How Does The Gaming Industry Benefit The Economy?
From predicting the weekend’s football scores to guessing what the next royal baby might be called, there is no end of things we can have a wager on. But while this gives us the opportunity to earn a little bit of extra cash and have some fun while doing so, how do our betting habits affect the economy?
Well, you might be surprised to hear that the gaming industry supports thousands of jobs and contributes billions of pounds towards GDP (Gross Domestic Product). Therefore, next time you visit an online casino or play the lottery, you could well be boosting the nation’s financial position.
Making a case for gambling
About 10 years ago, researchers claimed that gambling could become one of the most lucrative industries in the British economy. By relaxing regulations and abolishing tax for gamblers, the Betting Research Unit at Nottingham Trent University said that the government could receive a significant economic boost.
Professor Leighton Vaughan Williams, director of the unit, said: "Our research suggests that recent policies designed to deregulate the gambling industry are likely to realise significant gains for the wider economy in terms of economic productivity.”
A decade later and the UK isn’t exactly bursting at the seams with Vegas-style blackjack tables. However, the contribution of online casinos has been huge, especially since the 2014 UK Gambling Bill came into effect.
This required all online casinos to pay a 15% point of consumption tax and apply for a licence from the Gambling Commission. Although certain operators offset this tax by increasing costs for the customer, it has noticeably boosted the UK economy.
Striking the right economic balance
Today, the gambling industry supports almost 40,000 jobs and has an economic footprint of £5 billion. But this only tells half the story, as numerous bookmakers have been critical of the government’s recent taxation policy.
In 2014, Chancellor of the Exchequer George Osborne revealed a new 25% higher tax rate for fixed-odds gaming machines. Over the course of five years, this could potentially cost the betting industry an additional £335m.
In response, The Association of British Bookmakers revealed: “The licensed bookmaking industry is the only sector in the UK that pays more in tax than it generates in profits. The Government’s desire to continue to soak the industry undermines our ability to continue to support horse and greyhound racing.”
But irrespective of this challenge – and there are campaigners who argue against these terminals - numerous operators have decided to concentrate on opportunities elsewhere, such as the Internet. The UK online gambling sector continues to increase turnover thanks largely to the popularity and capabilities of modern smartphones.
The future of gambling and the economy
While some believe the government’s stance on higher taxation for gambling is necessary, there is a chance that this could have a detrimental impact on the country’s economy, as operators might be priced out of the market.
But, even in the face of these obstacles, certain sections of the UK gaming industry are thriving, with some 8 million customers regularly contributing to the economy through their betting habits. What are odds on that habit continuing?