UK Bingo Industry Gets Major Tax Cut

Since 2006 the bingo industry in the United Kingdom has been plagued by many misfortunes. First came the national smoking ban that resulted in many bingo halls losing over half of their regular players and many were forced to close. Even worse the government imposed higher taxes on bingo than any other form of gambling. As if that wasn’t bad enough Parliament gave local governments the right to raise license fees for land based bingo halls. In many cased license fees went from hundreds of pounds to thousands overnight putting extreme pressure on many bingo clubs. Many MP’s spoke out against the high tax rated but the government remained unwilling to lower taxes on bingo halls. This year many industry observers reported an increase in the number of players at commercial bingo halls such as Mecca and Gala.

Recently bingo halls received a very rare piece of good news from the government in the UK. The Treasury told bingo operators that they will receive a tax cut worth £10 million pounds annually. The move was welcomed by the land based and online bingo industries. An earlier tax cut in 2009 reduced the bingo tax from 22% to 20%, not very much but just enough to enable several bingo halls to continue operations. Other forms of gambling pay a 15% tax on profits. The tax rate for bingo halls is now the same as tax rates for the national lottery. An unnamed industry insider stated “The industry was going through a bad phase with over 150 bingo clubs already shut down and an equal number on the verge of closing down- this move by the govt. should be able to restore the situation to an extent.”

While the land based bingo industry suffered from the effects of the smoking ban and high taxation the internet bingo industry has grown and expanded into new markets overseas. When the smoking ban was imposed surveys showed that approximately 63% of all bingo players were smokers. A significant percentage said that they would consider switching to internet bingo if they could no longer smoke at local bingo clubs.

The new action by the treasury changes the way bingo hall taxes are calculated. In the past the treasury made no allowance for the VAT tax and bingo halls paid taxes on all gross profits. Under the new taxation scheme gross profits taxes will be calculated after the VAT tax has been deducted. The move is expected to save the bingo industry millions annually.