In this sponsored feature, in association with Titanbet Casino, looks at the effect of the gambling industry on the UK economy

Generating over £2.3 billion towards the UK GDP, the gambling industry makes a significant contribution to the economy, and supports almost 40,000 jobs. It has a total economic footprint of £5 billion, and is likely to continue to thrive well into the future.

New Gambling Regulations

When the 2014 UK Gambling Bill came into effect, online casinos were required to pay a 15% point of consumption tax, and apply for a licence from the Gambling Commission. In order for this to be approved by the regulator, some operators had to make adjustments to their sites, while others developed a new brand, like Playtech’s UK licensee, Titanbet Casino.

Based on research from KPMG, The Remote Gaming Association has said that a tax rate higher than 10% makes for a significant increase in the cost of operating in the British market, so companies in the industry could now benefit from re-evaluating their position.

The new regulations could have a knock on effect for UK players, with those operators remaining in the UK choosing to offset the tax by increasing costs to their customers. 

What this means for the UK economy 

Although both France and Spain have seen a rise in the use of unlicensed and unregulated sites, other countries have successfully enforced regulation, and it’s hoped that this will be mirrored in the UK.

When the Machine Games Duty was released last year, William Hill chose to close a number of their high street shops. However, this is not a signal of decline. Due in part to launching apps for mobile devices, the UK online gambling sector continues to see an increase in turnover.

The new 25% higher tax rate for fixed odds machines is expected to cost the industry £335 million in the next five years, and though these tax increases have caused share prices to drop, it has not been substantial, and gaming machines, self-service terminals, and the sharp increase in use of apps have all driven growth. The industry has already proven to be able to evolve and embrace changing technology such as contactless payments and smartphones.

The Future

New regulations have the potential to impact the future contribution of the sector, but despite various pressures, high street betting shops are still serving over 8 million customers a year. There are challenges ahead – gambling is still the only industry in the UK that pays more tax than it generates in profit.

A spokesperson for the Association of British Bookmakers said “The Government’s desire to continue to soak the industry undermines our ability to continue to support horse and greyhound racing.”

The new higher rate of tax may have a significant impact on company earnings and pre-tax profits, and could result in closures of both independent, and big name betting shops. But the industry still makes profits of £600 million, and contributes £1 billion to the economy.

Now is the time to focus on a period of stability, generate employment, and work to navigate through the challenges faced by new regulations. 

This post was brought to you in association with Titanbet Casino