UK: BGC slams Lords’ “fantasy” gambling reform proposals
The House of Lords has followed up its proposal for gambling reforms with an economic analysis, and the industry isn’t impressed.
UK.- The British gambling sector has slammed an economic assessment of proposals by the House of Lords’ Peers for Gambling Reform.
A study from Nera Economic Consulting provides an economic analysis of the Peers for Gambling Reform proposals set out in its report, Gambling Harm – Time for Action, last year.
However, the industry group the Betting and Gaming Council blasted the analysis as “economically daft” and based on “fantasy figures“.
The Lords’ proposals set out last year included the introduction of stake limits and standardised play speeds for online gaming, affordability checks and a ban on gambling sponsorship in sports.
They also proposed classifying loot boxes as gambling products and the introduction of a mandatory “smart” levy to fund research and education around gambling-related harm.
Nera Economic Consulting’s assessment now aims to provide a breakdown of what the economic impact of those measures would be.
The conclusion it reaches is that the Lords’ proposals would reduce profits in the gambling sector by between £696m and £974m a year, but that this money would be diverted to other sectors that would better help the economy.
Nera also concludes that the reforms would increase tax revenue and boost funding for gambling harm research, education and treatment.
Online casino stake limits
Nera’s report concludes that a stake limit of £5 would reduce the amount wagered on online slots by 14 per cent to £1.19bn, based on slot stakes wagered in 2017. A cap set at £2, which would bring online slots in line with land-based slots, would see wagers drop 23 per cent to £1.06bn.
However, Nera did not try to quantify possible substitution, for example, the possibility that customers might play for longer.
It also opted not to cost the potential impact of the Lords’ proposal to limit spin speeds in slots, but it did do the maths for table games. The report says that a minimum speed duration of 60 seconds in roulette would reduce wagers by up to 76 per cent.
Affordability checks
The report considers several scenarios for affordability checks, which the Gambling Commission this week dropped from its immediate points of action on customer interactions.
Nera estimated that mandatory checks on those spending more than 20 per cent of their income would reduce online casino gross gaming yield by 32 per cent, or £1bn and sports betting GGY by 22 per cent (£505m).
If checks were triggered at a lower spend, at 10 per cent of income, online casino yield would fall 45 per cent (£1.44bn) and betting yield 31 per cent to £727m.
Ban on gambling sponsorship in sport
Nera reported that sponsorship deals with gambling operators tended to be worth double those agreed with a non-gambling sponsor. It estimated that £26m would be lost across the EFL Championship, League One and League Two.
It suggested that to offset the drop in sponsorship revenue, fees should be introduced for the right to offer betting on the leagues and that revenue earned in higher leagues such as the Premier League, could be better distributed
Mandatory levy on operators
The report assumes a mandatory levy on gambling operators set at 1 per cent of industry profits. The levy, which has also been proposed by charities such as GambleAware and YGAM, would be split between research, support and treatment for gambling harm.
However, £20m would be needed to fund the Peers’ proposal for a new gambling ombudsman and a further £20m to allow the Gambling Commission to regulate loot boxes.
Response to the report
Peers for Gambling Reform claimed the report backed their proposals for reform, which are likely to inform the UK government’s current review of Britain’s gambling legislation.
Lord Foster of Bath, chair of the group, said: “This report clearly sets out the economic benefits of reforming the gambling industry with tax revenues looking set to increase, jobs that could be created and a boost to funding for research, education and treatment.
“The evidence base and now the economic case for reform have now been made. This Government now needs the resolve to get on with it.”
However, the industry is not impressed with the assessment.
BGC chief executive Michael Dugher said: “We welcome the government’s gambling review and we are confident that Ministers will make sensible decisions for the future that are based on serious evidence, rather than the fantasy figures contained in this report.
“The dream of anti-gambling prohibitionists has always been to somehow force people not to gamble or to gamble less, just because they don’t like betting. A minority of peers may look down their noses at the millions of working people who enjoy a bet, but the truth is that the overwhelming majority do so perfectly safely.
“And the idea that somehow restricting betting would create more jobs is economically daft and frankly for the birds.”
However, Dugher stressed that the industry was ready for change.
He said: “We are 100 per cent committed to change and we hope that the White Paper will lead to a package of reforms that continue recent significant improvements in safer gambling.
“Furthermore, our members are spending £100m on research, education and treatment of problem gambling, as well as £10m on the Young People’s Gambling Harm Prevention programme.”
