Taxed to Death!

Posted on January 7th, 2009

Bingo in the UK is heavily taxed, in fact so heavily taxed that it is a wonder that any bingo operators in the UK are able to turn a profit. In addition to the gambling profits levy which amounts to 15% of gross profits the 17.5% VAT tax translates to a taxation rate of over 30%. A 30% taxation rate would make most people think twice before entering an industry so heavily taxed.

In the UK the bingo industry brings in billions a year and employs in excess of 20,000 people. Many experts think that this double taxation on bingo could cripple the industry eventually and result in the loss of significant revenue for the government.

This policy of double taxation combined with the recently imposed smoking ban has caused the demise of about 100 bingo halls resulting in significant job losses. In 2008 alone almost a dozen bingo halls have forever shuttered their doors as a result of excessive taxation and regulation. Hopefully the government will realize at some point that to tax an industry out of existence is less than prudent.

What is especially startling is the fact that bingo is the only form of gamins subject to this onerous taxation. In these dismal economic times one would think that the government would encourage one of the few sectors that is showing any signs of growth. Spain, which has a thriving bingo industry with annual revenues of over 3.9 billion Euros and employs 18,000 people, has a tax rate of between 20% & 29% which is less than the UK bingo industry has to contend with.

Excessive taxation and the national smoking ban have crippled the land based bingo industry in the UK. Players are switching to internet bingo in droves. The internet bingo industry has responded with several player friendly moves. Bingo websites are offering a variety of bingo bonuses. Many sites offer a free play option complete with free bingo bonuses and free bingo for cash. The marketing strategies have been highly successful and some sites report a 40% to 60% increase in players.

One expert has claimed that if the double taxation continues that over half of the bingo halls in the UK will close in the next 20 years resulting in a massive loss of revenue. Some bingo proprietors and players are fighting back setting up websites and signing petitions. Whether the government responds remains to be seen.