Rank warns MGD doubling would hit venues despite strong Q1 growth

Rank Group has reported like-for-like Net Gaming Revenue of £216.1 million ($286.5 million) for the three months to 30 September 2026, a 5% rise on the prior year, the company said in a trading update on Thursday.

The operator, which runs Grosvenor Casinos and Mecca bingo in the UK alongside Enracha in Spain, described the period as a strong opening to its 2026/27 financial year and said it still expects full-year group operating profit to meet market expectations, provided the UK's existing gambling tax regime stays in place.

That caveat sits alongside a warning from chief executive Richard Harris over a possible doubling of Machine Games Duty, which could feature in the government's forthcoming autumn budget.

Harris said in the update: "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 added that HM Treasury had accepted these arguments previously, saying: "HM Treasury recognised these economic arguments last year," while arguing that casinos and bingo clubs could back the government's growth agenda if tax policy remained stable.

Deutsche Bank flagged Rank as among the most exposed operators to a duty increase in an analysis published last month, estimating the extra cost to the group at roughly £35 million annually, equivalent to around 44% of its projected 2028 earnings before interest and tax and about 17% of nearer-term EBITDA even after mitigation efforts. The bank has kept its rating on Rank at "hold" since downgrading it from "buy" in January.

Digital operations produced like-for-like NGR of £64.9 million, up 6%, with the UK digital arm also growing 6% on the back of performance from Mecca's online brand, while international digital revenue climbed 4%.

Grosvenor Casinos generated £108.1 million in like-for-like NGR, a 6% increase, as customer visits edged up 1% and the amount spent per visit grew by 5%.

Mecca's bingo venues held like-for-like NGR broadly flat at £32.2 million. Visitor numbers fell 3%, which Rank linked in part to an extended spell of hot weather, though a 3% rise in spend per visit offset the drop in footfall.

In Spain, the Enracha venue business lifted like-for-like NGR by 7% to £10.9 million, helped by an 11% jump in electronic gaming revenue.

Across the group, machine revenue rose 14% for the quarter, outpacing growth of 3% in table gaming and 5% in electronic gaming. Rank said it intends to keep refining its machine estate and expects further gains in that segment.

The company is also closing three sites, in Swansea, Reading Central and Sunderland, after judging them no longer economically viable over the medium term.

The quarter follows a full-year 2025/26 performance in which Rank had already guided to underlying operating profit of at least £76 million, with like-for-like NGR up 6% year-on-year to around £834.1 million, including a 6% rise to £208.9 million in the final quarter.

Rank Group is due to publish interim results for the six months to 31 December 2026 on 28 January 2027.