Few gambling sectors have experienced the decline that has been seen in UK bingo halls. Following on from the announcement that Gala Coral intends to sell its bingo assets, Gala Bingo’s managing director Simon Wykes spoke out saying that the times ahead don’t look to promising for retail bingo outlets.
Rather than this simply being a case of the powers that be attempting to absolve themselves of any blame, Wykes certainly has a point.
Gala’s biggest competitor is the Rank Group which is the company behind the Mecca Bingo brand. Last week’s interim management statement from the company showed a 7% decline across the board for Rank with the weather and ‘disappointing performance in Mecca’s venues’ being among the principle factors to blame.
The decline of bingo halls in the UK has been a long drawn-out affair. The rise of the internet was always going to test the resolve of those hardy souls who would venture out in search of a man, a microphone, and what looks like a hamster wheel. The smoking ban in 2007 exacerbated the problem while other factors such as a reliance on low-moderate income customers painting a bleak picture of the future.
Nick Batram, an analyst at Peel Hunt, told the Financial Times that it’s become increasingly challenging for bingo operators to be successful. He added: “What is difficult to get a feel for is exactly how much the weather and the squeeze on lower incomes is to blame and how much might be structural.”
One of the rumoured buyers of Gala’s 138 clubs that are up for sale is Luke Johnson of private equity firm Risk Capital Partners. Johnson explained, also to the Financial Times, that bingo still had a future. He said: “It is still seen as one of the most social forms of betting and millions still go every week. It’s not going to disappear.”
Johnson may well be on to something there. But can online operators ensure that the internet re-establishes bingo as a favourite pastime among a greater population than middle-to-old-aged women?
Current fortunes
For established land-based companies, both Gala Coral and Rank have actually had a decent stab at the internet game – better than the ham-fisted attempts that we’ve seen from some bookmakers anyway. Both have even managed to get themselves shortlisted for the Bingo Operator of the Year award in next month’s eGR Operator Awards shortlist.
While industry plaudits are all well and good, unfortunately they don’t make you money. In fact, as well as a poor performance in Mecca bingo halls and the weather, Rank also pointed the finger at their digital channel for performing poorly in the 15 weeks leading up to October 13. However it’s not quite as bad as it could be with the 3% decrease in revenue comparing favourably to the 7% decrease in land-based revenue and an increase in digital spend per visit showing that retention could be the key for Mecca’s online products.
Gala Interactive are able to tell a slightly more positive story with active users increasing by 4% – although part of that may be caused by the large growth in Gala’s online casino product. But a 23% increase in the amount staked and 33% increase in gross win shows that Gala could be onto something with their online bingo activity.
Future tactics
Alongside Gala and Mecca in the eGR Bingo Operator shortlist are Gamesys, tombola and William Hill. Although it’s hard to be specific, it appears that tombola and certainly Gamesys continue to have success with their online bingo products. This success has allowed Gamesys in-particular to expand into other areas and more recently, other markets.
The one blot is Hills who have had problems with their online bingo activity in recent times having reported net revenue decreases of 6% in Q3. In July’s end of year results it was suggested that mobile will be the way that they look to reverse these fortunes as its importance was stressed.
Mobile and other forms of social gaming are undoubtedly going to be key to making bingo a success in digital channels. As Risk Capital Partners founder Luke Johnson explained, bingo is seen as one of the most social forms of betting. Allowing users to interact with others and find their own friends will go a long way to ensuring that the social aspects remain.
DoubleDown released their bingo product just over a year ago while Bingo Bash, and Bingo Blitz have gained significant followings with each having more than 4million active users. As well as creating social gaming products, the importance of social proof can not be underestimated when it comes to online bingo. Just like how people are more likely to go to a bingo hall with friends, the chances of signing up to an online product are greatly improved if proof of friends regularly using the same product is available.
It could even be that the key to succeeding with online bingo is simply to operate at a lower level. When speaking about improving their land-based bingo revenues Gala Coral referred to lower spend with free bingo and price trials. This principle can easily be applied to online products and presents a fairly low-risk way for larger operators to gradually build up their online bingo community. While this is by no means an ideal solution – particularly to those who have to answer to shareholders, it may be the best way of ensuring that bingo keeps bringing in customers.
