A series of unfortunate circumstances

For some months now we have seen data published that reflects a growing hotel gaming market and a contracting club gaming market. Other data suggests that the net position of the clubs overall is almost neutral. The harsh reality of the neutral club growth net position is that clubs with revenue growth are effectively taking market share from other clubs.

We have also been reporting observations of changing participation in gaming through our Inflection Point articles where Terry O’Halloran is analysed participation rates of various market segments. That insight shows an alarming decline in participation in the core club gaming market in the 50 to 69 year age group with an increasing reliance on the over 70 demographic. This is a reflection of ageing population not being supplemented with younger people participating in club gaming activities.

Coupled with these factors is a relatively difficult economic time for self-funded retirees and others relying on pensions. We have seen growth in the cost of living with little or no growth in household revenues such that discretionary spending is the first point at which spending is cut to meet the costs of day-to-day living. To put the icing on the cake we have also seen significant declines in house prices (which may have just begun to flatten out in major capital cities) which creates an impression of declining wealth.

The never-ending assault from various anti-gaming commentators continues and there is no doubt that recent unfortunate events which have seen regulator action around the provision of gaming services will have some impact on the industry whether it be through public perception or some new regulatory intervention into how gaming services are promoted or conducted.

When all these issues are considered it puts the future success of many clubs in question. The bottom line is that many clubs are struggling now to achieve profit and to maintain long-term viability and those clubs carrying large debt are having to significantly adjust their operations to ensure that their obligations to banks and covenants are met.

Given the circumstances outlined earlier is now time for active review of club operations and to for each club is as profitable as it can be, examining costs and efficiencies so that it can meet community expectations of a club but also meet the financial thresholds required for long-term viability. Now is the time to be exceptional not average.

Russell Corporate Advisory can assist in developing strategies and actions that will make your club the exception.

Call or email Greg Russell to for a no obligation discussion of your circumstances.

Office : 9957 6700 | Mobile: 0405 100 463 | Email: greg.russell@russellcorporate.com.au

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