Slot machine ruling could encourage Rank sale

By Marc Jones

FRANKFURT (Reuters) - A relaxation of UK slot machine laws expected on Wednesday could trigger a widely tipped sale or break up of UK betting firm Rank (RNK.L: Quote, Profile, Research).

Speculation surrounding the Mecca bingo, Grosvenor casino and BlueSquare.com owner has been rife ever since a trio of investors bought a third of the firm after new smoking and gambling laws sparked a 60 percent slump in the share price.

Some sort of deal looked odds-on when Rank offloaded its final salary pension scheme earlier this year. However, analysts didn't rush to sharpen their pencils.

Two things were holding them back. The first was that the credit crunch was in full swing so the timing for an auction was rotten.

More importantly though, bingo industry insiders were expecting the government to allow bingo clubs to put back thousands of highly lucrative slot machines that the new Gambling Act had forced them to remove.

Rank's Chief Executive Ian Burke would not have been a popular man with shareholders if he had sold the firm at a rock bottom price, only to see its profitability and value jump a few months later if and when the government delivered the goods.

They are now tipped to arrive.

Having told the Bingo Association's general meeting earlier this year that he would deliver some "good news", Sports and Gambling minister, Gerry Sutcliffe will finally tell Parliament his slot machine plans on Wednesday.