In an article penned in February 2010, Steve Donoughue surveyed the state of land-based bingo. In this update, he and Fabian Adams-Sandiford propose an alternative business model for the ailing industry.
Traditional land-based bingo has been in decline for many years. As far back as 1992, the Gambling Commission’s predecessor, the Gaming Board for Great Britain, noted that the number of bingo clubs had fallen below 1000 and observed that this was “a continuation of a long-term downward trend since 1974”. What has changed recently is the pace of that decline. According to the Bingo Association’s most recent figures, attendances are falling by more than 10% each year and dozens of clubs are closing every year (more than 100 since 2006). The industry is doing its best to respond to this problem: some operators have separated their gaming and social areas; others are offering larger prizes; and a few have even tried to attract new younger players by combining house music with bingo. However, it is fighting powerful demographic and social forces over which it has precious little influence.
These demographic and social forces are well-understood. The majority of current bingo players are women over-50 from the C, D & E social grades. The younger women who would once automatically have replaced this cohort now have a wide range of leisure options (including, of course, online bingo) and they are increasingly choosing these rather than land-based bingo. They still attend the odd bingo night, on special occasions, but they do not go on become regular patrons attending two or three times a week. The challenge for bingo operators is to adopt a business model that reflects this 21st Century reality.
In our view, this will require a fundamental change of mindset on the part of the industry. Operators must recognise that the fact some of their clubs are no longer viable gambling businesses (that is, offering two bingo sessions each day, 7 days a week) and instead they should treat them as viable self-funding social enterprise businesses, focussed on meeting a range of community needs. The bingo industry has talked around this issue for a number of years. In 2007, the Bingo Association published “The Social Impact of Bingo Club Closures”, a report highlighting the role that bingo clubs play in social interaction and in promoting a sense of belonging to a local community. What the industry failed to do was to follow this argument to its logical conclusion, and use it as a spur to reinventing itself. Instead the report was used to justify another call for more favourable tax treatment and lighter regulation.
And yet the logical conclusion to draw from the report is that salvation – or at least survival – lies precisely in building on bingo clubs’ closeness to their communities. Rural pubs have faced similar problems to bingo clubs, and many of them have recast themselves as rural community hubs by incorporating shops, post offices and other services into their premises. Since 2001, with the help of the ‘Pub-is-the-Hub’ campaign, dozens of local pubs have successfully diversified and staved off the threat of closure. Bingo operators should adopt a similar approach and recast their clubs as themselves as ‘urban community hubs’.
Clearly, it would make little sense for a bingo club to offer post office or shopping facilities. Bingo halls are located in urban environments and these sorts of facilities will be available only a few doors down on the High Street. However, there are a number of other community-driven commercial services that could take advantage of bingo halls’ unique mix of facilities (seating, stage, screen, bar and kitchens, etc) and/or any available downtime. The key is to let each club respond to their own local circumstances and to meet local needs. At one end of the spectrum, a club in an area of high unemployment might partner with its local Jobcentre Plus to host a job club on three mornings each week. Nearer the middle of that spectrum, a club in an area characterised by high levels of women in part-time employment might focus on providing childcare services in partnership with the local council, such as a crèche on weekday mornings and a matinée cinema for children on Saturdays and Sundays. At the farthest end of the spectrum, bingo operators might opt for something much more radical: Big Society Bingo, if you will.
Under this ‘Big Society Bingo’ model, operators running marginally profitable bingo clubs - that they would otherwise close – would approach the local communities in which they are located and offer to run the facilities in partnership. The operator would remain the landlord of the bingo hall, but would rent it to a community group. This group would take on the running of the hall, staffing it with volunteers and making it available for community use on a not-for-profit basis. The bingo operator would continue to offer bingo on the most commercially-attractive days and keep any revenue from the bingo, the machines, and from sales of food and beverages. During the remainder of the week, the community group would have unlimited use of the hall and keep any revenue from renting the hall, from the machines and from the sales of food and beverages (much like a working men’s club). By entering into an arrangement of this kind, the bingo operator is able to maintain a presence in the local community and derive revenue from bingo on the most profitable nights, without the long-term costs of staffing and running the premises. In return, the local community has use of large, well-equipped and maintained premises that are ideal for a wide range of community activities.
The cuts to public expenditure announced a few weeks ago provide a unique opportunity for bingo operators to begin making this transition from bingo hall solely used as gambling venues to bingo halls which are used as urban community hubs. This may mean planning and licensing regulations need changing, but surely that is part of the Coalition’s strategy of removing central bureaucracy and localising service provision? Hard-pressed local authorities are actively looking at ways to reduce their expenditure, and their eyes are falling on discretionary services. It is likely that many authorities will step back from direct service provision, and mothball or close the associated facilities. Instead they will look to procure services on behalf their communities, and there will be considerable demand for high-quality, multi-use and centrally located facilities. Bingo clubs are well-placed to step into the breach, and – through their club managers - operators should open exploratory discussions with their local councils, their local CAB, and other community organisations as soon as possible.
Club managers, staff and customers will know which local services and facilities are under threat due to the cuts, and they will also have a good idea of whether or not these can be replicated on site. Similarly, managers, staff and customers will know of other local voluntary services that might also be incorporated. Where operators’ central teams can add real value is in evaluating the commercial viability of the new offerings and in disseminating good practice. It will be vital to the entire enterprise that profitable bingo sessions are not lost in the drive to add new services.
That said some operators may find this change easier to navigate than others. For example, small regional operators are likely to have deeper roots in their local communities, and closer links with local authorities and voluntary groups than the large national chains. However, the large nationals should work to build these links as they perhaps have the most to gain from the new business model. At present, their balance sheet-driven business models actively work against local innovation and risk-taking. Their response to declining profitability has typically been closer central oversight of the affected clubs, rigorous programmes of cost-cutting and – ultimately – closure. This may reduce the impact of the struggling clubs on the rest of their businesses, but it makes no effort to sustain the bingo industry in the longer term. Under the Big Society Bingo model, the larger operators will have to learn to let go, giving their individual clubs more leeway, not less; more freedom to find alternative sources of revenue. And by retreating from all but the delivery of profitable bingo in their land-based clubs, all operators will be able to focus on the growth area of their business and the real future of bingo: online bingo.
©Steve Donoughue, Fabian Adams-Sandiford – 2010