The chief executive of Rank has played host to David Cameron and Alistair Darling at the group’s bingo and casino clubs, but the Prime Minister remains stubbornly elusive.

“I’ve not yet been successful in persuading him to come and visit. I’ll keep trying,” says Burke.

Burke has plenty to discuss. The 52-year old has just used the platform of Rank’s 2009 results to lay out a template for change that would see taxation of the British gaming industry radically overhauled.

Approaching his fourth year as chief executive of Britain’s only listed bingo and casino operator, it is one of the first times Burke has been able to do much more than focus on his own hand.

Ian Burke, Rank chief executive, has hit out at Britain's 'unfair' system of taxation for gaming operators

His first year was spent consolidating operations following the sale of Rank’s Hard Rock and film businesses, before the company was hit by the perfect storm of rising taxes, the introduction of the smoking ban and the prohibition of lucrative gaming machines.

“It’s been an interesting period,” Burke, an unassuming leisure industry veteran says with more than a touch of understatement. “2007 was a tough year but since then, as we’ve focused on taking actions to stabilise the business, we’ve started to enjoy ourselves a bit more.”

Rank’s trading figures give credibility to a change of mood. While the company remains far from a leisure industry darling, it is finally putting the past behind it and last week reinstated its dividend for the first time since flirting with a banking covenant breach in 2007.

“Like any other business we’re still exposed to the vagaries of the economy and like most we’re expecting only fragile growth, but broadly we think the worst is behind us,” says Burke.

Revenues rose 3.4pc to £540m last year, while a pre-tax loss of £26m in 2008 – albeit linked to pension charges – was turned into a £52m profit. Trading this year also shows revenues in Rank’s casinos, Spanish and online business increasing.

With revenues on the up, Burke has turned his attention elsewhere, hitting out at Britain’s “unfair” system of taxation for gaming operators, a situation he blames on “40 years of piecemeal legislation”. The latest blow came in last year’s budget when the bingo operators suffered a tax hike from 15pc to 22pc, a move that came out of the blue.

“The Government keeps looking at aspects of the gambling sector and changing legislation, but if you step back you see a patchwork quilt of tax regimes,” he says. “If you go to a casino tonight and play poker, the tax rate on the revenue from that could be 15, 20, 30, 40 or 50pc. If you go to a poker club the tax rate will be 22pc, but if you play at home it will be zero.”

Burke is arguing for a level playing field, calling for a flat 15pc rate of tax on all gaming companies. The plan will take some selling and will meet with outright hostility from some.

“On the face of it, the only ones who would be really against it would be the operators of offshore online gaming businesses,” says Burke, who admits he has faced opposition from staff in Rank’s own online business, which is based in the Channel Islands. “Bingo operators will be paying 20pc post the Budget, casino operators 15pc to 50pc and bookies 15pc. The proposal is pitched at a level where they should all be happy.”

Burke appears to be optimistic about the plan, which is tax neutral for the Government. Rank’s effective tax rate is 17pc to 18pc, so it would benefit from the change, but Burke insists that is a secondary concern.

“We’re not arguing this from the perspective of something that will benefit Rank,” he says. Rather the lack of parity with online operators, and the potential for surprise tax moves that lead to profit warnings, as last year’s bingo tax hike did, is the driving force. Against that backdrop, is Burke – a Liverpudlian and the son of an engineer – a shoo-in for a Conservative vote at the election?

“I’m not going to tell you,” he says, before underlining the Tories’ credentials. “Conservative governments have been more liberal around gaming, in terms of deregulation. It’s their approach of individuals taking responsibility for their own actions.”

The Tories have backed a reduction in bingo tax from 20pc to 15pc, but any change will come only when public finances are in better health, Burke admits.

In any case, he admits Rank’s bingo blues in recent years have not all been down to being served a poor hand.

“We’re not saying the bingo industry’s problems can all be laid at the Government’s door,” says Burke, before pointing out that Rank first hosted bingo games nearly 50 years ago. “Bingo has served the community well but it didn’t see much of a need to change. The food and beverage offer, for example, has just not kept pace with the leisure sector. A level of complacency settles in.”

Trading in Rank’s bingo division has stabilised but many in the City believe the industry is in terminal decline. The number of UK clubs has fallen from 696 in 2004 to 564 today, of which Rank operates 103. Burke sees another 50 clubs or more closing in the industry over the next three years.

“I know some people are not convinced the future is bright, and I understand that,” Burke admits. “But we were always confident it had a future. Of course, we have to play our part by modernising it, without alienating our very loyal existing customers.”

While doubts persist about the UK bingo business, it is not the weakest card in Burke’s hand. Rank’s operations in Spain – where it has 13 bingo clubs – and its sports betting business, formerly known as Blue Square, present even greater challenges.

Revenues were down 8pc in Spain in 2009. “Things feel as though they are improving but we have had a difficult few years. Four million unemployed in a country of 46m is scary,” Burke says.

Rank is gaining market share, but the company will now focus on modernising the business in a similar vein to changes made in the UK, where late-night offers and games targeted at younger people have worked well.

Rank also plans to launch a Spanish bingo brand online this year, while it is looking at similar moves in Italy, Sweden and France.

Revenues were down in 2009, however, dragged back by the sports book. Rank put Blue Square “up for review” last year – industry code for “up for sale” – but ultimately rowed back.

“It’s code as much internally as it is externally, in terms of saying we want to give you a chance to turn it around, but be under no illusion you have to turn it around,” Burke says. “We’ve not done a great job with the sports book over the past few years, but we’ve been improving the product. That said, I wouldn’t say we’re close to being pleased with the performance.”

Investors will welcome such talk. Rank’s performance in recent years might not be Gordon’s Den out of Gordon’s Den – that’s 10 out of 10 among the bingo callers – but under Burke the numbers are certainly starting to come in.

source: telegraph.co.uk

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