Online bingo and Darling's Budget threaten Gala jobs
Posted by Gavin Smith on 19 Jun 2009 at 10:06
HUNDREDS of jobs are believed to be under threat as Gala Coral prepares to close unprofitable bingo clubs.
The privately held company is reportedly preparing to hold meetings with staff about its plans to close at least six of its 156 clubs.
This could lead to around 180 more jobs lost on top of 200 staff cut in November by the company last year.
Gala Coral, which also owns the Coral bookmaking chain and employs around 19,000, was unavailable for comment.
Bingo clubs have been hit hard by a series of problems, including the smoking ban, the growing popularity of online bingo, restrictions on gaming machines and the economic downturn.
In April's Budget, Chancellor Alistair Darling cut VAT on bingo, but hit the industry with a shock rise in bingo duty, from 15 per cent to 22 per cent.
Gala Coral's nearest rival, Mecca Bingo owner Rank, rushed out a profit warning following the Chancellor's move.
Rank expects an extra £6 million in costs this year as a result of the tax hike, rising to £9m in future years. Both companies own a string of casinos, but these have also been hit by the Treasury imposing gaming duty on casino card rooms.
Gala Coral, owned by private equity firms Candover, Permira and Cinven, saw underlying earnings fall 10 per cent to £362m in the 12 months to 27 September last year, while revenue fell 3 per cent at £1.27 billion. The firm, based in Essex, also has £2.5bn in debt and is said to have asked investment bank Lazard to examine refinancing options.
