Bingo facing 'final nail in coffin'

Changes in taxation have had a negative effect on the gambling industry, an MP said yesterday. Skip related content

During an adjournment debate Philip Davies (Con, Shipley) told the House that a number of recent government decisions had hit the bingo industry, such as the smoking ban and various duties on gaming machines.

"In that context the latest Budget, which removed VAT and increased the gross profits tax on bingo from 15 to 22 per cent., is the final nail in their coffin," he said.

He pointed out that Treasury predictions that changes in the Budget would benefit the bingo industry by £15 million were contradicted by the Ernst and Young report commissioned by the Bingo Association.

Davies illustrated the effects of increased taxation on the gambling industry by drawing attention to decisions of betting agencies such as Ladbrokes and William Hill to shift operations offshore.

"For every £100 profit they make online, they will pay £1 or £2 in tax offshore, whereas they would pay £36 in the UK in a combination of GPT, VAT, corporation tax and horse racing levy," he said.

Exchequer secretary Sarah McCarthy-Fry responded.

She said that inaccuracies revealed by the Ernst and Young report were being analysed and despite this there was evidence that bingo industry had benefited from recent regulatory changes.

"Since February this year, bingo clubs have been able to offer up to eight category B3 gaming machines for playan increase from four," she said.

"Those changes could provide a boost to takings from gaming machines in bingo clubs."

On the movement of betting operations offshore she said it would be "self-defeating to engage in a race to the bottom in tax rates with low-tax jurisdictions. We believe that the UK continues to offer one of the most competitive business tax regimes of any major economy."

McCarthy-Fry said a review of remote gambling legislation in the UK will be published before the end of the year.