More than one in three bingo clubs in the UK face closure as high taxes and weak consumer spending have seen revenues plummet, says a prominent trade association.
The Bingo Association, a lobbying group whose members operate more than 200 bingo halls, said that the 170 of the UK’s 476 clubs which make less than £70,000 in annual profits would shut over the next three years if the government did not reduce the industry’s tax burden.
The association is calling on the government to cut the industry’s 20 per cent gross profit tax rate, which stands in contrast to the 15 per cent tax rate levied on high street bookmakers.
“The current taxation regime is a disaster – when you consider that an average club employs around 30 people and probably needs to re-invest around £1m in capex in order to modernise and stay competitive then £70,000 [profit] is not much at all,” said Paul Tallboys, chief executive of the Bingo Association. “The ones in trouble tend to be smaller bingo clubs which are much more entrenched in the local community.”
The New Coronet Bingo Club is one such club. Located in Didcot, within sight of the town’s giant power station, the 30-year-old family-run hall has an uncertain future.
“Our existence is year to year at the moment,” said Paul Carpenter, the Coronet’s owner. “Up until last year we were facing closure, getting by on £15,000 profit a year and our savings.”
Bingo clubs are closing across the UK at a rate of 10 a year, according to the Bingo Association, as they become casualties of tighter spending and younger consumers going online to gamble. It says the pace of closures will quicken in the coming years as clubs that have been battered by the downturn throw in the towel.
According to Mr Carpenter over the last two years his customers’ average spend has declined from about £17 a session to £10, forcing him to halve ticket prices in an effort to boost footfall.
Mecca, owned by Rank, is one of the few bingo operators with sufficient capital to invest. Over the past three years it has spent £50m refurbishing some of its 97 clubs in order to shed the game’s fuddy-duddy image. In about 20 clubs it plans to introduce nightclub-style lounge areas, live music and more coin-slot gambling machines to attract more young people.
“We see life in the market,” said Mark Jones, Mecca’s managing director, adding that no new bingo clubs have been built since 2009.
“The whole industry would benefit from a lower tax rate … we haven’t been building new clubs and that’s one thing we’d like to do – the fact there is no new builds is worrying for the future of the industry,” he said.
The closures would particularly affect women who account for over two-thirds of bingo customers.
Mr Tallboys said: “Government talks about the Big Society and these clubs are one of the few places where single ladies can go on their own and chat – when they’re gone they aren’t replaced.”