Report Shows that Proposed Gambling Reform Measures in the UK Could Cost Operators $1bn in Profits

Gambling reform proponents in the UK are daft. That’s the view of many in the industry, especially after a series of proposals have been released over the past year that shows a certain lack of understanding of basic economics. Peers for Gambling Reform, the Social Markets Foundation (SMF) and the All-Party Parliamentary Group (APPG) on Gambling Related Harm have delivered their versions of reasons why reform is necessary, although they only succeeded in showing that more knowledge was needed in making adequate decisions. A new report, prepared at gambling reform proponents’ request, drives home how far off the proposals have been and only adds to the confusion.

Shrinking the Gaming Industry Can Create New Jobs

While the list and scope of the proposals of the reform groups are extensive, the bottom line is that their suggestions would lead to a reduction of activity in the gaming industry. This, according to them, is okay, however, because it will somehow still manage to create new jobs. This is the takeaway from a follow-up report compiled by Nera Economic Consulting and released last week. The reformists had commissioned the firm to prepare a new report, partly in response to the massive backlash they received over last year’s proposals, but Nera’s findings haven’t helped clarify the situation.

The APPG, for example, had suggested last year that all in-play betting be banned and the SMF had suggested that there should be a substantial cap placed on deposits. Nera points out that these measures, as well as a few others, would lead to a reduction of industry profits by as much as $1.3 billion (£974m) a year. That would inarguably force many operators to give up on the UK market completely, as some have already done, but Nera believes that it would still lead to the creation of new jobs – as many as 30,000. Nera and the reformists rationalize that spending less on gambling will create more disposable income for other activities, such as tourism, but aren’t able to provide concrete data to support the assertion. The argument also assumes that the majority of gamblers spend massive amounts on their pastime, even though this has already been debunked.

The Gambling Industry Scoffs

While there is nothing wrong with fostering a better, safer gambling environment, reformists in the UK continually try to introduce changes that are akin to prohibition, not to the creation of a responsible, mature market. There has never been any evidence that shows eliminating gambling advertisements during sporting events or gaming sponsorships of sports organizations led to an increase in gambling activity, yet gambling reformists have repeatedly made calls for the relationship between gambling and sports to be eliminated.

There has also been a call for “affordability checks” to determine whether someone has the financial means to deposit even $115 (£141) on an online gaming site. However, there is no type of affordability check-in place if someone wants to head to the local pub each week and buy everyone a round.  Betting and Gaming Council CEO Michael Dugher has called the report’s claims “economically daft” and “fantasy.” The gambling industry has taken strides to establish a more responsible ecosystem and can work with regulators to implement new policies, but only if those policies are approached with at least a minimal modicum of common sense.