The UK was blasted by the “Beast from the East” in March – extreme weather from Siberia that piled more gloom on the UK high street as shoppers stayed at home and in-store spending slumped. Restaurants and pubs also saw their sales dip sharply as customers opted to stay at home – warm, snug and shopping online.
Not just retail and restaurants felt the chill blast of the “Beast from the East.” UK gambling operator Rank Group reported Q1 revenue down by 2% on a like-for-like basis as fewer customers visited its casinos and bingo halls.
Rank cited the bad weather as the reason for “weaker than expected” visits. The situation was made even worse by its high-rollers enjoying a run of good luck in the company’s 54 UK casinos.
One bright spot
Digital was the one bright spot for Rank, with revenues up by 17% in the first quarter of the year. Nevertheless, the company’s board was forced to lower estimates of full-year profits from £84.5m ($120m) to £76m ($108m) for the year ending June 30. “The board is cautious about the UK consumer outlook,” said the statement, “and as a result expects the group’s UK venues to continue to be impacted for the remainder of the 2017-18 financial year and into 2018-19.”
Rank will increasingly focus its efforts online, as it bids to attract the younger age group. It will also launch two new brands, Bella Casino and Luda.
It looks likely, though, that the brick-and-mortar casinos and bingo halls will continue to be a drag on the group’s profits. Experts blamed all the usual suspects for the poor showing in the first quarter – the continuing uncertainty of Brexit, the lack of real wage growth in the UK and – as above – the weather.
The real reason?
But could the real reason simply be that UK customers are falling out of love, not just with casinos and bingo halls, but with real-life interactions? This year has seen a raft of high-profile closures on the UK’s high streets: Toys-R-Us and Maplin have closed their doors and Next has admitted to the “toughest trading conditions for 25 years.”
High street store openings are at their lowest level for seven years and restaurant chains are closing branches up and down the country.
Factor in the impact that blockchain and “fintech” will have on the UK’s retail banking sector – and let’s not forget that the government is poised to launch a crackdown on Fixed Odds Betting Terminals. Five years down the line, the UK high street is looking like a bleak and deserted place, as AI continues to bring us more and more personalized shopping on our mobiles and tablets.
Are we going to see personalized gambling as well? Of course we are, but that is unlikely to be found in the casinos and bingo halls of the Rank Group or any other traditional operator.
It is hard to see how “brick-and-mortar gambling” can reverse the trend. It is easy in the short term to blame the British weather; in the long term, more fundamental forces are at work.