Inquiry may order Rank to sell casinos

GAMING operator Rank has been warned it may have to sell several UK casinos before a merger deal with rival Gala can go ahead.
By The Newsroom
Published 19th Dec 2012, 06:00 BST

The Competition Commission said Rank’s deal to acquire 23 casinos could reduce competition in Aberdeen, Liverpool, Stockton-on-Tees, Bristol and Cardiff, as well as in Edinburgh where it has the licence to develop a new casino.

The planned acquisition of the 23 sites by the Mecca Bingo owner would see it leapfrog Malaysian firm Genting as the UK’s biggest player, giving Rank’s Grosvenor casino division 57 sites.

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But the Commission fears that the loss of one of the UK’s three major casino operators would mean that customers in several areas could lose out.

Inquiry chairman Professor Martin Cave said: “We have found that casinos vary their offer in response to local competitive conditions and while there is limited scope to compete on price, casinos try to attract customers through customer service, promotions, events and the range of games available.”

The Commission will publish its final report on February 20, when its other sanctions could include blocking the whole deal altogether.

Rank said in October that discussions were ongoing over changes to the previously agreed terms of the £205m deal, following the referral to the Competition Commission by the Office of Fair Trading.

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The majority of Rank’s casinos are outside London, with the company focused on the faster roll-out of its G Casino format, which attracts a younger, less formal crowd.

The Rank business employs more than 3,500 staff. It is listed on the London Stock Exchange but is majority owned by Guoco, the investment vehicle of Malaysian billionaire Quek Leng Chan.

Rank can trace its roots back to 1937, when Joseph Arthur Rank, who was born in Hull, formed The Rank Organisation, which brought together a number of film businesses, including Pinewood Studios and Denham Films.

During the 1940s and 1950s, The Rank Organisation produced popular films, such as Powell and Pressburger’s The Red Shoes, David Lean’s Brief Encounter and Laurence Olivier’s Henry V and Hamlet.

Rank entered Britain’s casino market in 1989, when it acquired a single casino in Great Yarmouth.