Listen to this article:Buzz Bingo could soon be under new ownership, according to reports that private equity firm ICG is considering a sale of the business. ICG, which acquired Buzz Bingo in 2021, has appointed specialist corporate finance advisers Oakvale Capital to oversee discussions with potential investors. The aim is reportedly to attract new investment and provide funding for the operator’s future growth.
The news comes at a time when Buzz Bingo has been reporting higher revenues and an increasing number of customers. However, the company is also facing rising costs and the possibility of further gambling tax increases.
ICG took control of Buzz Bingo during the Covid-19 pandemic, when it acquired the operator from Caledonia Investments for a nominal sum. According to reports, private equity firms are expected to be among the potential bidders for the gambling operator. However, the process is still at an early stage, and there has been no confirmation of an interested buyer or how much the business could be worth.
This is not the first time that ICG has considered selling Buzz Bingo. A similar process was launched in 2023, with investment bank Nomura appointed to manage it, but the proposed sale was eventually abandoned. Both ICG and Buzz Bingo have declined to comment on the latest reports.
The news of a possible sale comes after a period of improved trading for Buzz Bingo. The operator generated £241.4 million in revenue during its latest financial year, which was an increase of 11% compared with the previous year. There was growth in both its land-based clubs and online business.
Perhaps even more encouraging was the number of new players visiting Buzz Bingo clubs.
The company attracted around 190,000 new retail customers during the year, and approximately half of them were under the age of 35. This is particularly good news as the industry has been working hard to attract younger players with themed events, new entertainment formats and modernised clubs. Buzz Bingo also reported that admissions and revenues had both increased for the first time since the smoking ban was introduced in 2007. The improvement appears to be continuing, with new retail customers up by another 12.4% during the current financial year.
However, the financial results were not entirely positive. Underlying EBITDA fell to £39.2 million, while the company’s pre-tax losses increased to roughly £65 million. Therefore, while more players are going to Buzz Bingo and it is generating higher revenues, the business is still facing real financial pressures.
Another worry for Buzz Bingo and any potential buyer is the possibility of higher gambling taxes.
The government abolished Bingo Duty in April this year, which was a move welcomed by the industry after years of campaigning. However, there are now concerns that Machine Games Duty could be increased in the Autumn Budget on 28 October.
Gaming machines are an important source of revenue for bingo halls, and an increase in the tax charged on them could make some clubs less profitable. Buzz Bingo chief executive Dominic Mansour has already warned about the possible consequences. He explained: “Unless bingo clubs are protected from such reform, the viability of bingo in the UK will be at risk.”
Mansour has also warned that another tax increase could result in bingo club closures and put jobs at risk. These concerns are shared by other operators and the Bingo Association, which has been calling on the government to recognise the importance of bingo clubs and the investment currently taking place across the industry.
Buzz Bingo is one of the UK’s biggest bingo operators, with more than 75 clubs across the country and over 2,000 employees. The company has been investing in its venues and has carried out a number of refurbishments of its clubs, such as at Buzz Bingo Colchester. It has also been experimenting with smaller venues, such as its Boutique Bingo club in Borehamwood.
A new owner could provide more funding for similar projects, as well as further investment in the online business. However, much will depend on who eventually buys the company and what their plans are. There is no suggestion at present that a sale would automatically lead to changes at individual clubs. For now, nothing has been agreed, and although ICG is considering a sale, it may ultimately decide not to proceed, as it did in 2023.
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