Report: Divert gambling spend to other sectors to boost UK economy

Cutting problem gambling rates would create jobs and boost the UK economy, according to a new report by non-partisan thinktank the Social Market Foundation (SMF). The report, entitled Double or Nothing, counters prior industry claims that changes to the regulation of online gambling as proposed by the Gambling Act 2005 review could result in economic damage through lost jobs. In contrast, the SMF suggests restrictions on gambling would lead gamblers to divert their spend elsewhere, which would have net economic benefits. The think-tank claims that if net gambling spend declined by 10%, or £1bn, with individuals instead spending that money on retail, the gross value added (GVA) would increase to the tune of £311m. Based on this reduction in net gambling spend, the SMF estimates the number of jobs in the economy would increase by 24,000, with the Treasury receiving an additional £171m in tax revenue. “The economic multipliers for gambling are significantly lower than for other items that consumers might reasonably purchase instead of gambling – such as retail goods and food services,” the SMF report explains. “For example, we estimate that £1m spent on retail would create 34 additional jobs once all effects are considered – more than twice as many jobs as would be created from £1m spent on gambling,” it adds. The report stands in stark contrast to sector claims that imposing strict restrictions in areas including affordability, advertising and sponsorship would result in significant financial shortfalls. Responding to these claims, the SMF said: “While some are calling for timid reforms – citing concerns about the negative economic impact of reduced gambling spend – our analysis suggests that this argument does not stand up to scrutiny once one considers the fact that problem gamblers would instead spend money elsewhere. “Far from being a case for timidity, the economics of gambling – presented in this report – are in fact a case for bold, robust and significant regulatory reform. “Done right, there is scope to both reduce the societal costs of problem gambling and realise economic gains, i.e. spending less prize money,” it added. In its methodology, the SMF said it was forced to rely on indicative or out-of-date figures to make ‘best guess’ inferences. To address this, the SMF has called on the government to commission an urgent review of the social and economic costs of gambling, commencing in 2021 and concluding in line with the Gambling Act 2005 review. The Social Market Foundation has previously recommended a £100 soft cap on monthly player losses.