CASINO

Rank deal will not cannibalize the UK casino biz

TAGs: gala casinos, Grosvenor Casino, Rank Group

rank group takes gala casinosFollowing Rank’s deal to acquire a number of Gala’s casinos last weekend it was interesting to try and work out why the deal was being done.

It was talking to my grandmother I discovered Rank’s entertainment business career started far away from the casino in the salubrious surroundings of the local cinema. Post-war times were obviously very different and back then the cinema was likely a lucrative way to make some money through entertainment. Rank’s latest deal shows they mean business in an industry that, although the critics don’t like to say so, is just as deserving of the “entertainment” tag as any other. Big changes have been afoot in the U.K. based casino industry for some time and last weekend the straw broke the camel’s back as Rank decided to enough was enough and they wanted the market all for themselves.

Things have hotted up ever since Aspers spent big to open the continent’s largest casino and there will be some that think Rank’s hand was forced by the opening of such a lavish venue. The £250 million deal means Rank has another 23 venues in their vast catalogue of casinos, taking them to a total 58 venues in the UK. There haven’t been alarm bells ringing around this deal and even the analysts have kept quiet so why is this the case?

In a lot of industries this would be seen as a prime opportunity to consolidate. Casino companies see it completely the other way though and you only have to look at Rank’s future plans. Organic growth was already proposed with 25 new locations earmarked to see a Rank casino by 2015. This remains unaffected and there is no sense that expansion is simply being done to put others off. There’s a general feeling at Rank that if one casino firm sees visitors go up the others will also see the benefits.

While the above is definitely the case in an urban centre like London, Birmingham or Manchester, it’s when you look further afield that you start to think this isn’t the case everywhere. The best way to illustrate this is to look at Wales’ second city Swansea where Aspers have just this week started a consultation that could eventually see the shuttering of the venue. It’s no coincidence that a Grosvenor Casino is already there and demand in a place like this has seen to its demise.

So while it’s all well and good there being multiple casinos in some cities others just can’t sustain more than one and it goes to dispel the myth that they’re all there to help each other. What the move won’t do is close Gala venues and jobs wise that is definitely some good news for a country that is still deep in recession.

For Rank this eliminates the one large-scale competitor they had and gives them a free run at the industry. The only problem that will come for them is the larger Aspers casinos in a small number of locations and independent casino that will still be a staple of some towns. Then they could find themselves in same place that Aspers found itself in Swansea although the amount of venues they possess would offset it.

Rank deciding to acquire Gala Casinos is a good thing. No jobs are likely to be lost, no venues are being shut and it will only give the casino industry a better reputation as an entertainment venue to trust.

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