Rank shares boosted after hints of government lifeline to bingo industry

Shares in Rank, which owns the UK's second-largest bingo chain, jumped 6.5 per cent yesterday after hints that the Government may be about to throw the floundering industry a lifeline.

Speaking at the annual general meeting of the UK Bingo Association, Gerry Sutcliffe, the sports minister, said that both he and the Prime Minister were sympathetic to bingo's problems, and that he expected to announce measures to help address these difficulties in the next few weeks.

There is no doubt that bingo operators are suffering. Some 13 clubs have closed this year. The private equity owners of Gala Coral, the largest chain, have had to put up an extra £125m to ease the group's financial stress. And Rank issued a profit warning last October that wiped more than 20 per cent off its value.

Part of the problem is the smoking ban, with slowing consumer spending adding further woes. But the industry mostly blames the Government. The main gripe is the "double taxation" that levies VAT on bingo's participation fee, a charge not imposed on any other form of gambling. The other bone of contention is last year's Gambling Act, which re-classified slot machines and imposed limits on the number of high-prize games in different types of venue, taking a huge bite out of bingo halls' incomes.

Despite the boost in investor confidence after the minister's speech, the industry is more cautious. Paul Talboys, the chief executive of the Bingo Association, said: "The industry is encouraged to see that the minister clearly has a genuine interest in the plight of bingo. But the industry is operating under extremely difficult circumstances and the Government's failure to address that double taxation issue in the Budget places great emphasis on any positive statement the minister may make. Any celebration at this time may be premature."