BGC warns “naïve” regulatory changes could harm economic recovery

The Betting and Gaming Council (BGC) has voiced its support for the Chancellor’s economic recovery plan but warned the government about making “well-meaning but naïve changes” in the Gambling Review that could harm this strategy.

Chancellery Rishi Sunak will this week announce his Spring Statement, part of which will focus on an economic recovery strategy with plans for investment, jobs and tax revenue.

BGC chief executive Michael Dugher said the organisation would full support plans to help recover public finances after the novel coronavirus (Covid-19) pandemic but urged the government not to harm this recovery process by making too many changes to gambling regulation through the ongoing Gambling Review.

Referring to statistics from EY, Dugher said BGC members in 2019 supported 119,000 jobs across Great Britain, generated £4.5bn (€5.4bn/$5.9bn) in tax and contributed £7.7bn to the economy in gross value added.

Dugher also said BGC members have pledged to create 5,000 apprenticeships through their support for the government’s Plan For Jobs, while more licenced operators are signing up to the Kick Start scheme to provide job opportunities for 16 to 24-year-olds on Universal Credit and rolling out graduate recruitment schemes.

Singling out some operators, Dugher noted how Entain recently announced plans to launch a new, global innovation hub – Ennovate – in London, which will plough up to £100m into innovation projects, start-up investments and collaborations. Flutter Entertainment has also opened a new £15m technology and innovation hub in Leeds.

In terms of land-based operators, Dugher said retail venues like betting shops and casinos are just starting to recover following the Covid-19 lockdowns and any sudden changes in regulation could prove particularly challenging.

As such, Dugher and the BGC said any new regulations must be evidence-led and not risk the economic contribution its members currently make.

Dugher also warned over the threat of black market gambling, referring to industry research that European countries which brought in stricter regulations saw a spike in black market use.

He singled out Norway in particular, which introduced a state monopoly for gaming, coupled with restrictions on stakes, strict affordability checks and curbs on advertising. Dugher cited statistics that found more than 66% of all money staked in Norway now goes to unlicensed operators.

Citing a recent study by PwC that found British punters using unregulated sites has risen to 460,000, Dugher said a larger shift towards black market gambling could cost billions in tax revenue, while also placing players at risk, with such sites not offering the same protection tool as licensed operators.

“Our members are ready, willing and able to assist in the Chancellor’s post-covid economic recovery plan,” Dugher said. “They already support thousands of world-leading tech jobs across the UK, helping to generate billions of pounds in revenue for the Treasury.

“And with ambitious plans for further investment in the years to come to generate more quality and high skilled jobs in regions outside London, we are contributing to the levelling up agenda.

“But it is vital the industry’s contribution to sports, local communities, jobs and tax revenues, is not put at risk in the Gambling White paper and with well-meaning but naïve changes to regulation.

“The growth of the unsafe, unregulated black market in online gambling is part of a global trend and it’s foolish to think that there’s an enforcement solution to this. The DCMS simply throwing more money and a few extra powers at the Gambling Commission won’t fix this for the government.

“You have to protect the competitiveness of consumer products and avoid the kinds of intrusive restrictions that drive players to the black market. Anti-gambling campaigners may want to see a smaller regulated industry, but that would be bad news for the economy and the Exchequer.”

Author: Raymond Fleming