The Gambling Industry Contributes £7 Billion to the UK Economy Annually – Will the Government Shoot Themselves in the Foot in Legislative Review?

Gambling Commission LogoWith the government quietly going about their review into the Gambling Act in the background, we’ve already seen how various different stakeholders in the industry have stuck their heads above the parapet.

The UK Gambling Commission, perhaps fearing that they are under the microscope as scrutiny into their workings mounts, have embarked on a raft of punishments to – cynical hat on – make themselves appear more relevant and authoritative.

In the past couple of weeks alone, they have fined Casumo a whopping £6 million, Intouch Games more than £3 million and collected approximately £1 million in fines from five land-based casino firms across the UK.

That is set against the backdrop of the fallout of the Football Index scandal. The ‘stock market for football’ has now fallen into administration, and this bizarre platform based on theoretical – rather than actual – money could see its users lose millions. How and why did the Commission let the concept become a licensed entity in the first place?

The regulator’s former chief executive, Neil McArthur, fell on his sword as the Football Index controversy broke, and all at the Commission will be hoping they have done enough to convince ministers that they are indeed fit for purpose.

And now the Betting and Gaming Council (BGC) has done their bit to gently persuade the government about the importance of the industry. The organisation, which represents more than 90% of brands operating on UK soil, commissioned a study by Ernst & Young into the benefits that the sector brings to the economy in a wide-ranging report.

The results were illuminating….

The £7 Billion Question

Under pressure from campaigners to act, the government is said to be considering a range of tougher regulatory measures to ensure the social spectre of problem gambling is addressed.

The report commissioned by the Betting & Gaming Council is designed to remind ministers of the importance of the industry in terms of the revenue it generates, and the timing of its publication would hint at the hope of some influence on their decision making.

And the results are certainly persuasive. There are many takeaway points from the study, but the most salient focus on the benefits to the wider UK economy – some £7.7 billion is pumped into governmental coffers each year by betting firms, with more than £4 billion in taxation alone.

The sector also directly employs some 61,000 people, with an estimated 58,000 more indirectly employed through the various supply chains that feed into the gambling industry.

At a time when young people are being disproportionately affected by redundancies and a shrinking of the jobs market, it’s perhaps noteworthy that betting shops, casinos and behind-the-scenes operations employed more than 12,000 people aged 24 and under, and that more than 30,000 industry employees are under the age of 35.

Many of these job roles are ‘entry level’ positions too, so the sector could provide future respite as the UK battles back from the Covid pandemic.

The gambling sector contributes heavily to horse racing too – a sport perhaps beloved more than any other by many ministers. Some £350 million in pumped into racing through a variety of betting sources, including levy payments, media rights and commercial partnerships.

Reflecting on the findings of the study, the chief executive of the BGC – Michael Dugher – said: “At a time of economic fears and huge pressures on public finances caused by the Covid-19 pandemic, the huge contribution betting and gaming makes to UK plc could not be more important.

“This latest, authoritative report by EY sets out in black and white the vital role they play in helping to fund the public services upon which we all rely.

“It is vital that the Government get those changes right and does nothing to put at risk the future jobs and tax take of a growing, world-leading British industry.”

Message Received?

Be under no illusions, the governmental review of the UK gambling industry will lead to a shake-up of the sector unlike anything seen in decades.

The Gambling Act 2005, the last of the major regulatory reforms, didn’t really get to grips with online betting – considered the most ‘dangerous’ avenue for problem gamblers in the modern market.

It is expected that ministers will publish a White Paper into gambling industry regulation later in 2021, and that an amended version of the Gambling Act will be implemented.

It is expected that affordability checks are going to be introduced – industry behemoth Entain has already revealed the details of their own model, and that could prove disastrous if punters are expected to prove their financial ‘worth’ prior to having a flutter.

It will be interesting to see what part the Commission plays in the future of the industry too….if any./p>