Q&A: Rank Group on moving on from Covid-19, Spanish travails and digital plans

As the UK’s largest land-based casino operator, Rank Group took a significant hit from lockdown measures imposed by the UK government as part of its response to the Covid-19 pandemic, as so many other land-based gambling businesses. Fast forward to today and Rank is slowly but surely moving forward with its operational plans following the necessary hibernation during the pandemic. Earlier this week, the London-listed group posted a 98% year-on-year (YoY) increase in its group net gaming revenue (NGR) in 2021/22 to £644m, results buoyed by its returning venues business (which saw growth of 209%) and digital business (which grew by a modest 4%). EGR Intel chatted to CEO John O’Reilly about the group’s plans going forward and how regulatory changes in the UK might play out.

EGR Intel: Why did you choose to revisit the purpose and mission statement of the Rank Group?

John O’Reilly (JOR): The mission statement and our strategic pillars are, in effect, under constant review and revision as we assess changing customer needs and reassess our corporate capabilities. We wanted to dial up the emphasis on providing a seamless service to cross-channel customers, particularly in light of the opportunities provided by our proprietary platform capabilities. We also wanted to put more focus on the sustainability of our business, underscored by our ESG report and the progress we are making in that space, to make sure that this comes through clearly in all that we are doing.

EGR Intel: In what ways would the imposition of a statutory levy and blanket ban on free bets as part of the Gambling Act 2005 review “curtail” Rank’s competitive abilities?

JOR: What’s happened in the Spanish market is probably what you would expect to happen in the UK market. It’s an interesting case study, nonetheless, as the number of new customers is markedly down on what it was before the decree was passed in May 2021. It didn’t ban advertising entirely, but you can now only advertise between 1am and 5am, which is not great. It also banned any promotion, any incentive, any free bet to consumers until they had registered, or had been with the operator for more than 30 days and had opted in at the point of registration to receive free bets bonus offers. Effectively, that means that you can’t offer a new customer something for coming on board. The impact of that in Spain is it’s more than halved the level of new player acquisition, acquisition costs have shot through the roof, unsurprisingly, but also the value of a customer has also shot through the roof.

So, because there’s less reason for customers to be promiscuous, less reasons for people to jump from site to site, they stick with a site or sites they’ve registered with. Take that to the marketplace, we’ve got we got a business called YoBingo, which is 50% of the online bingo market in Spain, well, you know, fantastic, there’s less competition. We’ve also got a casino business, which is just a fraction of the market, but it’s much tougher because it’s very difficult to compete, and when you can’t compete with offers to the consumer, then that’s a challenge. So, in the UK, if there were tight constraints on free bets promotion offers and so on, what that does is it constrains competition in the market, which is good for market leaders but not good for challengers.

EGR Intel: YoSports and Enracha were impacted by Spanish advertising restrictions during 2021/22. In what ways have you changed your marketing strategy to accommodate this hardened regulatory environment?

JOR: Clearly the cost of acquiring customers has increased as a result of the constraints that have been implemented.

This has led to us putting the bulk of our acquisition spend through digital media channels rather than some of the more traditional broadcast media channels. It has also led to more focus on our existing customer base as we seek to increase the share of wallet, with elevated focus on retention and reactivation of existing customers.

EGR Intel: Can you provide some more detail on the Enracha and YoSports development and launch expectations?

JOR: We’ve got to wait and see really because we do face that promotional challenge up front, but nonetheless, the promotional environment itself is a lot more of a level playing field due to odds. We’re currently testing it with customers. It’s been built out and will be subject to customer feedback over the next few weeks. We expect to go live after that but it does depend on what feedback we receive from customers. We’ve invited customers to come and play on the site – it’s currently hidden live – they’re playing with their own money. It’s only a small sample of customers but I expect we’ll get plenty of really good feedback about user journeys which will help us make improvements.

We want to go live in the next few months – we’re targeting the World Cup – but we’re already a good bit ahead of our timetable, which is great. Having said that we might find from customer feedback over the coming few weeks that there’s more refinement we need to do before we move it from hidden live to live, but we’ll know more soon.

EGR Intel: Can you tell us more about the recruitment you’ve made across the digital business?

JOR: We continue to strengthen our management team across all elements of our digital business. Our customer support, finance and operations hub in Mauritius has expanded and benefits from a great management team.

When we completed our acquisition of Stride we had  around 100 colleagues in Mauritius and now we have more than 300. We also have a growing team of software engineers in our new Cape Town office who are focused on developing the proprietary platform.

A new MD in Tel Aviv is overseeing the performance marketing team, and our commercial team in Gibraltar has recently been strengthened and is doing a great job to deliver some good numbers for Rank.

EGR Intel: What are your action areas for the coming financial year, specifically in digital?

JOR: We’re putting a relentless focus on delivering a seamless service to our customers through our cross-channel capabilities. We’ll be improving our AI-driven personalisation capabilities for sports and gaming, working through a roadmap of improvements for grosvenorcasinos.com following its migration to the RIDE platform, as well as launching YoSport and YoBingo in Portugal.

Our cross-channel focus will include the extension of live online streaming from 4 Grosvenor venues, more personalisation on omnichannel online content to reflect a customer’s local club, and a unified Mecca membership system that brings personalised content and improved cross-sell between our venues and online.