Bingo giant takes hit from rising employment costs

Buzz Bingo, the nation's leading bingo hall operator, has expressed disappointment over "significant" increases in employment costs, which have negatively impacted its earnings despite a surge in popularity among Gen-Z players. The company, formerly known as Gala, blamed recent hikes in employer national insurance contributions (NICs) and the minimum wage for a 6% drop in underlying earnings to £39m.

Despite hosting nearly 100,000 players each week across its 76 bingo halls, Buzz Bingo attributed its financial struggles to pressures from Labour policies.

The bingo group experienced an 8% increase in in-person players and a 30% surge in online customers in the year to January. However, its revenue grew by 11% to £241m. Buzz Bingo's accounts stated that the surge in customer numbers was offset by the significant rise in employer NICs and the inflationary increase in the national living wage. The company has been forced to limit spending on refurbishing its bingo halls and hiring additional staff due to the tax hikes.

Higher employment costs, which are particularly burdensome given the labor-intensive nature of the retail estate and the scale of the colleague base, "represented a substantial and largely unavoidable cost headwind for the group." Leisure companies have been increasingly vocal about the adverse effects of rising employment costs, warning that the higher taxes are damaging the sector, which heavily relies on a large workforce.

In May, Stephen Burns, CEO of Hollywood Bowl, described the hikes to NICs and wages as "incredibly painful" and highlighted that they have made hiring "significantly more expensive."

Buzz Bingo reported that half of the 190,000 new customers it attracted in the past year were aged 35 or younger. CEO Dominic Mansour stated that younger demographics, including Gen-Z and millennials, are increasingly embracing bingo as a fun, affordable night out. The company has invested in its physical clubs and online platforms, and over half of the new bingo players in its venues are now under 35, a trend that continues to grow.

Despite the revenue growth, Buzz Bingo reported a £66m pre-tax loss for the year, more than double the £32m loss from the previous year, which included an £18.5m hit due to an increase in the remote gaming duty tax.