Report Casts Doubt on Economic Benefit of Gambling Industry

An independent report on the economic benefits of gambling has cast doubt on the wider economic benefits of the gambling industry. The Double or Nothing? report questions the ‘business as usual’ mentality and claims a reduction in gambling would benefit society.

money in bowl

Report Claims Betting Industry Offers Limited Financial Value © Pixabay.

A fifty-page report entitled ‘Double or Nothing?’, published by The Social Market Foundation, has explored the gambling industry’s economic footprint and considered if the often-used defence of the gambling industry’s about economic benefits stands up to scrutiny.

Scott Corfe, Aveek Bhattacharya and Jake Shepherd argue that a reduction in gambling expenditure would see direct benefits such as a drop in problem gambling rates but also produce a net positive for the economy. They state that less gambling would increase gross value add (GVA), and as a result, there would be more jobs and tax paid.

The authors also believe the extra cash that consumers have would be spent on “economic multipliers.”, services and goods that benefit society at a higher GVA than what is gained from the gambling industry. The authors call on the government to be bold rather than timid and state that the case for tough regulatory reform is “compelling”.

The report highlights the 2005 Gambling Act, which was introduced to realise a growing sector’s economic benefits. The report states that gambling has been doubling, driven mainly by fixed-odds betting terminals (FOBT) and remote gambling, yet there have been no economic benefits. The authors argue this is because the extra money used for gambling has impacted their spending in other parts of the economy, such as retail and hospitality.

In the Executive Summary of the report, which can be downloaded from The Social Market Foundation website, they state they do not seek to ban gambling, but it is their opinion that tackling problem gambling is not just a moral obligation and one that would have positive outcomes for the economy.

Key findings of the Double or Nothing report:

  • The gross value added (GVA) of the gambling industry is estimated to have been £8.1bn in 2019. 45% higher than the 2010 figure of £5.6bn. The UK economy grew by just 18% in that time.
  • The sector’s growth coincides with the rise of online gambling. The remote sector has risen from 12% to 56% in one year.
  • The Office for National Statistics’ Business Register and Employment Survey (BRES) states that 85,000 people in Great Britain were employed by the gambling industry in 2019. This figure is down from 93,000 in 2015. The figure employed in the industry represents 0.3% of the workforce.
  • Stoke-on-Trent is the place in Britain that has the highest dependency on the gambling industry. 2.5% of local employment is linked to gambling, mainly due to Bet365 being headquartered there. The Coates family, who own the operator, also own Stoke City football club.
  • The author’s research shows that the gambling industry directly contributes about £4.3bn per year to the Exchequer. This figure includes Betting and Gaming Duties, corporation tax, employment-related taxes and taxes on products & production.

Researchers then compared the financial benefits from gambling and compared them to 129 goods and services and concluded that the gambling industry ranked 92nd for the GVA effect, a measure used to determine the benefits to the UK’s GVA per £ spent.

For wage effect, which measures The increase in aggregate employee compensation from each £ spent on gambling, the industry ranked 110th. The industry scored 92nd highest in the wage effect. That is a measure of the increase in aggregate jobs from each £ spent on gambling.

On the reports measure of “supply chain”, gambling ranked 116th out of 129, which the report states that consumer spending on gambling does little to create activity elsewhere in the economy.

Although The Social Market Foundation, which published the report is an independent charity, the Double or Nothing report acknowledges Derek Webb’s as a financial backer. Webb is the founder of the Campaign for Fairer Gambling and is a passionate advocate of gambling reform.

Have you enjoyed this article? Then share it with your friends.
Share on Pinterest
money in bowl

Similar Posts