Gaming reform proposals could cost industry £974m

According to a new study by the cross-party group Peers for Gambling Reform (PGR).

The statistics are part of an economic assessment of selected House of Lords gambling reforms first proposed by the House of Lords Select Committee on the Socio-Economic Impact of the Gaming Industry in July 2020.

The researchers looked at key changes, including online gambling affordability checks and outright gambling sponsorship bans, and their implications for UK tax revenue, the financial health of sports teams and the damage to the sector itself.

The introduction of a mandatory fee charged to operators for research, education and treatment (RET), as well as the reclassification of video game loot boxes into the gambling category, were also considered as part of the assessment.

In a report commissioned by PGR and prepared by consultancy NERA, it was estimated that all of the reforms proposed above would have a financial impact on operators of between £696 million and £974 million per annum if implemented after the UK Government's Gambling Act 2005 was revised. of the year.

“The decline in revenues of gambling operators as a result of these reforms could lead to a reduction in employment in the gaming industry,” the report says.

“However, redirecting government spending to other sectors that are more labour-intensive than the gambling sector could create up to 30,000 new jobs and could boost employee earnings by up to £400 million,” NERA added.

NERA estimates that the UK government spends between £270bn and £1.1bn in additional costs related to gambling-related harm, mostly from healthcare costs.

“It may be possible to reduce these additional costs with the recommended reforms and an effective RET program, although it is impossible to say exactly how much can be saved based on the data we analyzed,” NERA said.

In terms of sports gambling sponsorship, the report estimates that a complete ban would cost the English Football League (EFL) £26m, or 2.5% of its total revenue.

Of this cut, £20m will be lost through the cancellation of Sky Bet's existing sponsorship of the EFL, with the remaining £6m coming from the 12 EFL teams with gambling sponsorship agreements.

The removal of Betfred's sponsorship of the Rugby Football League would result in an annual loss to the RFL of between £500,000 and £950,000, or between £2 and £4% of total revenue, according to NERA.

“The sports leagues and teams we assessed are unlikely to be severely affected by a direct sponsorship ban as gambling sponsorship revenue is a small source of income compared to total and non-gambling sponsors exist to fill any resulting gap,” NERA added.

Addressing the report's findings, PGR Chairman Lord Foster of Bath said there was an urgent need to reform the UK gambling industry.

“This report clearly lays out the economic benefits of reforming the gambling industry, with an expected increase in tax revenue, job creation and increased funding for research, education and treatment,” said Lord Bath.

“The evidence base and economic arguments in favor of the reform have been created. This government now needs the determination to continue,” he added.