Tag Archives: uk bingo industry
Gala Bingo Considers Rescue Plan
It is no secret that land based bingo in the UK is in real trouble financially. The draconian national smoking ban hit bingo clubs hard and then came a rise in taxation. For some reason bingo is taxed at a higher rate than any other form of gaming. For gaming companies that operate internet bingo websites the passage of the internet gaming ban in the US caused a drastic drop in revenue and a serious decline in publicly traded gaming stocks. A recent Reuters report states that UK bingo industry giant Gala Coral Group is presently saddled with about 2.7 billion pounds of debt.
Gala was forced to let hundreds of valued employees go and close many of its popular bingo halls across the UK. In 2009 reports of gala bingo club closures became common in the press. Gala also operates a highly successful internet bingo website. Without private investment Gala faces a bleak future indeed. A few years ago when reports said Gala was foundering US gaming giant Harrahs made a bid for shares of Gala. At the time Gala was able to repel any hostile takeover.
In November it was reported that private equity firm Blackstone made a £300 million pound bid for 40 to 60% of the shares. Despite denials from Gala it has been reported that Gala is actively seeking private equity investors to stave off collapse of the company. A recent report from news agency Reuters said the bingo giant had been approached by US private equity firm Apollo. Apollo submitted a plan to Gala which said Apollo would pay 250 million pounds ($405 million USD) for half of the company. The conditions of the Apollo deal say that 250 million pounds would be paid to Galas senior lenders and junior lenders would receive the other half of Gala.
Gala has entered the world of internet bingo with some success. Gala provides players with a generous bingo deposit bonus and free play options. Gala also offers a bingo sign up bonus to players. Like most other UK based bingo sites Gala has increased the size of its bingo bonuses to compete with others in the internet bingo industry.
Galas situation highlights the troubles of the brick and mortar UK bingo industry. Internet bingo, on the other hand, remains a thriving and growing industry. Internet bingo has defied the global recession and remains profitable for internet bingo providers. Gala may want to consider focusing on its online operations.