The owner of Mecca Bingo, the Rank Group, has been rocked by a major payment fraud within its Spanish operations, resulting in a financial hit of €7.1 million, equivalent to approximately £6.2 million.
Shares Tumble as Fraud Uncovered
News of the significant fraud sent shockwaves through the market, with shares in the FTSE 250-listed company plunging by as much as 9% during Monday morning trading. The Maidenhead-based firm confirmed the incident relates to its Spanish businesses, which operate under the Enracha and Yo brands.
Rank has moved swiftly in response to the discovery. The group has formally reported the matter to the relevant law enforcement agencies in Spain and is fully supporting their ongoing investigations. Simultaneously, Rank has launched its own comprehensive internal probe, enlisting the help of an external law firm to assist.
Financial Impact and Broader Challenges
The company stated that the £6.2 million loss will be treated as an exceptional and separate item in its financial results for the 2025/26 period. This fraud compounds existing pressures on the gambling giant, which is already grappling with a substantial tax increase.
Following the autumn Budget, which confirmed a rise in the remote gaming duty from 21% to 40%, Rank warned that its annual earnings would be reduced by around £46 million. A £6 million benefit from the abolition of bingo duty will only slightly offset this, leaving an estimated net negative impact of £40 million.
Future Outlook Amidst Regulatory Reform
Despite these twin setbacks, the group has pointed to reasons for optimism. In a statement, Rank referenced recent investments in product offerings and customer risk management, which it believes will support performance.
Furthermore, the firm anticipates a boost from recent government reforms for land-based casinos, which include easing restrictions on the number of gaming machines and allowing sports betting. Rank expects to introduce an extra 850 gaming machines into its venues this year as a direct result of these changes.
Analyst Greg Johnson of Shore Capital noted that the payment fraud is being treated as an exceptional item and therefore does not alter the firm's underlying profit outlook. He suggested that Rank's interim results, due on January 29, are set to show "continued strong momentum and the first benefits from land-based casino reform," which he described as "transformational to the outlook for Rank."
