SMF report claims stricter gambling regulation may add more value to economy
Published this week, the study looks at the economic impact of gambling in the UK, picking out a number of key findings to demonstrate the state of the sector including the potential impact of regulatory change.
These include that gambling’s GVA – the value of goods and services produced, minus the value of intermediate consumption – grew at a much faster rate than the UK economy. Gambling GVA climbed 45% since 2010, compared to 18% for the UK economy, with gambling accounting for 0.4% of UK economic output.
The SMF also said the gambling sector paid £4.3bn in taxes during 2019, which amounted to 0.6% of central government revenue in the UK.
Other findings include that growth in the gambling sector over the past decade coincided with a rise of online gambling, with this area now accounting for 12% of industry yield, compared to just 12% in 2010.
Some 85,000 people were employed in gambling in 2019, accounting for 0.3% of all employment in Great Britain, but this was down from 93,000 in 2010 due to the shift to online gambling, the SMF said.
The SMF also addressed the potential for a lower rate of gambling spend, giving the example that this could decline by 10% as a result of regulatory reforms to curb problem gambling, with consumers spending money in retail instead.
If this were to be the case, overall GVA would be £11m higher, while the number of jobs elsewhere in the economy could increase by 24,000 and a £171m rise in tax revenue for the government.
Concluding its findings, the SMF said while gambling supports tens of thousands of jobs across the UK and contributes £8.1bn to economic output directly each year, it is “very unlikely” this economic contribution is truly additional to what would have taken place if gambling did not exist.
“Indeed, with most other parts of the economy having more extensive supply chains, and thus higher economic multipliers, reductions in gambling expenditure through reduced rates of problem gambling would almost certainly be a net economic benefit as households instead spend money elsewhere,” the SMF said.
“The Exchequer would gain too, as higher GVA and jobs in turn drive up tax receipts.”
As such, the SMF said this has “strong implications” for regulatory reform, saying that if done correctly, there would be scope to both reduce the societal costs of problem gambling and realise economic gains.
The SMF said to ensure that future gambling regulation is based on accurate, timely and detailed evidence, the government should commission an urgent review of the social and economic costs of gambling. This would run alongside the already-confirmed Gambling Act Review.
“No final decisions on legislative review should be made until the Treasury has conducted an assessment of the economic and social costs of each policy change,” the SMF.
However, Betting and Gaming Council chief executive Michael Dugher criticised some of the suggestions in the report, saying any future decisions about rules and regulation should be based on hard data, and not “fantasy figures” in the report.
“It may be inconvenient to the anti-gambling lobby, but the fact is that 30m people – around half the adult population – enjoy a flutter in the UK, while the betting and gaming industry contributes £8.7bn to the economy in gross value added, pays £3.2bn a year in tax and employs more than 100,000 people,” Dugher said.
“If people were restricted from betting in the regulated industry, they would simply migrate to the growing unlicensed, unsafe black market that employs no one, pays no tax and contributes nothing to UK plc. To think otherwise is, at best, naive.
“It’s disappointing but unsurprising that anti-gambling prohibitionists seek to deliberately downplay the economic contribution the industry makes, just because they don’t like the industry. They should stop looking down their noses at the people who enjoy a bet or who work in the industry.”
The SMF previously published a report in August 2020 that called for, among other things, a £100 monthly “soft cap” on deposits, after which affordability checks must be carried out for further spending.
This proposal was then included in the Great Britain’s Gambling Commission’s consultation on remote customer interaction.