Rank CEO says MGD rise would ‘reduce viability’ of venues but hails ‘strong start’ to financial year

On Thursday, Rank Group reported a 5% increase in like-for-like Net Gaming Revenue (NGR) for the first quarter of its 2026/27 financial year. 

Its NGR rose to £216.1 million ($286.5 million) for the three months ended 30 September 2026, which the company said reflected steady revenue growth across multiple channels, despite evolving market conditions.

Rank Group described the quarter as “a strong start to the new financial year”. Provided the current UK industry tax structure remains unchanged, it expects to deliver group operating profit in line with market expectations for the full year.

‘Reduce tax receipts’

Within the trading update chief executive Richard Harris highlighted the risk posed to the business by a potential doubling of the UK’s Machine Games Duty (MGD), which may be presented in the government’s upcoming autumn budget.

He warned that higher MGD rates could elevate operating costs, amid other concerns. Harris further cautioned that such developments would also diminish tax receipts and hinder future investment in the sector.

“Any increase to Machine Games Duty will increase costs, reduce venue viability, lead to venue closures and job losses, reduce tax receipts and halt investment,” he noted. 

“HM Treasury recognised these economic arguments last year,” he continued, emphasising that casinos and bingo clubs could support the government’s economic growth agenda if policy conditions remained favourable.

Last month, Deutsche Bank published an analysis that put Rank at the forefront of industry risk if an MGD hike were to be implemented.

The investment bank estimated an increased duty cost of around £35 million per year, equating to roughly 44% of the company’s forecasted 2028 EBIT and approximately 17% of EBITDA in the nearer term, even after partial mitigation. 

It reiterated its “hold” rating for Rank in light of these conditions, having downgraded the operator from “buy” in January this year.

Increase in Grosvenor customer spend per visit

The company’s digital division recorded a 6% rise in like-for-like NGR, reaching £64.9 million for the quarter. This growth was primarily driven by its UK digital segment, which expanded by 6%, led by Mecca’s online brand. International digital NGR also grew by 4%, signalling strength in overseas markets.

Grosvenor Casinos delivered a 6% like-for-like NGR increase to £108.1 million. This was supported by a 1% rise in visits and a 5% increase in spend per visit, indicating higher customer engagement per trip.

Mecca bingo halls reported stable like-for-like NGR at £32.2 million, although visitor numbers declined by 3%. The reduction in footfall was partly attributed to an extended period of hot weather across the UK. However, a 3% higher spend per visit helped maintain revenue levels.

Rank’s Spanish venue subsidiary Enracha posted a 7% like-for-like NGR increase to £10.9 million. This growth was largely driven by an 11% surge in electronic gaming revenue, underscoring the business’ expanding footprint in Spain.

Venue closures

Gaming machines were a major highlight during the quarter, with revenue surging by 14%. Table gaming and electronic gaming recorded more modest growth of 3% and 5%, respectively. Rank Group expressed confidence in continuing to optimise its machine estate, expecting further revenue improvement in this area.

In contrast, the group made the strategic decision to close three venues located in Swansea, Reading Central and Sunderland. The closures were deemed necessary as these locations were “no longer economically viable in the medium term” the company said.

Earlier this year, Rank announced underlying operating profit for the year ending in June 2026 would reach at least £76 million. 

The company highlighted a 6% year-on-year increase in like-for-like NGR to approximately £834.1 million for the 12-month period. This momentum extended into the fourth quarter, with a like-for-like NGR of £208.9 million also reflecting a 6% rise compared with the previous year. 

Rank Group is scheduled to release its interim financial results for the six months ending 31 December 2026 on 28 January 2027.