Rank Group PLC (LSE:RNK) shares fell 7.6% after it warned that its Spanish businesses have been the victim of a €7.1 million (£6.2m) payment fraud, which is being investigated by local police.
The FTSE 250 group operates under two brands in Spain: online gaming and betting sites under the Yo banner, and the nine Enracha venues offering bingo, electronic casino and slot games.
Rank said it reported the matter to law enforcement agencies and is supporting their investigations, as well as using an external law firm to help with an internal investigation.
"Given the exceptional nature of this incident, Rank Group expects to treat the financial impact as a separately disclosed item in relation to its 2025/26 performance," the company said in a statement, meaning it will not change the adjusted PBT measure followed by analysts.
It will be a further blow to the bottom line for the group, which owns Grosvenor casinos and Gala bingo halls in the UK, after Rachel Reeves's recent budget imposed a new digital gaming duty.
A £46 million increase in digital gaming duty is expected to be partially offset by the abolition of bingo duty, resulting in an annualised reduction of circa £40 million on operating profit.
A 4.1% increase to the hourly minimum wage is also anticipated to represent an additional cost impact of roughly £5.5 million.
Rank shares hit a three-year high above 166p in the summer, before falling back to around 105p following the Budget, and down to 97.6p this morning, the lowest since May.
House broker Shore Capital said it would be lowering its net cash estimate by £6 million to circa £44 million to reflect the payments from the fraud, "which at this stage we do not expect to be recovered, with the reduction equivalent to circa 1.5p per share".
** UPDATE: Adds share price details **