THE rising cost of running its bingo halls prevented entertainment group Rank's interim profits rising above the level of last year.

The company, which owns casinos and the Hard Rock Cafe chain, blamed increases in the minimum wage and higher energy costs for reducing operating profits at Mecca bingo by six per cent.

Although fewer customers visited its bingo halls during the six months to June 30, those that played were spending more than this time last year.

Weak margins in sports betting at Blue Square also contributed to the fall in underlying pre-tax profits to £71m from £72.4m a year ago.

The company owns 36 Grosvenor casinos, more than 120 Mecca bingo halls and more than 100 Hard Rock Cafes in 38 countries.

The disappointing results in bingo and sports betting offset a 40 per cent rise in profits at Hard Rock to £16.4m as customers spent more on food and drink at company-owned cafes.

Chief executive Mike Smith said its Deluxe film unit performed strongly, but the overall pattern of trading since the end of June had been similar to that exhibited in the first half.

He said: "The immediate outlook is for little change, with further improvement in Deluxe Film and Hard Rock offset by subdued performance in the current UK gaming market."

The relaxation of gaming laws to allow more slot machines in casinos and a doubling of prize money from October was a positive move, but Mr Smith said it was "unlikely to be material" this year.