Bingo admissions begin to rise

Gala Coral’s financial results for the first 12 weeks of 2014 showed the company’s bingo clubs achieved a 3% increase in admissions against the same period of 2013, to 3,893,000. Spend per head, however, was down 4% to £34.98. This is in fact a reversal of previous full-year trends across the industry, which have seen declining admissions but increased spend per head among those who continue visiting, and may be explained in part by exceptional factors highlighted by Gala Coral in its results.

Year-on-year admissions growth across the early months of 2014 is likely to be exaggerated by comparison with a corresponding period in 2013 in which severe winter weather discouraged many customers from going out to a club. Declining spend per head across the estate, meanwhile, was attributed to the impact of “a handful of clubs with specific, isolated issues”.

Cut-price play kick-starts growth

Not all the growth recorded in admission numbers was driven by external factors such as weather, though. Gala Coral reported that the full roll-out of its ‘Price Smash’ initiative (offering significantly reduced-cost play) during the quarter was the main driver of growth that ran 5.7% ahead of the industry average according to Bingo Association statistics. The importance of cost of play as a driver of visitation was further underlined by results for the Rank Group’s bingo division, Mecca, released in the same week.

Although Mecca saw customer visits fall 4% year-on-year for the 19-week period to 11 May 2014, the company reported improved admission and revenue trends following the introduction of its own value for money bingo sessions. Spend per visit was up 2%.

Value propositions prove most popular

The two major operators’ focus on financial incentives to play reflects the findings of consumer research conducted for Mintel’s Casinos and Bingo UK 2013 report. While this survey did not address cost of participation directly, it found that the most popular incentive to bingo club visiting was another value proposition – bigger prizes for the same price of play. This was popular with 19% of all current and potential bingo players, rising to 67% among those attracted by gaming-related offers rather than social or entertainment ones.

The impact of increased admissions has been particularly important for gaming machine revenues, which were up 6% for Gala year-on-year during the first 12 weeks of 2014 despite spend per head in this segment remaining unchanged. Gaming machines have – as in most other gambling sectors – been the main driver of market growth in recent years, with consumer expenditure on these products up 24% between 2009/10 and 2011/12 compared to 3% for bingo games.

However, Mintel’s consumer research showed extremely low levels of interest in gaming machine offers among current and potential club visitors. Just 3% would be encouraged to visit by the offer of bigger jackpots and only 2% by more machines.

Bingo clubs have a potentially attractive gaming machines offer but the research suggests they may need to look beyond their existing customer base and more obvious target demographics to reach the players to whom this will hold most appeal. The reduction of bingo taxation by the March 2014 Budget – from which Gala expects to benefit by £15 million a year – could create scope for investment in new club formats that appeal to new demographics with a stronger focus on machine play.

For more information, see Mintel’s Casinos and Bingo UK 2013 report here.

David has more than 15 years’ experience in the sport and leisure industry as an analyst, journalist and author. He has been working with Mintel since 2003 and has now written more than 50 reports for the company, specialising in spectator and participation sport, and gambling. David previously worked for the BBC, Independent News & Media, and the SportBusiness Group.

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