Is Gala Bingo Closing Up for Good?

July 18th, 2009

Gala Bingo

The Gala Coral group has recently announced major closures of its land based bingo halls. Over the last couple of years the group has shut down more than 20 of its clubs primarily due to poor profitability and dwindling membership numbers. The smoking ban and the amendments to the Gambling Act introduced last year have also had detrimental effect on the fortunes of the group. Thus, despite a favorable High Court ruling netting it over GBP 60 million in overpaid VAT, the group announced that it had to close down 5 more of its clubs resulting in more than 300 job cuts.

Even in the online bingo gaming space, Gala Bingo’s portal was once a force to reckon with. The sites featured innovative games which could not be found anywhere else on the web, giving it an exclusive edge over its competitors and ensuring its patrons of the highest standards of quality. However, this situation too has changed over the past few years. Many websites have started emulating the indigenous development model of Gala. Additionally some of the games which were introduced last year, like Monopoly for instance were developed by external parties because Gala did not possess the rights to produce the equivalent indigenously. More recently the portal introduced three other games-Transformers, Battleship and Dungeons and Dragons. The incorporation of these games signals that Gala is now slowly moving away from its previous strategy of having only home grown games; it now prefers to purchase licenses and games from external vendors. WagerWorks seem to be one of their favorite vendors for this.

Experts declare that this shift in strategy is also in part accountable for the decline in the fortunes of the online site; the portal compromised on the one component that was the key differential from competitors-its ability to innovate. According to a recently released report from Mintel, Gala and Mecca put together own only 23% of the online space; newer operators like Foxy Bingo and Crown Bingo dominate the market currently.

Gala could have migrated to this license purchase strategy from its indigenous development model for a variety of reasons. One, the turnaround time for a new game when it is from an external vendor is much faster than when it is produced in-house. The cost components are also much higher. When games are produced in-house, a lot of time, effort and resources need to be dedicated to create it byte by byte. And even at the end the entire concept could be scratched if it doesn’t work well with the site. Secondly, Gala does not possess the licenses to several of the internet’s most popular games, including Battleship and Transformers. So if they choose not to procure these from an external vendor, they would have to risk losing invaluable player traffic to competition.

With both its land based and online businesses plagued with problems currently, Gala Bingo is fast losing its position as the premier bingo gaming company in the UK. Gala Coral would definitely need to undertake a massive reorganization and realignment of its business strategies if it wishes to regain at least some of its past glory.

Tags: Bingo, Gala, gala coral group, GalaBingo, galabingo.co.uk, galabingo.com, online-Bingo

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Is Gala Bingo Closing Up for Good?

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