In the UK, land-based casino operators have closed nine sites over the past twelve months as the effects of the worsening economic climate begin to take their toll.
According to a piece in The Observer newspaper, casinos in Great Britain have fallen victim to a Government tax increase in addition to a recent smoking ban in addition to the worsening economic climate. The cumulative effects have seen Barking-based Gala Coral Group Limited, the firm behind the Gala Casinos chain, close four sites including its venue on London's Picadilly Circus.
Gala Coral is one of Britain's largest private equity-owned employers and has seen losses more than treble as trading at its casino and bingo divisions slow. Despite the injection of $184 million from backers Permira, Cinven and Candover over the previous twelve months, the company published figures this week showing a pre-tax loss for the year of $591 million to bring its net debt to $6.55 billion.
Britian’s largest operator, Genting Stanley, recently shut two sites in Liverpool and Manchester and axed 400 staff as it deals with an ongoing pay dispute with the GMB union. Genting Stanley recorded a loss before impairment and interest of $16.39 million for the previous nine months compared to a profit of $32.72 million for the same period of 2007.
“The loss from casino operations in the current nine-month period was mainly due to a combination of lower business volume, lower luck factor, write-offs due to closure of casinos, bad debts and higher gaming duties pursuant to the change in gaming duty rate from April 2007,” read Genting Stanley’s financial statement.
“These closures, and I fear there will be more to follow, are stark evidence of the pressures faced by the industry in the UK to which the Government has made a significant contribution, not least with last year's large tax hike,” said Peter Brooks, Executive Deputy Chairman for Genting Stanley.