The online gambling industry in the UK is facing increasing scrutiny over its economic impact, with calls for higher taxation and stricter regulations gaining momentum. A report commissioned by Campaign for Fairer Gambling, conducted by the economic consultancy National Economic Research Associates (NERA), highlights the detrimental effects of online gambling on the UK economy. According to the report, the rise in online gambling revenues, which have increased from £4.2 billion in 2015-2016 to £6.5 billion in 2022-2023, has led to a significant withdrawal of money from other sectors that could generate more economic activity.
Derek Webb, the founder of Campaign for Fairer Gambling, emphasizes the need for adequate taxation and restrictions on online gambling to foster economic growth. He argues that the online gambling sector must be taxed properly and that stimulating this activity should be curtailed, as it does not contribute positively to the economy.
The Nera report underscores that online gambling providers enjoy high margins and low costs, which means that if gamblers were to spend their money in other sectors, it would have a more beneficial impact on the economy. These alternative sectors are more labour-intensive, creating more value in terms of economic activity, job creation, and wages. The report estimates that the average annual spend of £5.6 billion on online gambling between 2015-2016 and 2022-2023 has reduced economic activity by £1.3 billion and wages by £2.6 billion.
However, the gambling industry is sceptical about the proposed increase in taxation. Representatives from the Betting and Gaming Council (BGC) argue that higher taxes would make the legal gambling market less attractive, driving players to unregulated and unsafe online gambling platforms. This shift would not only fail to encourage spending in other economic sectors but also deprive the economy of revenue and provide no protection for safer gambling practices.
A forthcoming report from the Social Market Foundation, a think tank, is expected to address the reform of gambling taxation. Research director Dr. Aveek Bhattacharya has indicated that the gambling industry has been under-taxed for too long, suggesting a clear direction for future policy changes.