Rank Group Buys Casinos in Bulk

Existing regulations in and planned changes to British gambling laws, especially the Gambling Act 2005 and the tax changes set to kick in from 2014, have led to lots of activity in both the online and the land-based casino market.

Only recently, UK-based Rank Group ditched British internet casino and sportsbook Blue Square, in order to refocus its activities more heavily on the traditional casinos in its portfolio. In a latest development, the company received the green light to conclude another deal aimed at cementing its leading position on the brick-and-mortar scene.

It is interesting to note that while many land-based casino operators around the world are eager to establish an online business and mobile casinos to attract groups of new customers, Rank appears to be headed firmly in the opposite direction, retaining a very limited internet gambling presence. On the other hand, it makes perfectly good business sense for the company to compete in a market where it has a definite advantage.

That advantage can now grow even further, following the Competition Commission’s decision that the leading gambling and leisure operator can go ahead with the planned purchase of competitor Gala Coral’s land based establishments in the UK.

Rank announced the planned transaction almost a year ago, when it publicized its intent to cash out around two hundred million pounds for Gala Coral’s 23 UK casinos and three “cold licenses” (i.e. unused permits).

This would have propelled Rank to holding a 44% market share, which raised a few eyebrows at the Office of Fair Trading, resulting in the offer being forwarded to the Competition Commission.

The Commission, however, agreed to the deal – albeit with some modifications, to ensure that the market remains competitive.

According to the approved terms Rank can buy Gala Coral’s brick-and-mortar venues for a total of GBP 179 million if the Aberdeen, Bristol, Cardiff and Stockton-On-Tees establishments are removed from the package. Moreover, Rank must sell its own cold license in Edinburgh to a competent competitor, if it wishes to buy Gala’s existing casino in the city.

After reviewing the bids the regulator picked smaller UK operator Global Gaming Ventures as the approved buyer of the Edinburgh cold license.

Once the transaction is completed Rank will be the biggest player in the UK land-based casino market with 54 establishments and 12 dormant licenses.