New gambling laws came into effect in the UK as of 1st October 2014, with many of those impacted in the betting and bookmaking sector. However the new regulations are also set to have a huge effect on the online and mobile bingo market too, with the anticipation of a great shrink in the market heading our way.
The new Gambling Licensing and Advertising Act states that any overseas companies advertising remote gambling services to players defined as a ‘UK person’ must hold a license issued by the UK Gambling Commission. Before this law, companies only had to hold a license within an EU country or a White List Territory in which the company was established.
The new Act was created in a bid to stop UK based operators like William Hill and Ladbrokes moving their operations offshore to avoid tax. In a similar vein, a new tax will be introduced as part of the Act in December, meaning operators will have to pay tax on a consumption basis, rather than on where they are based. This means companies operating outside the UK will have to pay tax (the proposed rate is 15%) based on the profits generated by their UK players. This is a massive improvement on the current 1% which Gibraltar based operators currently pay.
Obviously this has mixed benefits for the people of the UK. It means that whilst the government will have more in its spending pot as a result of the tax, hopefully improving services for the people, it does mean that the gambling landscape is bound to change dramatically.
A lot of operators – and in particular bingo brands – may look to withdraw from the market if the law adversely affects their finances. Microgaming has already pulled several brands from the UK in light of the law, and they certainly won’t be the last to go.
If more bingo brands go, it means less competition in the market. Whilst this is a good thing for the remaining bingo brands themselves as they can benefit from boosted player numbers, it’s not as good for players. With less choice in the market it means we are less likely to see competitive deals, unique games and offers and less need for the gaming to advance as quickly. We could see the bingo market stagnate and start becoming stale to players.
Of course those who do remain and do pay the Point of Consumption Tax, will have considerably less to spend on marketing, advertising and promotions. Although you might not mind so much about seeing less bingo adverts on telly, it also affects how much the brands can afford to give out in prizes or giveaways. Before long, you might have to kiss goodbye to those one-off tournaments offering luxury cars or holidays as prizes.
It’s not all doom and gloom though as one area we may see expanding is the social media aspect. Social bingo apps which are just for fun are not affected by the new laws as for the most part players are unable to win real cash. Therefore we might find ourselves with far more choice in this department. Could a Bingo Hollywood social app be just around the corner? Only time will tell!