Bingo chief calls for scrapping of VAT
Bingo chief calls for scrapping of VAT
By Lucy Warwick-Ching
November 22 2007 02:00
Bingo profits have gone up in smoke following the cigarette ban and Simon Hannah, chief executive of Riva Gaming, is warning that 100 bingo clubs could close within six months.
The industry - 600 clubs across the UK - is under heavy pressure and last month Rank warned on profits as customers stayed away because of the smoking ban. Top Ten Holdings produced more bad news for the industry yesterday and it is clear that Riva Gaming will also be hit.
"Against the background of the smoking ban, the reclassification of slot machines and the ever- increasing licensing costs imposed by the authorities, bingo also suffers from double taxation," said Mr Hannah.
"Where betting shops and casinos pay only 15 per cent gross profit tax, we must also pay 17.5 per cent VAT on our bingo income, putting us at a significant commercial disadvantage", he added.
Mr Hannah, alongside the rest of the bingo industry, wants VAT on bingo profits to be scrapped.
The Bingo Association is meeting this week with the government to discuss the possibilities for a restructuring of the tax.
"We would like a level playing field so we can compete with the bookmakers. Bingo is the only gaming sector to pay VAT as well as gross profit tax," said Mr Hannah.
In the 1960s, when bingo was at its most popular, there was more than 1,500 clubs. In 2006, that number was about 650. Since then 50 have closed with another 100 in jeopardy. "This is currently not an attractive space in which to operate," says Mark Brumby, analyst at Blue Oar Securities.
"However, the government - arguably - does not want the whole of the bingo industry to shut down - and it just might. Bingo provides the only social interaction for some elements of society and a legislative climb-down is not out of the question".
FT.com
By Lucy Warwick-Ching
November 22 2007 02:00
Bingo profits have gone up in smoke following the cigarette ban and Simon Hannah, chief executive of Riva Gaming, is warning that 100 bingo clubs could close within six months.
The industry - 600 clubs across the UK - is under heavy pressure and last month Rank warned on profits as customers stayed away because of the smoking ban. Top Ten Holdings produced more bad news for the industry yesterday and it is clear that Riva Gaming will also be hit.
"Against the background of the smoking ban, the reclassification of slot machines and the ever- increasing licensing costs imposed by the authorities, bingo also suffers from double taxation," said Mr Hannah.
"Where betting shops and casinos pay only 15 per cent gross profit tax, we must also pay 17.5 per cent VAT on our bingo income, putting us at a significant commercial disadvantage", he added.
Mr Hannah, alongside the rest of the bingo industry, wants VAT on bingo profits to be scrapped.
The Bingo Association is meeting this week with the government to discuss the possibilities for a restructuring of the tax.
"We would like a level playing field so we can compete with the bookmakers. Bingo is the only gaming sector to pay VAT as well as gross profit tax," said Mr Hannah.
In the 1960s, when bingo was at its most popular, there was more than 1,500 clubs. In 2006, that number was about 650. Since then 50 have closed with another 100 in jeopardy. "This is currently not an attractive space in which to operate," says Mark Brumby, analyst at Blue Oar Securities.
"However, the government - arguably - does not want the whole of the bingo industry to shut down - and it just might. Bingo provides the only social interaction for some elements of society and a legislative climb-down is not out of the question".
FT.com
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