Magazine article Marketing

News Analysis: Bingo Faces Core Problem

Magazine article Marketing

News Analysis: Bingo Faces Core Problem

Article excerpt

The game must widen its reach to offset an inevitable fall in players after the public smoking ban.

Giving up smoking will no doubt top the New Year's resolution lists of more people than ever this January, thanks to the impending ban on lighting up in enclosed public spaces in England and Wales.

Pubs and clubs are busily planning for the change in the law, which has been active in Scotland since last March, with many preparing to add outside areas to cater to smokers.

Some leisure industries will be hit harder than others, and bingo in particular could be faced with a major slump in trade. Since the legislation came into force in Scotland, operators there have seen turnover drop by between 14% and 27% and seven venues have closed.

Bingo Association marketing and communications director Steve Baldwin believes the prospects for England and Wales are even bleaker. 'Most of the bigger operators have many more clubs in England and Wales, and the impact in Scotland is expected to be amplified with more closures and job losses when the ban extends this year,' he says.

Rank, which operates the Mecca chain of bingo halls, reported in a trading statement last month that business had been stunted by the performance of its Scottish clubs. Since the introduction of the smoking ban there, year-on-year revenue has declined by 15%, with admissions down 6% and spend per head down 9%. 'Nobody had predicted that the effect of the smoking ban would bite so far, so deep, so fast,' says Baldwin.

Underlying causes

The reasons that bingo has been hit so much harder than other sectors, such as bars and restaurants, are fairly simple. 'In other environments, pubs for example, you can buy your drink at the bar and take it outside to consume. You have purchased your drink in a licensed premises, but you don't have to consume it there,' explains Baldwin. 'Due to the way the bingo industry operates and is legislated, you have to be inside the building to play.'

In Scotland, smokers are now turning up later at bingo halls and leaving earlier. Moreover, while they are at the clubs, they are going outside the premises between games to have a cigarette, rather than spending money on secondary services such as slot machines, table-top bingo or drinks from the bar.

Bingo revenues are also suffering at the hands of the current tax regime. 'It remains the most heavily taxed gambling activity in the UK,' says Baldwin. 'We have to pay VAT on what is called a participation fee, which neither casinos nor turf accountants have to. There is a need for some fiscal relief and that could easily be served up by removing VAT.'

Bingo clubs in Scotland have begun a campaign for a pounds 10m tax rebate from the government to compensate for the loss in revenue caused by the smoking ban. They are preparing to request pounds 100m in relief from Chancellor Gordon Brown when the other UK bans take effect.

'The changes being brought in are not the result of a change in consumer behaviour as a result of natural market forces; they are the result of legislative intervention,' Baldwin points out.

The Bingo Association supports the need for a ban on smoking in public as a way to address the nation's health. …

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