Internet Bingo Not Taxed-Yet!

A few years ago it seemed the UK government set out to destroy the land based bingo industry. First there was the passage of the national smoking ban which banned smoking in any enclosed place including bingo clubs. Since about 63% of all bingo players smoke the result was predictable; attendance at bingo games fell dramatically and many bingo clubs closed their doors and hundreds of employees found themselves without employment. To add to the industry’s woes the government added a VAT tax raising the tax rates for bingo clubs to 23% further crippling the already struggling industry. Like most businesses bingo halls pay corporation taxes and a 15% VAT tax. Bingo clubs were also saddled with an additional tax effectively raising the tax rate for bingo halls to 23%. Some bingo halls paid as much as 30% of their income in taxes.

Bingo is the only form of gambling taxed at higher rates and bingo club operators are not pleased. The government did reduce taxes last year, but not enough to make a difference. Prime Minister Darling finally removed some of the taxes by dropping the VAT tax on gambling. It has been estimated that this move will save the gambling industry about 50 million pounds a year. Like most governments around the world what the administration gives with one hand they take away with the other and to compensate for taking away the VAT tax on bingo the government added what some call a ‘yucky profits tax’ leaving the rate of taxation for bingo halls essentially the same.

Both of these policies have sent thousands of UK bingo players online. Internet bingo has proved a popular substitute for live land based bingo. In fact the online bingo industry has grown so fast that now over 250 online bingo providers are competing for players. For many players bingo has been a part of their lives since childhood and they are reluctant to do without their favorite game. Many new websites offer free bingo for real cash prizes and most pay sites offer free bingo as an incentive for new players to sign up. Online bingo operators are not subject to the high rates of taxation that their land based counterparts are and this enables them to provide players with a wide variety of perks and benefits. Many believe that it is only a matter of time before the government tries to tax online bingo. In the meantime players are having a great time playing bingo on the internet, tax free!

By Anthony Wayne
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