The Industry Suffers As Taxes Increase

11 March 2013 – By Cristian Dragomir

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The Treasury of the United Kingdom took the decision last month to add an additional 20% tax to slot machines. The bingo industry will be heavily affected as bingo halls are dependent on the income generated by installing slot machines in their establishments. Since 2005, due to rise of online casino gambling and the effects of the recession, there have been more than 150 bingo club closures. The remaining clubs that earn £70,000 or less in annual profits could shut down over the next three years if the government did not reduce the industry’s tax burden.

The Bingo Association, lobbying group whose members operate more than 200 bingo halls, is calling on the government to cut the industry’s gross profit tax rate arguing that bingo is taxed at a higher rate than any other form of gambling and it is an industry that employs 13,000 citizens. Members of the industry believe that the tax rate should more in line with online bingo and bookies at 15%., rather than the current 20%. According to the Bingo Association, bingo clubs are closing across the UK at a rate of 10 a year, as they become casualties of tighter spending and younger consumers going online to gamble. Smaller bingo clubs which are much more entrenched in the local community are becoming more and more vulnerable as the taxes rise. Analysts believe the pace of closures will quicken in the coming years, as clubs that have been battered by the downturn throw in the towel.

Bingo clubs on the British gambling market, that have sufficient capital to invest plan to introduce night club style lounge areas, live music and more coin-slot gambling machines in order to attract more young people. Despite the fact that no new bingo clubs have been built since 2009, important bingo club owners have spent millions of pounds on refurbishing some of their locations. The managers believe the whole industry would benefit from a lower tax rate, as this could lead to new investments in new establishments. The whole situation concerning bingo clubs is due to the fact the online gambling has become so popular in the past few years and land based facilities haven’t managed to keep up with the developments of the market.

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