Rank Group CEO John O’Reilly cuts a relaxed figure over the phone the morning of the omnichannel operator’s full-year 2024-25 results being published. Despite the business facing multiple hurdles in its core markets, including potential tax hikes in the UK and a lengthy licensing process to launch online bingo in Portugal, the boss is taking it in his stride.
On the financial front, Rank’s NGR was up 11% to £795.3m in the 12 months to 30 June, with digital and the Grosvenor venue performing well. Significant investments have gone into the tech to support such growth, with O’Reilly planning to add more to the offering in the coming months.
A flat period of growth in Spain will be fixed, according to the CEO, while the proposition of being the only online bingo firm in Portugal is an appetising one. On home soil, slots stake limits, the new levy and potential tax increases are top of the agenda. But, O’Reilly feels relaxed on the triumvirate. “It is what it is,” he tells EGR.
EGR: What are your reflections on the 12 months to 30 June 2025 for Rank Group?
John O’Reilly (JOR): It was a good year and a good performance. The strongest growth in the business is where we’ve been investing the most. Grosvenor Casinos’ revenue was up 14% in the year, and the digital business up 11%. The UK digital was up 12% and we were flat in Spain.
Overall revenue for the group was up 11% and all businesses were in growth. Operating profit for the group is up 38% year on year to £63.7m and that’s a little bit ahead of where we thought we’d be at this point. So we’re pleased with that, too.
Land based regulations for casinos are now in force. We waited a long time but are delighted that we’re at what is an important inflection point, I think, for the group. We are also, of course, introducing sports betting into our venues. So, the journey we’re on, which is towards delivering a seamless, cross-channel experience, is making good progress.
There’s a lot more work to do this year as we deliver on that, but we’re in a good place and making good progress.
EGR: Looking at digital, where lots of investment has gone into the business, can you elaborate on your outlook for the segment?
JOR: Going back in time, we weren’t really players in the digital market, and today it’s 42% the group’s profitability. We have really moved on. It’s lots of hard work, lots of energy, but above all, the investment.
Upfront was the investment in the Yo business in Spain, and then the acquisition Stride Gaming, and then the investment we put into those two platforms to move both businesses along, gradually migrating all of our brands onto those platforms.
We don’t necessarily compete head on with a lot of the other brands in the marketplace. Our strong suit is playing to people who play in the bricks-and-mortar world. The cross-channel piece is critically important to us. The consumer who likes to play in a bricks-and-mortar casino typically also plays online. Something like over 70% of customers who play in a casino in the UK also play online and that is very much our sweet spot. That’s the market we play to.
EGR: Staying in digital, average revenue per user was up 18%. Is that a case of actives declining but the customers you retain are of more value?
JOR: We are probably giving a bit less value to customers who are very infrequent players than we were 12 months earlier, or certainly two years earlier. We’re probably giving you a bit less value, a bit tighter around bonusing, and with more value going to players who playing with us more frequently.
That does impact upon active players. The other metric in there is our fraud protection systems get ever better. That does have an impact on perceived player numbers because it’s obviously difficult to distinguish between a bot and a consumer when you’re drawing up the stats at the end of a financial year.
Our customers are playing more days a week than they’ve ever played, staying for longer than they’ve ever stayed and are more valuable customers as consequence.
EGR: On UK regulations, the report said you are anticipating a circa £4m hit to digital profitability due to the online slots stake limits. Is this a one-time hit and will it be lapped next financial year?
JOR: Not many players start playing an online slots game with stakes of more than £5 a spin, but when players are winning, they like to play up their winnings, and that opportunity is now not there. So that does have an impact on stakes, inevitably. It’s about £8m to £9m per annum impact on revenue and the impact of that is about £4m in terms of operating profit.
I don’t think we’re losing customers. We haven’t got any evidence of losing customers. It’s just that customers who previously would, when they were winning, increase their stakes, are now not in a position to do so. I think that’s the revenue we’re losing.
EGR: The statutory levy also came into effect in April and we’ve heard GambleAware is due to close in 2026. What are your thoughts on the changes to the model?
JOR: It is what it is. We’ve moved from the voluntary position we were into the statutory position today. The cost is £2.8m per annum to the digital business in terms of profit impact. We’ve known about it for a long time. It’s been in our forecast forever and a day now, and it is what it is.
EGR: Potential UK tax hikes have taken up plenty of column inches in recent weeks. Are you confident the Chancellor and the government are going to listen to the industry’s concerns?
JOR: We entertain millions of people every year, and we employ over 7,800 people. For a business that has an operating profit of £63.7m, that’s pretty remarkable ratio. We employ a lot of people and we pay an inordinate amount of tax. If you work in this business, you accept that is the case and actually welcome that is the case. Our profit after tax was £44.6m, and in the same 12 months we paid £189m in tax.
There are two things here. On the one hand, there are some think tanks that are anti-gambling, who published proposals about 50% rates of tax and so on. The reality is, those tax rates would wipe out the vast bulk of the regulated tax sector in the UK.
The Treasury is very conscious about that. What the Treasury has completed the consultation on is this harmonisation of tax into one. You’ve got to think it’s going to be a better than even money chance that it’s harmonised at 21% rather than 15%. If that is the case, it’s not that material to the group – it would be about £1m a year, something like that. I’d rather they didn’t do it because sports is an area that we would like to further develop.
We’d like that not to happen but if it happens, it happens, so be it. Ultimately, the Treasury will recognise that businesses like ours today pay an awful lot of tax.
EGR: Do you share the same concerns that a tax hike could lead to black market leakage and worse consumer protections?
JOR: I think the answer depends on the rate of tax. Inevitably, the higher the rate of tax, then the less competition exists in the market and the more the consumer goes offshore to seek better value. I mean that’s just straight economics. The Treasury recognises that. The higher the tax, the more the regulated market ceases to deliver an effective offer to the consumer.
EGR: Finally, could you give us an update on the Spain- and Portugal-facing businesses?
JOR: In Spain we were flat. A bit disappointed, but we’ve got a capacity constraint. We can’t get enough players into our bingo rooms. We launch the new bingo platform any week now, and we’re super confident we’re going to get the business back into growth by the end of H1, because historically, we’ve been growing that business by double digits.
And after a long, long wait, we’ve concluded our licensing process in Portugal, and we’ll be launching in Portugal in the coming months. The only good thing about having to wait so long is that there are relatively few licences in the Portuguese market. Not surprisingly, we will be the only, and the first, online bingo site with YoBingo in the Portuguese market.
The post Q&A: Rank Group CEO on tax hikes and digital progress first appeared on EGR Intel.
John O’Reilly says the UK Treasury recognises that gambling firms pay an “awful lot of tax” already, as fears around significant increases for sports betting and online casino continue to mount
The post Q&A: Rank Group CEO on tax hikes and digital progress first appeared on EGR Intel.