BGC supports UK Govt. economic recovery plan but warns against “naive” changes to regulations

The Betting and Gaming Council (BGC) -the industry body for UK betting and gaming- is backing the Government’s plan for economic recovery, although it has warned Ministers to not introduce “naive” changes to regulations that could lead to a smaller industry.

According to a statement released on Monday, The UK gaming industry will be backing the Chancellor’s economic plan “with investment, jobs and tax revenues.” However, the BGC calls on the Government “not to put this at risk” in the Gambling Review.

The long-awaited government proposals to reform gambling laws are now expected to be published in May, according to the UK press. The department for digital, culture, media and sport (DCMS) first launched a review of gambling laws in December 2020 to address concerns over addiction and minors’ exposure to advertising.

Michael Dugher, Chief Executive of the Betting and Gaming Council, pledged BGC members will support the Government’s economic recovery plan in an open letter, but urged Ministers not to introduce “well-meaning but naive changes” to regulations that could lead to a smaller regulated industry.

Ahead of the Spring Statement -one of the two statements HM Treasury makes each year to Parliament-, Dugher said the regulated gaming industry was ready to help Chancellor Rishi Sunak recover the public finances after the Covid pandemic “so that the Treasury can do more to alleviate pressures” on the cost of living.

According to a report from EY, in 2019 BGC members supported 119,000 jobs, generated £4.5 billion ($5.9 billion) in tax and contributed £7.7 billion ($10.1 billion) to the economy in gross value added. Out of those jobs, industry experts estimate around 30,000 are devoted to digital technologies, while last year the industry ensured over 50,000 employees underwent digital training skills.

Land-based venues in the UK, including betting shops and casinos, are now getting back on their feet-related pandemic closures and once again making a major contribution to hospitality, leisure and tourism, claims the BGC. But the industry warns that as the Government nears publication of the gambling white paper, new regulations must be evidence-led and “not risk the huge economic contribution members make.”

“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 leveling up agenda.”

However, the BGC Chief Executive warns that 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 naive” 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,” Dugher warned. “The DCMS simply throwing more money and a few extra powers at the Gambling Commission won’t fix this for the Government.”

The BGC claims that the growing threat of black market gambling risks undermining the prosperity agenda as well as player safety. According to a recent study by firm PwC found British punters using unregulated sites has risen to 460,000 and the amount staked is now in the billions of pounds.

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

The BGC had previously warned that the enforcement of stricter regulations could actually lead to a surge in black market activity. According to industry research and a PwC report for the BGC, black market gaming in European countries surged following the introduction of such measures on regulated operators.

The research analyzes comparable European markets such as Norway, which has introduced a state monopoly for all gaming and restrictions on stakes, affordability checks and advertising, resulting in a black market accounting for over 66% of all money staked. In France, where iGaming is also a state monopoly, black market gaming accounts for 57%.

“This analysis suggests that the UK has a more ‘open’ online gambling market and currently has a smaller unlicensed market share than our European benchmarks,” the PwC report says.. “Whilst it is not possible to isolate the impact of individual regulatory characteristics, the above assessment suggests that jurisdictions with a higher unlicensed market share tend to exhibit one or more restrictive regulatory or licensing characteristics.”

“We support the Gambling Review but there is a real danger that it leads to the regulated industry being smaller and the illegal black market growing substantially,” Dugher said last month. “Research is stark about the dangers of the black market, we have to learn lessons from abroad, and make the right choice at this dangerous crossroads.”

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