The well documented battle between the offline bingo industry and the Treasury regarding the duty paid by bingo companies looks set to be reignited, with industry wide support as one of the UK’s biggest gaming companies called for a radical overhaul of the tax system.
As we reported last year, the level of duty paid by offline bingo companies was set at 22%, a 7 point rise from the amount detailed in the 2008 budget and above the rate paid by many other forms of gambling including online bingo which has been set at 15%. After a summer of discontent and many high profile campaigns, the industry got a bit of a compromise, with the Treasury pledging to cut bingo tax to 20% in the Autumn of 2009.
But it seems that it is not enough for Mecca Bingo owner The Rank Group, who have called for a radical overhaul of the taxation system, recommending a flat 15% rate for all forms of gambling. Currently, there are seven different tax rules covering sports betting, bingo, casino games, card room games, amusement machines and football pools – who would have thought tax would be so confusing?!
The betting group’s chief executive, Ian Burke, said: “The gaming and betting activities of UK consumers are subject to a patchwork quilt of taxation without any apparent logic or relationship to social policy.”
And sure enough, we are pretty sure that offline bingo operators, who are still facing a continued squeeze in profits as the effects of the recession refuse to go away, would welcome a further drop in tax as they contemplate the prospect of an increasingly bitter 2010.
For online bingo, it could mean big news – as the move would signal a need to tax offshore operators (which include the majority of online bingo operators such as Foxy Bingo, Wink Bingo and Costa Bingo) to recoup some money lost from offline bingo and casinos, who are subject to the highest tax. Whether the Treasury move ahead on this is another matter – but no doubt online bingo bosses will be paying close attention to see if Rank gets what it wants.
