Recent budgets released by the UK government contained unwelcome surprises for online bingo players and bingo rooms. We are, of course, referring to the added taxation on bonuses given out by UK Bingo rooms.
Free Bingo Bonuses Tax
Online Bingo players are not directly taxed on either bingo activity or when cashing in a win. Bingo Rooms pay the bingo taxes, but these taxes directly impact what is offered to bingo players in terms of bonuses. Not only from a Sign-Up bonus perspective, indeed ongoing promotions are affected as well.
Free Bonuses include Bingo Sign-up Bonuses, weekly and monthly promotions, and free spins on slot games. This new bingo tax took effect as of August 2017.
It meant a radical shake-up in the world’s most competitive Online Bingo space. UK Bingo rooms, up until this watershed moment, engaged in many bingo bonus promotional activities to try to acquire and keep players.
This bonus activity extends to ongoing promotions to enable bingo rooms to keep players. However, the UK Government will argue that it is simply bringing this new bingo tax into line with other forms of taxation on gambling and betting.
Essentially, all bonuses awarded fall under the total stakes and stakes minus winnings make up the taxable portion of what a bingo site will pay. The more bonuses dished out, the higher the amount of taxes to be paid.
Why The Additional Bingo Tax
Sports Betting companies are charged a tax on free bets that players claim. However, the Government has identified an opportunity to tax bingo differently.
This new Bingo Tax will affect bingo players more as August 2017 draws nearer. Any UK Bingo room worth its salt is already planning for a massive reduction in bingo bonuses on all fronts.
That means bingo players will have fewer choices regarding generous bingo bonuses. It also means that we will see further mergers in online bingo.
Smaller boutique bingo rooms will merge with larger, more established rooms or close their doors. We predict this based on the evidence of the recent point of consumption tax. This places an increased 15% tax on all bingo rooms, taking play from UK Bingo players.
The new 5% bingo bonus tax is not as significant. However, it will significantly impact both the behaviours of bingo rooms and bingo players in the United Kingdom.
The Tables are Turned – From Land to Online Bingo
The wheel has turned full circle. Initially, it was land-based bingo that paid unreasonable tax amounts. We campaigned against these unfair taxes. Ironically, this tax was implemented by a Labour Government.
The game of the working class was taxed to the hilt by the party of the working class. It took a coalition government to undo these damaging bingo taxes. There has since been a revival in the land-based bingo market.
The current Government has adopted a stricter stance on online gambling operators. However, we do think that the Point of Consumption Tax is fair. It means that offshore gambling companies have to pay taxes on UK gambling.
However, this new UK Bingo tax is, in our opinion, a classic case of over taxation. Once again, the people’s game is used to make up for budgetary shortfalls.
It will also be interesting to see what this will mean for certain operators who have based their entire business on dishing out bingo bonuses to players. A large number of operators who used bingo bonuses extensively have changed the way they are now interacting with consumers.
In the comments below, let us know what you think about this new bingo tax. We love to hear from bingo players, and this tax will have significant implications for your gameplay in the future.
How UK Online Bingo Taxes Are Made Up
- Remote Gaming Duty – 21%
- Land Based Bingo pay Bingo Duty at 10%
- Statutory Gambling Levy – 0.1 to 1.1% of Annual Gross Gambling Yield (Online Bingo sites pay the higher rate)
- Land-based bingo clubs pay a lower Gambling Levy.