevertheless, the company said that it would be paying investors out a small dividend, despite current market conditions.

This showed that the group was confident of future prospects for its bingo and gambling brands.

"The current year is forecast to be a period of gradual, if fragile, economic recovery in Britain, Rank's key market."

In the meantime, the group has called on the UK government to make important changes in the country's tax regime which has managed to cripple many bingo rooms around the country.

Rank is calling for the UK to introduce a flat rate tax of 15%, instead of the seven different taxes currently used.

"At the moment the gaming and betting activities of UK consumers are subject to a patchwork quilt of taxation, without any apparent logic or relationship to social policy," said the Chief Executive Officer of the Rank Group, Ian Burke.

"It is particularly concerning that the current system of taxation seems to be undermining the aims of the Gambling Act by imposing the highest rates of duty on those venues which provide the greatest degree of supervision and have the lowest rates of underage gambling."

The group's 'Responsible Taxation - Fairness, Simplicity, Sustainability' report cites major benefits for the UK Treasury, government and gambling operators through a change in the tax system.

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