Harris made the comments at a capital markets event held yesterday (30 November).
Harris said the push to get Grosvenor to at least £7m in revenue per week would happen “largely through activity that is within our control”. However, he conceded the figure is “before the benefits of the Gambling Act review and before we make any material changes to the property estate”.
“All-in, we expect to push the business well above £7m per week in the medium term,” Harris said.
Revenue at Grosvenor venues was £84.2m in the company’s latest set of results, Q1 2023-24.
Continuing on the digital side, Harris said Rank sees an opportunity to grow digital revenue by 8%-12% in the next few years.
“The revenue growth, the operator leverage benefit and the focus on efficiency will also lead to improved margins,” Harris explained.
Harris also made a gutsy claim for Rank’s Mecca venues business. He said Rank believes it can take Mecca from a loss of £5.8m last year “to a double-digit operator profit in the medium term”.
Benefits of the white paper
Elsewhere, Harris offered insight into how Rank was addressing the proposals outlined in the Gambling Act review white paper. Published back in April, he said the company had been “working through the various consultations”.
“We believe the overall outcome for the group is positive and, in particular, allows us to significantly modernise the casino proposition in the UK,” he explained.
Rank’s “main benefit” of the white paper was the increase in the amount of gaming machines allowed in casinos. This was one of the proposals for land-based venues outlined in the white paper.
“The vast majority of our casinos will benefit and we expect to broadly double the number of gaming machines in the Grosvenor estate.”
He added that benefits will also be felt in Rank’s UK bingo operations, due to the 80:20 rule being revised. This will allow businesses to offer a 50:50 ratio of Category B and C/D gaming machines.
Harris also said that electronic payments in casinos and bingo venues would allow Rank to “make the customer journey much simpler”.
Jon Martin, chief operating officer at Rank, added that in the bingo market Rank currently holds “27% and 38% of the casino land-based market”.
He said Rank wishes to “leverage the strength” of its venues brands “and take full advantage of the cross-channel opportunities they provide”.
The white paper’s proposals for maximum stake limits on online slots and the increase in statutory levy would hold disadvantages, Harris stipulated.
“The most obvious downside of the review for Rank is the impact from the maximum staking limits for online slots,” he continued.
“In addition, there will be some costs associated with the increase in the statutory levy. This will be from the blanket 0.1% we pay today, to 0.4% for Grosvenor casinos and 1% for the UK digital business, both by 2027.”
Wednesday (29 November), also the saw the GB Gambling Commission open the second round of consultations for the white paper’s proposals.
This round will consult on removing the current requirement to contribute to Research, Prevention and Treatment (RET). This will then be replaced with the levy.
Harris confirmed that Rank would begin the process of implementing the white paper’s measures “in the new year”. Optimising the number of gaming machines in Grosvenor venues will take priority, “once the secondary legislation comes into force”.
Rank Group’s pandemic fallout
Harris also gave insight into the effects of the Covid-19 pandemic on Rank’s performance, specifically in terms of bingo. He detailed that the group reduced the number of its clubs from 80 to 55 in the wake of the pandemic.
“Bingo is a liquidity game,” he continued. “The more visits you get, the better the prize pools you can offer and the more attractive that is for our visitors. However, the reverse is also true.
“Coming out of the pandemic, there was an oversupply of the number of clubs in the UK relative to the number of people playing bingo regularly. We recognised that and reduced the number of clubs in our estate from around 80 going into the pandemic, to 55 today.”
Harris explained that this was necessary to get Rank’s Mecca venues back to profitability.
Looking to growth in other markets, Enric Monton, Rank international managing director, said Rank is estimated to go live in Portugal before the end of its financial year.
“If everything goes as expected, we will be the first online bingo operator in Portugal. A country where the online market is still growing exceptionally fast,” Monton said.
As for Spain, one of its existing operating countries, Monton said Rank is comfortable in the market.
“We are well positioned and we still have room to grow in casino and sports and also through innovative products such as live bingo.”