UK Online Gambling Group Shares Drop

The share price of leading United Kingdom-based bingo gambling firm, The Rank Group PLC, dropped by 12.2 percent recently, after an unexpected and unwelcome announcement by the UK government that it will shortly be introducing a 'bingo and casino' duty as part of its 2009 budget.

The government's announcement has had a direct impact on the large London Stock Exchange-listed firm, as bingo is The Rank Group's core business. Instead of its current 15 percent in taxes, the company will now have to pay 22 percent in taxes, although it seems to be taking the increase in its stride.

Said a Rank Group spokesperson, 'After accounting for these additional costs, Rank anticipates that it will continue to operate within its banking covenants.' However, there is little doubt that new duty has come as a blow for bingo gaming companies, especially after the government's first announcement.

Before it issued a statement on the introduction of the new duty, the UK government announced that it is going to abolish VAT (Value Added Tax) for all bingo operators. These was extremely good news for the UK bingo industry, as it has been campaigning for some time for the government to address the VAT issue.

Like many other bingo gaming companies across the country, The Rank Group was one of the biggest supporters and petitioners of reducing tax on bingo. Citing that unlike many other forms of gambling in the United Kingdom, bingo operators, and ultimately bingo fans, were being treated unfairly and with prejudice.

While other gambling operators in the United Kingdom have only been required to pay a gaming duty, the country's bingo operators have up until now been required by law to pay both a gaming duty as well as VAT on top. However, the champagne popping ended soon enough following the second announcement.

Although the government seemed to have received the message loud and clear, and did away with VAT, it seems to have cannily countered with the bingo and casino duty that will no doubt create discontentment across the gambling board in the UK, and not just amongst bingo-focused gambling companies.