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Does Gambling Contribute Positively or Negatively to the Economy?

raining moneyThe United Kingdom has had one of the most liberal gambling industries since the Gambling Act 2005 was brought into law. Signed into effect by Tony Blair and his Labour government, the Act allowed for casino gaming, sports betting, bingo and other forms of gambling to take place within the UK, as long as a licence was held by the operator providing such. This was also something that remained open to foreign companies. Again, as long as they applied for and paid for a gambling licence from the UK Gambling Commission, then they were legally able to provide their services to the UK gambling market.

This is how things remain for the moment, although the Gambling Act 2005 is currently being overhauled by the powers that be to fit in with today’s modern age. The question is, has this liberal gambling industry in the UK contributed towards the economy positively or negatively through the years? And does it still contribute as much today as it used to originally? We are going to take a look at all of the positive and negative impacts that the UK’s gambling scene has had on the economy.

Positive Contributions Towards the Economy

Positive ReviewYou can definitely say that a huge positive for the economy to have come from the gambling industry is the job opportunities it has brought. Both land-based and online betting establishments require employees to have them operate properly. Job opportunities from these establishments allow for local people to acquire a position and help the economy. And when you consider the number of land-based casinos, bookmakers, bingo halls, poker rooms and so on, across the UK, thousands of jobs have been created this way.

Why? Because while many people simply see the croupiers operating at the game tables, these gambling establishments actually provide a lot more opportunities. Bar and waiting staff are required, security people to keep things in order, but also people behind the scenes, so to speak. This includes IT consultants, accountants, website developers and so on. Not only does this keep people employed in the UK, but it ensures that staff earn their own money which they will inevitably put back into the country’s economy. According to data from 2019, around 46,000 people work in the gambling sector in the UK.

At the same time, whenever a land-based establishment is successful with punters, it can have a big effect on nearby surrounding businesses as well. While some time out at the casino is one part of a good night for many people, these people will also want to eat and drink at some point. Perhaps they will want to go to the cinema to see a film first. Maybe a nightclub is calling for them to go dancing once they have had a casino flutter. Gambling establishments also provide good locations for stag parties and hen does, meaning that more people attending will spend more money in theory. These people will also possibly need a hotel to stay in overnight if they are not from nearby, which is another positive economic knock-on effect.

Of course, not everybody visits land-based casinos anymore, which is why the online gaming sector has experienced such a boost in popularity. Online betting options provide a certain level of entertainment for people choosing to play them. After a busy day at work, for some people, it can be quite relaxing to get home and spin a few slot reels or have a few hands of cards dealt out at the online blackjack table. It remains the fact though, that they will likely be spending their money at a UK-licensed casino. Therefore, the tax taken from that licensed operator will directly contribute to the country’s economy.

tax effect on gambling industry

All licensed operators in the UK pay tax on their revenue, and this is then plunged into various different sectors. And considering that the gambling sector produced revenue of £14.3 billion in 2019, this is by no means a small sum to be taxed. Therefore, contributions to the economy of the country from this tax is significant enough for it to remain a focal point of the UK income. A vast majority of taxes in the UK in general are spent on welfare, health, state pensions and education.

It generally depends upon the type of gambling business in operation as to how much tax is paid by the company. For example, if it solely operates as a bingo hall, it will not have the same taxation level as an establishment providing slot machines, table games and so on. The highest taxes are those paid by remote gambling operators, and this is regardless of whether they are UK-registered brands or not. The tax rate was recently raised in fact for gambling companies, from 15% up to 21%.

The gambling industry in general is always evolving too, with numerous innovations being brought to the forefront. New people register at online casinos and sportsbooks every day, meaning that it is not likely to be banned by the government, as it is a valid source of income. New technology is always being worked on, and more live casino experiences to be had from home are on the agenda for many developers. Virtual reality casinos are likely to become even more prevalent in the coming years, meaning that websites providing such should have more opportunities to contribute to the economy. That could be in partnership with local businesses, for example – what is to stop there being a virtual waitress from a nearby business in a casino where you can order a takeaway to be delivered while you are engaging in slot gaming?

Negative Impacts on the UK Economy

money laundering in a washing machineThere is little to deny that the liberal gambling scene has had some positive impacts on the economy, but what about negative issues? Well, yes, there is little doubt that some of these have occurred over the years, too.

One of the primary issues with having such a liberal market is the high level of public service consumption that physical establishments have. Take a look at road maintenance, for example. And you do not need to be a genius to see that betting establishments have been at the centre of more than one criminal activity throughout the years. While the Gambling Commission has laid out plans and attempts at combatting crime associated with the sector, it is unclear really how much of this has been successful. It is not uncommon to hear of money laundering being connected with gambling sites and physical establishments. Casino neighbourhoods have had to deal with this ever since such establishments became functional nearby.

It is true to say that the gambling industry has been very positive and praising over the successes relating to the UK economy that it has brought, although has not remarked on any of the negative outcomes. This obviously provides quite a skewered view of exactly how balanced the impact has actually been. Only in recent times has it really gotten behind the responsible gambling movement, for example. And it took the Gambling Commission some time to really drive home that this was a necessity for all licensed gambling companies.

stop gambling addiction big red buttonAnother primary negative side effect of the liberal gambling market in the UK is the impact of gambling addiction. You do not need to be a genius to know that gambling games can be exceptionally addictive. Winning money is all that some people care about. Unfortunately, when they lose more than they can afford, it puts huge pressure on their life and the lives of others around them. A survey done in 2020 by GambleAware estimated that up to 2.7% of adults in Britain (around 1.4 million people) were suffering from problem gambling. And when you factor in the number of people to have been affected by someone else’s gambling addiction, you are looking at around 5 million in total. That puts a strain on the NHS, with money being pumped into helping people recover from their addiction, rather than other areas.

Of course, there is also the instance of a casino becoming too successful. By that, we mean that people are spending more of their time depositing money at online casinos or spending it in land-based casinos, whereas that money could be being spent elsewhere for leisure activities or other contributions towards society. Of course, attracting a large number of players to your establishment is great for the business and the local area, but there is also a risk that it can negatively affect local businesses, too. Should a casino or other establishment be built with a bar and restaurant inside it, that increases competition for other bars and restaurants. They could end up missing out on necessary business due to this.

Does the Good Outweigh the Bad?

risk vs reward

It is, without a doubt, very difficult for the government to get things so right that the gambling industry is 100% balanced evenly. There will always be positive and negative aspects to anything in life. That’s just how things are. Obviously, it is hoped that a governing body will try its hardest to ensure that the positives far outweigh the negatives with anything. Gambling businesses do bring a high level of positives forward for the economy, but do they come with too high a risk in the areas of problem gambling and criminal activity?

Well, it may be the opinion of some that that is the case right now. However, with the overhaul of the country’s Gambling Act 2005, the likelihood is that these negatives are going to be tackled in the best way possible. Whenever this comes into effect, only time will tell. It is more than likely going to be the case though, that for every positive boost, a new negative will arise alongside. You will never please everybody with everything all the time.

The thing to take from the UK’s gambling scene is that it has plenty of positives for the economy. Would it be the same without such a liberal market? Probably not. As noted, it contributes a lot in taxes and creates plenty of jobs etc. These are not impacts to be sniffed at, as they are a necessity, we would say.

If the number of gambling addiction cases and gambling-associated crimes can be reduced through the legislation overhaul in some way, then this would go a long way towards making more people believe in the positive aspects of such a liberal gambling sector. It now rests in the hands of the government and the Gambling Commission.

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