A report claims that the online gambling industry, worth billions of pounds, has had “negative impacts” on the UK’s economy.
The report was commissioned by Campaign for Fairer Gaming, and produced by National Economic Research Associates. It claims that the growth of online gambling is “detrimental” to the British economy. Money from other sectors which generate significantly more economic activity has been diverted.
According to figures from the Gambling Commission, online gambling revenues have increased in Britain. They went up from £4.2bn (£4.2bn) in 2015-16 to £6.5bn (£6.5bn) in 2022-2023.
According to recent data, more than 24.5 billion online bets have been placed by the largest operators’ customers in the first quarter 2023-24. Over 9m online gambling sessions lasted more than an hour.
Derek Webb, the founder of the Campaign for Fairer Gambling said that the gambling review of the previous government “failed properly to consider the fiscal and economic impacts” of internet gambling.
According to the Nera report, online gambling has a high profit margin and is low cost for gambling operators. Few people work in this industry. The report says that other industries, where potential gamblers can spend their money (which it calls “discretionary alternative”) create more economic value.
The report says: “Other industries, where potential gamblers could spend their money in lieu of gambling, are more labour-intensive.” When customers choose these alternatives, they create more value for the economy in terms of jobs and wages.
The report states: “British customers spent on average £5.6bn per year between 2015-16 and the end of 2022-23.” The report estimates that this had the effect of reducing the economic activity by £1.3bn and wages by £2.6bn.
The report, according to senior figures in the gambling sector, acknowledged that online gambling produced more tax revenue than alternative pursuits. The report says that there is a danger that curbing online gambling could drive customers away from the regulated British market and towards unregulated offshore markets.
A Betting and Gaming Council spokesperson stated: “BGC Members support 110,000 jobs and contribute £4.2bn tax and generate £7.1bn for the wider economy. They also pour millions of dollars into sports such as horse racing, football and darts. Rugby league, snooker and rugby league are also supported by BGC members.”
The unregulated, unsafe online gambling market contributes nothing to sport, the economy or the Treasury, and offers no safer gambling protections.
Will Prochaska of the Coalition Against Gambling Ads said that the Nera report had “blown a hole” into the claims made by the online gambling industry about how it boosted the economy. He said that the Nera report did not include the “enormous costs” of problem gambling to the economy. We should tax gambling like cigarettes. The Social Market Foundation is a think tank that crosses party lines and will publish a report about gambling tax reform before the autumn budget.
Dr Aveek Bhattacharya is the research director of the Social Market Foundation. He said that the gambling industry had been undertaxed for too long. They took advantage of VAT exemptions, offshore corporation tax avoidance, and duty rates too low to reflect social and economic costs associated with problem gambling.
The government is looking for ways to increase revenue and reduce harm. There are strong arguments for a higher remote gambling tax in the Autumn Budget.
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