Bingo Halls Pressured by New Slots Tax

For years the land based bingo industry has been pressured by high tax rates, a declining player pool, the ongoing recession and competition from online bingo and casinos. In the UK bingo is taxed at a higher rate than any other form of gambling. The bingo industry has complained to members of Parliament for years but there has been no response and tax rates are still high. In addition to high taxes bingo halls face increased licensing fees from local governments. In many cases licensing rates have triples and even quadrupled.

The imposition of a new tax on slot machines, commonly referred to as ‘fruit machines,’ may force 200 British bingo halls to close. The new tax on slots will generate about £9.2 million annually for the government. Last month Chancellor of the Exchequer George Osborne imposed a 20% tax on the popular machines. For smaller bingo operators the 20% rate will be a real burden. UK bingo operators say that 70% to 80% of their profits are generated by fruit machines and many halls are dependent of slot revenues for survival.

In January arcade operators, pubs, bingo halls and betting shops with slot machines were threatened with fines if they did not register for the new Machine Games Duty. The new tax levy could cost the gaming industry over £40 million a year.  Estimates say that about 40% of UK gaming operators failed to register by the January 11th deadline. The old Amusement Machine Licence Duty has been replaced by the Machine Games Duty which is a tax of 20% on all gaming machine revenues. Ladbrokes, a major UK gaming operator, said the new tax will cost the company £12 million a year and predicted that the new tax will cost the gaming industry £200 million over the next five years.

Miles Baron of the Bingo Association stated “The level of tax is critical to the survival of many clubs.” The Bingo Association is an industry group that represents 400 of the 467 bingo operators in the UK. In an appeal to Chancellor Osborne industry leaders said that the bingo industry, which employs 13,000 people, pays the highest tax rates of any type of gambling. The new tax is especially vexing to some operators since the government recently announced tax cuts for the internet bingo and gaming industry. The tax cuts are designed to lure offshore gaming operators back to the UK.

Industry representatives say that bingo tax rates should be “harmonised” at 15% which is the tax paid by internet bingo and bookies. Mr. Baron stated “This would have a positive impact on bingo, for customers, operators and the Exchequer.”