A number of reports have been released recently trying to scare the public into believing that any action that the UK coalition government takes in relation to taxing online gambling would have significant negative consequences for online bingo players. The reality is that its not online bingo players that would suffer it would be the operators of online gambling sites. In fact UK bingo players would benefit greatly by the changes the coalition government is reportedly considering. In addition to the tax situation, UK bingo players would benefit from a move from what has to currently be a flawed form of regulation as well.

As everyone in the industry knows, online bingo operators are able to avoid paying UK bingo tax by being based offshore in any one of the countries on the ‘White List’. As such most online gambling operators pay around 1% in taxes compared to land based bingo operators in the UK which pay 20%.

Jesper Soegaard, the founder of BettingExpert.com, has suggested that bingo fans will end up with far less choice if the government cracks down on the industry as a means of boosting tax receipts and getting the UK out of debt.

Mr Soegaard said: "In the current economic climate, with the government desperately seeking to raise funds in every area available to them, it is unsurprising that an overhaul in gambling regulations is being discussed.

A regulation overhaul, however, would be "catastrophic", he claimed. He suggests that smaller operators would cease trading, leaving thousands of online bingo fans looking for a new place to play. He warns that the victims would be the hard-working fun –loving online bingo players.

We would agree that when the UK government gets around to reviewing the online gambling industry that there are likely to be a number of changes such as any operators looking to advertise or take deposits from UK players will have to

a) Adhere to the UK Gambling Commission

b) Pay UK Bingo duty

c) Ban the use of Credits Cards to make deposits for online gambling sites

We would also agree that these changes will MOST of the smaller online bingo sites disappear within a matter of months of the changes. In fact some industry insiders suggest more than 75% percent of online bingo sites would disappear in the first year. Given these statistics it is easy to reach the conclusion that with less supply of online bingo players are likely to see less competition amongst operators and hence bingo players get a worse deal. The problem is that this conclusion ignores some very important characteristics in the way in which online bingo operators currently operate.

Firstly online bingo operators don’t work in the same way as land based bingo sites. They do not reveal how many tickets have been purchased for the games and so it is impossible to work out on any particular game what percentage of the players money is being taken by the ‘house’. If you visit a bingo site, firstly they have charging sheets and secondly they have to display how many tickets have been sold for every single game and hence anyone can work out if and how much the ‘house’ takes from each and every game player. You might be wondered as such what difference this makes. Well it is simple online bingo operators take as much as they can. There is no formula or mark-up they simply take what they can get away with. They pay out what is attractive to get further players to take part. Therefore any increase in costs as a result of UK taxes is unlikely to have any real impact on what the player gets. On most sites they don’t get a great deal now and won’t get a great deal in the future. Operators will continue to pay out what they need to pay out in order to make the most amount of money.

With so many new online bingo sites popping up all the time operators have to work harder at the moment to attract and retain players and this increases the marketing and promotional budgets. If the majority of bingo sites were unable to continue trading then the market would be less competitive and the cost of player retention and acquisition would also fall.

Clearly like many other nations have problems with the public debt and the need to make cutbacks which are likely to be most felt by the majority of people in the UK. While online gambling companies dodge paying UK tax by being paid offshore this hurts us all. In addition it means that there is a cost in potential jobs that could have been created if the companies had been based in the UK. The money being spent on such sites is all being ‘drained’ out of the UK economy.

For the more vulnerable members of society are likely to see greater benefits from any changes. The level of problem gamblers associated with online gambling is significantly higher than UK land based gambling sites. Land based bingo clubs are not allowed to use credits cards and are required to carefully monitor the behaviour of players and take action where players show signs of problem gambling. The UK coalition government is considering the idea of banning the use of credit cards and no doubt increased regulation would also lead to obligations on operators to take problem gambling more seriously.

The last area in which UK online bingo players are likely to see benefits when it comes to expected changes from the UK government will be in the form of regulation. Currently operators are regulated in the country in which they are based. Given these countries are competing for the business of the gambling operators and the ways in which some operators are allowed to conduct their operations it appears that the standards are not that great.

To put it simply regardless of where operators are located if they wish to market to UK players it is expected that they will have to abide by the UK Gambling Commission rules. The benefits are that given there are no conflicting interests, the UK Gambling Commission, is able to carry out the role of a regulator and protect the members of the public. It dose not have to worry that its decisions and policies may not be popular with operators. It does not have to worry that if the operator is unhappy it might take its business to another country.

Over the last 18 months we have come across numerous issues and have been repeatedly disappointed that the lack of interest by the relevant regulators. These have included:

a) Misleading advertising in relation to bingo bonuses

b) Unfair terms and conditions relating to withdrawals

c) Unfair terms and conditions relating to wagering requirements

d) The selling of player data including usernames and passwords putting the public at significant risk

e) Restrictions on some bingo bonuses which mean deposits are pretty much worthless as soon as you accept a bonus

f) Bingo players accounts being terminated as they have had a big win, or used bonus offers that have been emailed to them

g) Operators suspending bingo accounts and withholding funds without good reason

It should be noted that not all operators act in such an irresponsible manner and there are many that adopt policies that could quite easily be adopted as an industry standard.

The conclusion is that the sooner the UK government revises the current legislation to regulate and tax the industry the better for everyone..... except of course the online bingo brands themselves, the economies of the countries on the 'White List' that have been attracting gambling companies with low tax and low regualtion.