Tax Hike Could Spell Closure for Hundreds More Bingo Halls

A £9 million tax hike by the Chancellor of the Exchequer could spell closure for hundreds more Bingo Halls up and down the UK.

This will no doubt be worrying news for UK land based bingo playing fraternity.

Our land based bingo clubs have been in decline for some years now, although we have seen a few new clubs open up, a lot more clubs have closed down than new ones open. Online bingo and the smoking ban along with the current economic climate have all played their part in its demise.

In his ‘infinite wisdom’ the Chancellor George Osborne has chosen to add to our bingo hall’s woes by hitting the industry with a 20% slot machine duty, instead of trying to aid them in their plight to save more of our clubs from closure.

The really annoying thing is online bingo operators are taxed at a rate of 15% and this is for both products they offer (bingo and slots) and yet land based clubs are being taxed differently for their products!

It has been reported that bingo clubs have become increasing reliant upon gaming machines, as attendances keep on falling. Slot machines are a way for them to generate extra revenue to help make up the loss from bingo revenue due to lower player numbers now.

The number of people playing bingo in land based clubs has reportedly halved from 6 million back in 2006 to around 3 million today. Their revenue has also taken a battering from pulling in £250 million a year in 2006, to approximately £125 million now.

These figures pretty much speak for themselves and it does not take Einstein to work out why our much loved clubs are in such a decline.

Last month’s hike in tax to 20% on gaming machines is another blow and it could be the one that tips many more clubs over the edge to closure.

Miles Baron of the Bingo Association, which represents the owners of 400 of the UK’s 467 halls, said: “The level of tax is critical to the survival of many clubs.”

It is rather frustrating that all gaming products are not on the same tax rate. How can there be 20% tax rate for gaming machines, but online operators and bookies are only taxed at 15%? I truly believe there should only be one tax rate of 15% for all types of gaming, otherwise it is somewhat unfair really and unjustifiable?

In 2011 the European Court upheld a fiscal neutrality rule for Mecca Bingo in a VAT case they had been fighting for some time. They ruled that the UK breached European laws in treating certain bingo games differently from each other for VAT purposes, Europe’s highest court has said. VAT has to be applied equally to similar goods and services under EU rules on fiscal neutrality.

If this is the case for VAT, it should be the same for tax surely?

The new higher rate of duty on gaming machines has been predicted to pull in a further £9.2 million per year for the tax man.

Land based bingo operators currently employ around 13,000 people. The closure of more clubs will spell more jobs losses – how is this going to help our economy? You would have thought the government would do everything they could to prevent more high street premises going empty, but it appears not.