The dust might have had time to settle on Tuesday’s Budget, but the bingo industry is likely to be ruing the changes made to the tax regime for a long time to come. Most notable is Machine Games Duty (MGD) which will be hitting operators in their most profitable area of business, a further tax burden to an industry already taxed way more than other gambling businesses, which will offset any gains made from double taxation relief that’s also on the way. The Bingo Association says that this of the new changes:
“This new duty will help ensure that bingo’s potential for growth is substantially reduced, with some smaller independent operators seeing potential growth translated to contraction.”
The changes laid out by Chancellor George ‘Artful Dodger‘ Osbourne will see the UK’s bingo club’s prime source of revenues taxed at 20% from the 1st of February 2013. It’s come as a blow to the industry given the importance of the interval earnings from the slot machines. After a hard slog to get the number of £500 jackpot machines upgraded in the clubs a few years back.
The effects on smaller clubs could be huge, causing more to close as their incomes go off to HMRC. Whilst that’s good business for our Lost Halls section, for the UK’s retail industry it’s the latest in a long line of sleights from the UK Government. Given our current Tory governments ongoing assault on any thing enjoyed by the working classes en-masse, it’s probably not surprising this has been put in place to further rifle the pockets of Britain’s hard working bingo industry.
There are also big changes for the taxation of the online game coming, but that industry has more time to plan for changes as they will not be coming into effect until December 2014. There’s a major shift that will effect all overseas bingo operators, in that a tax of 15% will be applied at the location of consumption, rather than at the location of supply like it currently is. This will also have a big impact on online operators who target Britain. It will also effect bingo affiliates like myself, as profits will no doubt drop as operators take the tax from the profits they award commission on.
These changes are hopefully the start of a wider ranging online gaming legislation change which will bring online bingo into full UK licensing and regulation. I’ve banged on about this before, it’s what the industry need to stop the shady overseas licensed sites taking the Michael out of UK bingo players (yes, I’m looking at you Cozy and Cassava). The new tax should also help problem gamblers, as profits will finally pay tax into the UK economy where it can be used to fund more help for problem gamblers rather than just lining the pockets of the operators stake holders with scant regard for those with gambling issues.
Whilst putting this post together, I was pleased to drop into the Bingo Association’s site for the first time in a good while and amazed to see they’ve finally done something to improve their frankly dire web site. There’s a new look and a vastly superior layout to the new site, as well as other bells and whistles like RSS and social sharing buttons (welcome to 2006, Bingo Association!) Now, if you guys could just resurrect the most excellent Bingo Link magazine we’d be most appreciative and forgive the last 4 years of user unfriendliness.