A wave of bingo halls have closed since the Covid crisis – and an industry chief claims a tax rise will kill off many more, after reports the Chancellor could double taxes on bettering firms to 30%
Most bingo halls could be forced to close if the industry is hit with a Budget tax hike, Chancellor Rachel Reeves has been warned.
Bingo club operators fear they will be caught up in a crackdown on the wider gambling sector. It comes amid speculation that Ms Reeves could double taxes on betting firms to 30%, and ramp-up duty on slot and gaming machines from 20% to as high as 50%.
Miles Baron, chief executive of The Bingo Association, says slot machines help subsidise the main bingo game in clubs. He told the Mirror: “Anything above where we are will hurt badly and close bingo halls. We have a figure, which is not much higher than it is now, and they will all go down. There is a very serious chance that, ironically, a Labour government which has the interest of working people at their heart can deny working people one of the things they like to do most.”
It comes amid tough trading for bingo halls in the face of rising costs and competition. The number of bingo halls has already dropped from 335 pre-Covid to 247 now. When the smoking ban was introduced in 2007, there were roughly 635.
According to The Bingo Association, all the clubs in the country collectively make around £35million in profit a year. It also says that a quarter of its profits were wiped out by last year’s Autumn Budget and the increase in employers’ national insurance and the minimum wage. The sector employs around 7,000 people, mostly in halls and clubs.
The warning comes after gambling giant Betfred threatened that all 1,300 of its high street shops could close if an industry tax hike went ahead. Fred Done, who set up Betfred with his brother in 1967, said all its 1,287 shops and 7,500 jobs would be put at risk. He said the proposed tax rises were the “biggest threat” to the industry in his 57 years. Mr Done said: “If it went up to anywhere like 40% or even 35% there is no profit in the business. We would have to close it down.”
In the summer, former Labour PM Gordon Brown urged Ms Reeves to target the “massively undertaxed profits”. He said an increased levy could raise £3.2billion to to lift 500,000 children out of poverty.
Mr Baron said of his industry. “We don’t have a lot of profit or cash to give”, adding that the sector pays a 10% bingo duty on profits, which come to around £22million. The feeling is that this duty is less likely to be touched in the Budget. He said the bingo industry as a whole paid around £150million in taxes last year.
But he added: “Bingo clubs have always had gaming machines, and an element of their profit comes from these machines. It is a bit like when you go to a cinema to watch a film, you still may get popcorn and a can of Coke, and those discretionary spends are vital to the profitability of the cinema. In the same way, the discretionary spend on a slot machine in a bingo club is really important.”
The warning will pile yet more pressure on the Chancellor in the weeks leading up to the Budget on November 26. Ms Reeves and the Treasury are looking for ways to fill a blackhole in the public finances, that could run to tens of billions of pounds. But doing so through more tax rises and spending cuts risk damaging Labour’s already dented reputation.