The former chief of Gala Bingo has commented on the troubled times affecting the land based bingo industry, stating the troubled sector can – and must – find a way to bounce back.
Writing in The Times, Steve McKenna, former MD of Gala Bingo, has admitted the devastating damage the smoking ban and recession has had upon many land based bingo halls, with operating profits declining by around 40 per cent and declining levels of admissions falling by around 20 per cent. The Rank Group, who operate competitor Mecca Bingo, have seen their share price halve, and as confirmed in earlier reports, Gala Bingo have had the value of their investment written off by their private equity backers.
Speaking about the unpopular hike in bingo duty from 15% to 22% following the 2009 Budget, McKenna writes that the measures could cost the sector around £33 million a year, equating to another wave of bingo closures that will potentially double the current number of closures to around 200 over the last three years.
However, McKenna writes hopefully about the future of the bingo sector, citing online bingo halls as a massive growth opportunity. Online Bingo now accounts for around 20 per cent of the total bingo market, a figure that is estimated to rise as more players seek the thrill of the bingo hall in the comfort of their own home. He also urges the land based bingo industry to return to top-line growth, citing the key factor as admissions. Writing in the paper, McKenna argues that “Admissions are crucial to bingo because, as a pooled-stake game, the more players you have, the higher the prize money you can offer. In this way, admissions go a long way to defining the attractiveness and value of the bingo product. Falling admissions can create a vicious circle that drives further declines as prize money falls. Crucially, though, this can work the other way and this is where bingo operators need to focus.”
Operators are advised to invest in growing their businesses, and increasing admissions should be a key target by increasing customer value and the experience for local bingo hall players. Reinvention and innovation will be needed to ensure that the bingo “must match the expectations of the modern consumer.”
McKenna also draws on previous declines in the industry, notably the launch of the National Lottery, which had a significant impact on Bingo profits. He urges the sector to believe in the game once more, saying that it will be crucial for the success of the local bingo club and vital in securing its future. This would be something that needs to happen immediately he argues, saying “the industry needs to take up the challenge of growing the top line sooner rather than later. I believe that it can and hope that it will.”
McKenna’s recommendations will no doubt be of utmost importance to the land based bingo industry, and provide much hope amidst a torrent of bad news. Whether they can take up these recommendations is another thing, but it seems like the bingo industry has a big fight on its hands, and must be ready to rise to the challenge in the fight for survival.
