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Is this growing industry good for the UK?

THE UK has had a long-standing love affair with all kinds of gambling and it’s an activity that’s entered the mainstream to greater levels over time. In their earliest days, casinos were exclusive private members’ clubs frequented by the aristocratic and well-heeled.

But today the country’s casinos are far more democratic with the huge majority of the estimated 140 in the UK having no specific entry requirements beyond the need to be 18 years of age.

Another sign of the increased acceptance of gambling comes from the fact that almost 60% of Premiership and Championship teams are currently sponsored by betting companies. But then again, football is by far the most popular sport for fans to bet on. Today it even outstrips horse racing in terms of bets made.

Ever since the first betting shops opened in the 1960s – before that betting was only permitted on the race courses themselves – these have been where punters have gone to bet on the 3.30 from Redcar.

At their height, there were over 15,000 of the establishments in the country but recent figures suggest that today it is more like 8,400, with numbers slowly decreasing. Of the ones that are still open many claim to make the majority of their profits from the Fixed Odds Betting Terminals with each one generating an average of around £1,000 a week in profit. With an average of four machines per betting shop it’s easy to see why the industry has been so resistant to limiting the size of stake to a maximum of £2 that can be wagered – which was announced in May 2018.

The online explosion

But the real showstopper over the last couple of decades, in terms of both growth and gambling yield, has been online gambling. As digital technology has come on leaps and bounds in a very short period of time, online gambling has risen to be the single largest contributor to the Gross Gambling Yield, contributing £5.4 billion out of a total of £14.4 billion – around 38%.

It’s also served to introduce a whole new demographic to gambling as players tend to be younger and more highly educated than those typically wanting to try their luck. The reasons for this are fairly self-evident.

The games are more engaging and involving ever before. In fact, they’re equal in quality to today’s leading consumer titles, with high-quality video and audio immersing players in the gameplay, and bringing the whole casino experience into their living room.

With unique branding that’s based on the vintage look and feel of 1960s Vegas, plus a range of exciting games from slots to roulette and more, this one-of-a-kind online casino goes further than others to stand out from the crowd and broaden its audience.

Also worth mentioning in this context is the fast-emerging sector of eSports betting. Combining online video games and the chance to bet on the outcome is especially appealing to young gambling enthusiasts.

While it’s still in its relatively early days, there’s every reason to believe that this will continue to grow in popularity as more contests are established and the audience continues to expand.

Last, but by no means least, is the National Lottery. First introduced back in November 1994, it’s since raised billions of pounds for good causes of every kind – as well as creating thousands of millionaires. So of all of the forms of gambling in the UK this is indisputably good for the country.

For example, without it there are many schemes and charities that simply wouldn’t be able to exist and each year it raises around £1.5 billion to contribute to them. And with 12% of the revenue it raises going straight to the government it also has many other vital contributions to make to the UK too.

In fact, when one’s considering whether the growing gambling industry they are the financial benefits that one has to look at first.

Where the boom began

To put things into context, one has to go back 14 years when the Tony Blair’s Labour Government decided it was going to revolutionise the industry with its introduction of the Gambling Act in 2005. This contained a number of radical measures which included putting the burden of paying gambling tax onto the betting companies themselves instead of taking them from players’ winnings. The Act also allowed advertising on TV for the first time.

There were also plans to grant licences for a series of so-called Super Casinos to be built. The idea behind this was to create Las Vegas-style resorts particularly in areas where the economy was depressed and as a means of urban regeneration. Despite the granting of a number of licences, these never came to be built as the plan was quietly swept under the carpet when Gordon Brown took over from Blair and the global economic crisis loomed.

While the Bill was passed in 2005, it wasn’t until 2007 that it was put into action. To get an idea of just what a transformation this led to, in 2008 the Gross Gambling Yield was £8.36 billion and in 2017 it had risen to £14.4 billion. But even more remarkable was the increase in online revenues that stood at just £817 million in 2009 but had risen to £5.4 billion by last year – an increase of well over 600%.

It’s debatable how much this directly benefits the UK economy as many of the biggest players in online gaming are based overseas so, ultimately, the money leaves the country. But this has been mitigated considerably by the new Gambling Bill that came into force in 2014 under which companies with a licence to operate in the UK have to pay 15% tax on all profits – a very valuable addition to the nation’s coffers. This is especially true in the current climate of austerity, with public services such as schools, hospitals and transport in dire need of government funding.

Employment opportunities

Another key indicator of just how valuable any industry is to the UK comes in the number of people that it employs. The latest Gambling Commission figures show that the recorded total of people employed in every area of gambling in March 2018 was 107,940 – a 0.6% increase on the previous year. The figures cover all kinds of jobs – from dealers in casinos to betting shop employees, with many of the posts being part time. In this respect it’s an industry that can offer the flexibility that many others can’t, so this is a definite way in which it can be seen to make a positive contribution to society.

The emergence of online gambling has also been something of a major wake-up call for the traditional betting companies, which had previously relied on betting shops for the bulk of their income. As well as having to go up a very steep learning curve to compete another solution, many have employed is through joining forces with competitors. So over the last few years there have been a number of mega mergers making billion pound businesses and generating even more tax revenues and even more jobs.

Challenges to gambling

The past 12 months have seen several significant challenges to the gambling industry take shape. First came the aforementioned news in that the government was to reduce the maximum stake in FOBTs to £2 in a measure to counter problem gambling.

Then in December 2018, gambling firms agreed to back a sports advertising ban that would eliminate their right to air commercials during live televised games.

Now, the government is considering banning the use of credit cards in gambling as part of a broader crackdown on the industry. The move could see operators making billions less in profits every year, but has been welcomed by many high-street banks.

Summary

While the financial advantages of gambling in the UK are clear, it’s also important to say that it brings pleasure to millions of people too – from a surprise win on the Grand National to making a game of football a bit more involving. Then there’s all the enjoyment of being able to play online whenever and wherever you want, at home and even on the bus.

And, as the industry continues to expand and technological advances like VR make the online experience even more involving it seem likely that more and more people will be attracted to play. As to where this will leave us in, say 10 years’ time, we’ll just have to wait and see.

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