The government has again rejected calls from the bingo industry to scrap double taxation on the sector, claiming that the recent troubles experienced by gaming operators are not tax-related.

The latest set back for the campaign, lead by the bingo Association, came as the government responded to a petition – calling for VAT to be scrapped – which was delivered to 10 Downing Street last month.

In a statement, the government said it had “given serious consideration” to the issues raised by the bingo industry, but that it had concluded that “tax is not at the root of the bingo industry’s problems.”

According to the Bingo Association, the news was disappointing but not unexpected.

Paul Talboys, chief executive of the Bingo Association, told Leisure Opportunities: “What we heard from Number10 is much the same that we have heard from the Treasury in the past.

“Bingo is the only gambling product that is subject to double taxation – operators have to fork out for Gross Profit Tax as well as VAT.

“The government refuses to take into account the indirect benefits that scrapping VAT would deliver – the decrease in the amount of bingos forcing to close their doors and therefore the continuation of Gross Profit Tax.”

The treasury’s stance somewhat contradicts the view of the DCMS, which according to Talboys has been much more “sympathetic” towards the concerns voiced by the sector.

“The fight will go on and we are particularly grateful to Gerry Sutcliffe, who is due to deliver a ministerial speech on the subject at the Commons anytime soon,” he said.

“The Treasury made the wrong decision by keeping double taxation in place in its latest budget but this set back is not going to deter us – in fact we are preparing to step up our campaign to get the tax regime changed."

A recent survey into the Bingo industry from the Henley Centre concluded that the sector had been dramatically affected by the impact of the smoking ban – but that the removal of VAT would go “some way to safeguarding a large number of the clubs.”

The report revealed that the industry has been losing clubs at a steady rate with an estimated 81 bingos closing between 2004 and 2007.