VAT Rise Deals Blow to Bingo Halls
When the not unexpected rise in VAT was announced by Chancellor George Osborne in late 2010 and implemented in the New Year, the predicted effect was that the resultant price rise on many goods would impact severely on how consumers spent their cash. Experts predicted that non-essential items, leisure pursuits and ‘nights out’ would be hit hardest and the news that bingo halls in the UK have reported worrying results through the first couple months of 2011 is therefore unsurprising.
The rise in VAT has struck hard at bingo halls in two ways. Firstly, the rise has meant the cost of playing the game has had to rise; major bingo hall operators in the UK do not have sufficient profits from their operations to absorb the 2.5 per cent rise in VAT and therefore, this cost must be passed on to customers in the form of higher game prices. The double whammy is that the cost of all sundry items on sale at bingo halls, such as alcohol and soft drinks, has also been affected by the VAT rise.
It has been a tough few years for the traditional UK bingo hall. Firstly, the smoking ban caused problems for many clubs, whose patrons used to enjoy a smoke while they played and chatted to friends. The new regulations meant that smoking in a confined space became illegal and this had a drastic effect on attendances. The new VAT increase has just exacerbated this problem further still and it is little wonder that many bingo hall owners feel that these new rules and increases are putting them at a distinct disadvantage to other emerging bingo businesses.
Since the smoking ban was introduced in July 2007, revenue from slot machines at bingo halls has fallen by a third; 152 bingo halls across the UK have closed in the last five years (526 as of 2010, compared to 678 in 2007). The number of bingo players has fallen by 50 per cent, from five million to a mere 2.5 million in 2010, while profits also fell by 50 per cent over the same period, so stated accounting firm Ernst and Young.
To paint a picture of bingo in the UK being in terminal decline, however, is a mistake. In contrast to bricks and mortar bingo halls, online bingo has been enjoying a massive surge in popularity and many of the companies that made their money in bingo halls are now finding far greater profitability in the fast-growing online market.
It is not difficult to understand why, of all the different ways the British public can enjoy bingo games in the UK, online bingo seems set to be the first choice for many.
The first and most obvious positive is convenience. Online bingo is available to customers 24 hours a day, seven days a week and all they need to play is an Internet connection. This means people can play bingo at the time that suits them, not the time that the bingo hall is open and that people can tailor their leisure pursuits to their lifestyle far more. Shift workers, for example, who may work evenings, can now enjoy bingo either late at night or first thing in the morning, therefore not missing out.
Another key benefit is cost. Online bingo is a cheaper option. Many providers offer free bingo to customers and there are scaled fees for games, which mean that bingo players can find a game that has the value they can afford. Many companies now offer no deposit bingo so customers can try their games before they have spent any of their money. In addition to games being cheaper and more accessible, there are also far fewer overheads to playing the game online. Players do not have to buy drinks from the bar or pay for transport to and from the venue, or perhaps pay for something to eat on their night out. This means that it offers a huge saving on the traditional cost of a night out and in current times, this is a huge plus for many bingo players.
The UK bingo scene is far from dead, merely that a number of circumstances have dictated that bingo players are changing their gaming habits. While this may not be great news for bingo hall operators, the fact that online bingo is still a hugely popular and growing market is solace to many who can now move into this area safe in the knowledge that the UK’s thirst for bingo is still far from being quenched!
by admin on March 30th, 2011 Posted in Bingo | No Comments »