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UK Bingo Operation Forced to Cut Jobs


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This week large UK bingo and gambling operation, the Gala Coral
Group
, announced that it will cut 45 jobs from its head office in another
cost-cutting exercise to help the struggling firm overcome the country’s 2007
smoking ban, increased taxes and new laws that have knocked the firm’s
profitability.

News of the job cuts has come not long after the Gala Coral Group closed some of
its high street bingo halls and cut 300 jobs from others. Since the smoking ban,
Gala’s customers have been forced to smoke outside which means they play less
interval and slot games, a once crucial source of revenue for the group.

Coupled with other recent laws limiting the number of fixed odds gambling
machines allowed in bingo halls, Gala has been struggling to keep profits up and
pay off a hefty GBP2.5 billion debt. The Gala Coral Group’s head office job cuts
were the result of decision to integrate its land and online marketing
divisions.

The online division focuses primarily on the operation and marketing of
Galabingo.com, one of the UK’s most popular online bingo casinos. The good news
for online bingo fans is that despite the job cuts, Galabingo.com will continue
to operate as usual.

Over and above bingo, the Gala Coral Group has interests in casinos and
bookmaking, and operates four brands in Europe; Coral, Gala Casino, Eurobet, and
Gala Bingo. The question financial analysts are asking is how much longer Gala
can weather the storm, which has not been helped by the current economic slump.

Added to that, as part of this year’s budget the UK Treasury announced that it
was going to increase taxes on the UK bingo industry from 15 percent  to 22
percent.

In February 2003, private equity firms Candover and Cinven acquired the Gala
Coral Group for GBP1.24 billion. In August 2005 a third investor, Permira,
bought a sizable stake in the company. Currently the Group employs over 19,000
people across its various divisions.

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