Listen to this article:The chief executive of the Bingo Association, Nicole Garrett, has warned that bingo clubs could be forced to close if the government goes ahead with a proposed increase in Machine Games Duty.
Appearing on BBC Breakfast earlier in October, Garrett spoke from Mecca Bolton about the financial pressures facing the industry and the importance of gaming machine income to bingo clubs. She warned: “To be really clear, clubs will close.”
Her comments come just six months after the government abolished Bingo Duty, a move that was warmly welcomed by the industry. However, there are now concerns that a new tax increase could reverse much of the progress made since April.
Following Miles Baron’s decision to step down after 14 years in the role, Nicole Garrett was appointed the new Chief Executive Officer of the Bingo Association earlier this year.
Despite the abolition of Bingo Duty, many clubs are still struggling financially. Garrett told BBC Breakfast that “even after the bingo duty cut, 27% of bingo clubs are loss-making even today”.
The abolition of Bingo Duty in April was a major victory for the industry following years of campaigning. It removed the 10% tax previously charged on bingo profits, giving operators more money to invest in their venues.
The Bingo Association has previously reported that operators are investing more than £50 million in bingo clubs this year, which is more than twice the amount saved through the tax cut. However, with more than a quarter of clubs still operating at a loss, Garrett is concerned that increasing another tax could make the situation considerably worse.
During the interview, she thanked the government for abolishing Bingo Duty. Still, she argued that operators need time to invest the savings and improve the long-term financial position of their clubs. Garrett believes that there is a danger that higher taxes on gaming machines could take away some of the money that operators are now using to improve their venues and keep them open.
Machine Games Duty is charged on the income generated by certain types of gaming machines, such as the slot machines found in bingo clubs.
While bingo is the main attraction at these venues, gaming machines provide an important additional source of revenue. For some clubs, the money generated by machines can make the difference between operating profitably and making a loss.
Garrett explained that this additional income is one of the reasons why operators are able to keep their clubs financially viable while maintaining affordable bingo prices.
The Social Market Foundation has proposed doubling Machine Games Duty on Category B machines from 20% to 40%. According to the think tank, the change could raise around £450 million in additional tax, which could be used to help combat problem gambling.
However, the proposal would affect more than adult gaming centres, betting shops and casinos. Figures cited during the BBC report suggest that there are tens of thousands of gaming machines operating across more than 700 bingo venues, with stakes generally ranging from 21p to £5.
The Bingo Association’s concern is simply that a large increase in Machine Games Duty would make these machines less profitable and leave operators with less money to support their wider bingo operations.
During her BBC Breakfast appearance, Garrett made sure to point out that clubs provide an important social service, and they have become a social lifeline for people who might otherwise struggle to get out and meet others. While bingo is a form of gambling, many people mainly use it for the opportunity to spend time with friends and enjoy an evening out.
Garrett explained that many players visit their local club to meet friends, enjoy some entertainment and feel part of a group. For some, the club is one of the main places where they regularly socialise. She also pointed out that the gambling industry already pays a statutory levy towards gambling-related research, prevention and treatment, and that operators have responsibilities to encourage safer gambling.
Despite growing concern within the gambling industry that bingo clubs could be forced to close, the government has not confirmed that Machine Games Duty will increase.
When asked about the possibility of higher taxes, a government spokesperson said that decisions on taxation are for the Chancellor to announce at fiscal events, and would not comment on speculation or individual proposals.
The next opportunity for an announcement will be the Autumn Budget on 28 October, when operators will find out whether the government intends to make changes to Machine Games Duty, and the Bingo Association, together with operators such as Mecca Bingo and Buzz Bingo, will be eagerly waiting to hear the Chancellor’s decision.
We do not sell or share your information with anyone. You may unsubscribe at any time.
Latest
