Gambling has become hugely popular in the UK and many factors point towards the gambling industry impacting the UKâ€™s economic growth through taxes and revenue. In fact, even simply joining and depositing on an online casino to play slots, table games or scratch cards can dramatically impact the UKâ€™s economic growth.
In 2011, it was reported that the gambling industry supported around 38,800 jobs in the UK and although the recession caused the gambling industry to take a hit, particularly as many companies made the move to offshore betting, the industry has continued to have a far reaching impact with a total economic footprint of £5bn gross value added. According to a report by the Association of British Bookmakers, the gambling sector is smaller than it was 2008, but they are continually contributing the same level of taxation to the exchequer as it did then, with the Gambling Commission including online gambling in their reports for the first time this year.
In the UK gambling is said to directly generate around £2.3 billion towards GDP, and everything from online casinos to bricks and mortar casinos contribute to the UKâ€™s economy. As land-based casinos and betting shops remain the first choice for many gambling customers, online gambling and growth in technology have seen mobile gambling grow rapidly, and in the UK around 70% of the adult population participates in gambling each year, through either form.
A new gambling bill came into effect in 2014, which registered online casinos were required to pay a 15% point of consumption tax before applying for a full gambling license. This made sure that all casinos were fully approved, and allowed the casinos to become a new revenue stream for the government. Although some land based gambling shops have been affected by closure over the recent years, there has been a growth in the UK online gambling sector, with both mobile and tablet devices increasing turnover, with its estimate economic footprint set to almost double by 2020.
Fixed odds betting terminals rapidly grew in popularity after the recession, and pay a tax rate of 25% which looks to generate even more of a contribution to the UK economy. Generally, the gambling industry pays more tax than it generates in profit annually, but with the growing demand of casinos and online gambling the sector should continue to thrive. Higher tax rates may have a significant impact on the gambling industry and specific businesses, but with the industry still making annual profits of around £600 million.
According to the UK Gambling Commission statistics covering market activity from April 2014 to Match 2015, which showed that the total gross gaming yield from online operations came to around £1.45b. Online casinos generated the most gross gaming yield, within this five month time frame, followed by betting and bingo. These statistics are likely to increase with the next UK Gambling Commission report in 2016.
This shows that the gambling industry has a huge impact on the UKâ€™s economic growth, but with toughening regulations and higher tax percentages, some businesses may struggle trying to pay them. However, this does not mean the end for the gambling sector, as with the growth in technology, the sector is booming and will continue to contribute to the UKâ€™s economy.