US investment firm Apollo has joined the bid to take control of Gala Coral, the bingo and bookmaker giant. Apollo joins Blackstone and a group of Gala Coral’s lenders in the bidding war to gain control of the heavily-indebted gaming group.

Gala Coral are said to be in debt by a massive £2.6 billion and has been struggling for some time to refinance it. The new bid from Apollo will include a £250 million cash injection, which would be used to pay Gala’s senior lenders in return for 50% share in the company. The consortium of junior lenders would take the remaining 50% of the company in a debt for equity deal.

Gala Coral’s shareholders are likely to oppose the deal, which would see them left with nothing, and the junior lenders are also unlikely to accept the proposal as they are working on their own takeover bid.

Like many land based gaming companies Gala Coral has been struggling from a combination of the 22% bingo duty, the recession, online bingo sites and the smoking ban, which has seen players numbers dwindle over the past few years.

Ian Burke, the chief executive of the Rank Group told press that the drop in duty could boost profits by up to £2.5 million a year, but also stated that the duty cut should have been bigger. He said, “Today’s announcement is a step in the right direction. However, it is still not clear why Britain’s bingo clubs should be subject to a higher tax rate than that applied to other forms of gaming and betting.”

The Bingo Association, which was against the initial duty rise to 22% said, “the fight continues to get bingo back to the 15% rate”.

The bingo hall worker went to the kiosk and asked for a £2 scratch card, but instead was given a £5 scratch card. Instead of asking for the right card she decided to pay the extra cash saying: “I asked for a £2 card and she pulled out the £5 one by mistake,” adding that, “I’d already won £5 on another scratchcard so I decided to have a go. I rubbed it off when I got home later and I just couldn’t believe it – I’m still in a state of shock.”

Mrs White, who has three children, plans to pay off her mortgage and build a new conservatory with her winnings. The 58 year old continues to take the bus to her work at the Palace Bingo hall in Felixstowe and has no plans to quit her job, but does admit to changing the way she manages her finances.

She added, “I’ve got a private bank account in Mayfair and I’ve got my own private banker. This sort of thing doesn’t happen to an assistant bingo manager.”

The company have stated that they no longer make enough money and plan to close the hall in seven weeks time. General Manager for Orion Bingo, Roxburgh Richmond told the local press, “All the staff were told together, including myself and everyone is obviously very upset at the prospect of losing their jobs. It will also be very sad for our customers.”

This move will further disrupt bingo lovers in the area and follows another local bingo hall that closed in April.

On a lighter note for local bingo enthusiasts, Blackpool’s Mecca Bingo has announced that it is performing well in the current economic climate.

Bingo clubs had been lobbying against the tax hike, which rose from 15% to 22% in April, but the government stood by their decision after parliamentarians failed to make a strong enough case against it.

Land based bingo clubs have been facing an uphill struggle since the smoking ban in 2007 and a cap on the amount of £500 jackpot machines allowed, but the new tax ruling may put an end to some independent bingo halls as well as closing more Gala and Mecca bingo clubs.

A member of the independent bingo hall said that is it not better to have, “a thriving bingo club paying 15 percent than a struggling club paying 22 percent that’s planning to close.”

The latest job cuts come after the restructuring of the company last November, in which it changed its five operating divisions into three, with Gala stating that support functions would be handled “centrally rather than through the divisions”.

In a statement, Gala Coral’s chief executive Neil Goulden said: “Having reduced the number of divisions to three, evolution says now what about the HR structure and the finance structure”.

A further 100 jobs will be cut due to the closure of five more bingo halls in Port Glasgow, Leven, Hull St Stephens, Aldridge and Pitsea; these follow last week’s closure of the Gala Bingo hall in Crystal Palace.

Mr Goulden stated that the latest job cuts and bingo hall closures were a direct result of the government’s decision to raise gross profits tax on bingo from 15% to 22%.

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Land based bingo clubs currently pay around 15% VAT, but also have to pay a gross profit tax of 15% making a total of 30% tax; other gaming sectors only pay the 15% VAT and are not charged gross profit tax.

Since the smoking ban and cap on the amount of £500 jackpot machines, coupled with the popularity of online bingo, land based bingo halls have seen a steep decline in customers, and with the double taxation law they have to pay are sure to feel the effects during the recession.

More than 100 land based bingo halls have closed over the past six years, with a loss of over 3,500 jobs.

With the news of the losses, it is likely that Buckingham Bingo will break their loan repayment covenant and its directors have warned that: “the forecast covenant breach indicates a material uncertainty that may cast significant doubt upon the group’s and the company’s ability to continue as a going concern”.

Even if the loan agreement is broken, the directors reinforced that they have, “adequate resources to continue in operational existence for the foreseeable future”.

As with other bingo hall operators such as Gala and Mecca, Buckingham Bingo has suffered a downturn in customers since the smoking ban and the limit of £500 jackpot machines as well as increased duty and VAT taxation.

Bingo halls as well as pubs and clubs have had to adapt since the smoking ban was introduced in the summer of 2007, and Gala bingo hopes that its new hi-tech smoking shelter will attract new customers and prove popular with its existing players.

Assistant manager in the Fenton Gala Bingo Robert Jones said: “When you look at some bingo clubs and see people smoking outside, it does look quite unsociable. But with this smoking shelter it’s more social, they can have a drink, chat with their friends, and they can carry on playing”.

The smoking shelter, which is heated, has over 30 coin activated machines, with prizes ranging from £10 to over £1000. Customers at the bingo hall are said to be impressed by the new shelter and the outdoor games are already becoming a hit.