In a new report due to be presented to the UK government today, the Social Market Foundation claims that fewer gambling options could lead to better overall economic impact.
SMF Says Regulating Gambling to Boost Economy
For months now, stakeholders have cautioned that over-regulating the gambling industry would effectively deprive people of revenue and bite out of tax receipts. Yet, the Social Market Foundation, a prominent think-tank, thinks the opposite is in fact true.
In light of the pending Gambling Act 2005 review, the Social Market Foundation presents a report to the government today. Its findings argue The Financial Times cast a new vantage point on the entire debate.
Not only is the state not going to lose tax revenue, but just as well, the United Kingdom may see a boost to its economy, the report seen by the newspaper argues. Presently, gambling contributes around £8 billion to the economy, citing data from 2019, as well as £4.3 billion to the exchequer.
Yet, should gambling subside, the survey estimates that the Treasury would claim £171 million in tax revenue. Based on these findings, consumers are expected to invest their time and money into the economy’s more valuable sectors.
Such valuable sectors have longer supply chains and therefore have a bigger economic impact, the SMF claims cited by The Financial Times. Not only are jobs not going to be lost, but 24,000 jobs would be created as a result.
However, the country is now at a crossing-point. When companies first began to arrive in the country, they were trying to avoid UIEGA, a rather restrictive piece of gambling legislation. Most of the gambling firms in the UK, though, are homegrown.
Changes Have Already Begun
Regardless, they face a serious challenge that would most likely lead to a lot of changes. So far, companies have had an almost unrestrained power in the gambling market, enjoying advertisements on TV, online, and radio.
However, this started changing with a whistle-to-whistle ban on advertisement during sports events and FOBTs betting limits slashed to £2 per maximum bet. The Department for Digital, Culture, Media, and Sport has been giving every indication that leniency on the gambling industry is not on the cards.
One proposed measure is to suspend shirt sponsorships, which clubs fear would impact sports teams economically amid one of the worst financial crises they have faced. Yet, not everyone seems opposed to the measure, to begin with.
The study, though, as per the words of its SMF lead author Scott Corfe is only concerned with accurately gauging the economic and social impacts of problem gambling rather than looking to argue the case that a broader ban on gambling must be introduced.
According to the report, an average of 10% comes from problem gamblers, and the NHS reports that there are at least 300,000 people in England who are problem gamblers, for a total of 0.5% of the population. Many are children.
The Lingering Phantom of Black Market
One thing that was important, Corfe noted, was the lack of actual data about the consequences of such gambling disorders. Gambling-related hospital admissions have also gone up to 321, from 150 six years ago.
The SMF report also focused on highlighting that because of the industry’s shift towards the online vertical, fewer jobs were created. This argument puts some gambling proponents’ claims that the review threatens livelihoods in doubt.
Not everyone agrees with this either. King’s College professor of economics and public policy, Jonathan Portes, said that restricting gambling because it didn’t have a wider supply chain was unreasonable, and BGC chief executive Michael Dugher said that the report ran on “fantasy figures.”
Whether the SMF reports’ claims are right or not, over-restricting gambling would probably result in an exodus towards the black gambling market, as similar experiments in other countries have shown.