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A panel assembled by a UK think tank at the Labour Party’s first conference since assuming power has examined the economics of gambling harm, with some panellists claiming that harm is underrated while economic benefit is overrated.
The online gambling industry offers “limited employment, a trivial economic multiplier” and it’s “detrimental to the economy”, said Derek Webb, who bankrolled the Campaign for Fairer Gambling activist group.
“The tax rate is too low; it is effectively subsidising the gambling sector,” he said.
His remarks were part of the Social Market Foundation discussion on Tuesday (September 24) at the conference in Liverpool called “Bad Money: The Economics of Gambling”.
It was a prelude to a report by the cross-party think tank that is expected to call for a rise in gambling taxes from the current 15 percent for online sports betting and 21 percent for online casino.
According to The Guardian newspaper, the report, expected before the end of October, will call for a doubling of the online casino tax rate to 42 percent.
The panel featured one of the first public appearances of new gambling minister Fiona Twycross, a member of the House of Lords.
Twycross had few specifics to offer, although she said the Labour government is broadly in agreement with the previous government’s white paper policy document and wants to strengthen protections against gambling harm.
But she could not offer a timetable for adopting reform measures.
Adrian Pabst of the National Institute of Economic and Social Research said he thought that research group’s 2022 report, which suggested tax income of £3.5bn from gambling was offset by an annual cost of harm of £1.4bn, needed updating.
That study was based on a 0.7 percent problem gambling prevalence rate, but if it was adjusted to match a 2.5 percent rate from a more recent study with different methodology, the cost of harm would be £4.6bn, he said.
Although there will be no quick action on white paper changes, the gambling debate is heating up.
Last week, the Betting and Gaming Council (BGC) released a study by Frontier Economics which claimed that black-market gambling by UK customers has grown to about 2.1 percent as restrictions tighten, even though it is still small compared with other European countries.
This week, a new Regulus Partners report on the black market said the unlicensed market is growing due to regulatory “friction” on bonuses and free bets, along with better product choices and fewer restrictions outside the legal market.
On the other side, Webb’s Campaign for Fairer Gambling released its own report claiming that online gambling reduced economic activity by an average of £1.3bn per year in recent years. That study was carried about by National Economic Research Associates.
Industry officials weighed in from the sidelines.
The panel debate “unfortunately ignores that betting and gaming are incredibly popular activities that bring huge benefits / enjoyment / utility to people. Not to mention jobs and taxes. 22 million people can’t be wrong,” said Vaughan Lewis, chief strategy officer at evoke, formerly known as 888 Holdings.
He was writing on Twitter/X.
A BGC spokesperson said “betting and gaming is a hugely popular leisure and entertainment pastime, and each month 22.5m adults in Britain thoroughly enjoy a bet, with the overwhelming majority doing so safely”.
“BGC members support 110,000 jobs, contribute £4.2bn in tax and generate £7.1bn to the wider economy, as well as pouring millions into sports like horseracing, football, darts, rugby league and snooker,” he said.
