Currency Exchange Rates and Internet Bingo

Posted on June 18th, 2010

In spite of the ongoing global recession the internet bingo industry continues to grow and expand into new markets.  The internet bingo industry has had great success in new markets such as Spain and the Scandinavian countries. In Europe most internet bingo websites abide by the rules set by the European Union regarding internet gaming and consumers are protected. A new issue has arisen that may affect UK internet bingo sites-currency exchange rates.   Before the elections many investors feared that the election results could result in political gridlock in the UK crippling the nation’s ability to deal with economic issues. Because of election jitters the pound fell below the $1.50 (USD) support level.  The pound had held above this critical level for almost a year. Many currency experts are predicting further declines for the pound if the new government does not act swiftly to address various issues affecting the UK economy.

Currency exchange rates are not an issue most internet bingo players think about but exchange rates can have a drastic effect on the bingo industry. Many exporters will benefit from the pound’s decline which will make their products cheaper in international markets but many new internet bingo sites may suffer losses due to the pound’s losses.  A large amount of capital is required to launch a new internet bingo site and a lot of this same capital was raised in Euro and Dollar denominations. A declining pound will easily affect these sites’s bottom line since most internet bingo players are located in the UK which is the world’s largest internet bingo market.

Recently the pound traded as low as $1.4781 and several currency analysts have indicated that the pound will suffer further losses due to political uncertainty in the UK. This could be a disaster for some of the newer bingo websites. A weaker pound could force newer sites to cut back on marketing expenses leading to a loss of potential players. In the UK marketing is an extremely important part of the internet bingo industry. Some of the newer sites could be forced to cut back on jackpots and prizes driving their players to older more established sites. Newer sites could also be forced to cut back on bingo bonuses and player perks making them less attractive to new players looking for a site to play at. It goes without saying that many site owners are following currency exchange rates closely!