The report analyses the BGC’s contribution to the British economy, looking at gambling data covering the period between July 2021 and June 2022.
It found that although online gaming has ticked up on pre-Covid levels – rising 19% from 2019-20 – online betting revenue has remained fairly level, rising by just 1% to £34m compared to pre-pandemic revenue.
However, the report said that the online sector had “declined very significantly” throughout the last year. Combined, betting and gaming revenue during the first half of the year declined 19% year-on-year. For 2021-2022 as a whole, revenue was down by 15% compared to the previous year.
EY attributed this to “a shift back to land-based betting and gaming,” as well as “the gradual implementation of affordability checks over the past 12 months, plus the inflation-driven squeeze on household incomes.”
“This could in turn lead to leakage to the black market, for example, operators offering remote gambling products that do not hold a UK Gambling Commission licence for remote gambling,” the report continues.
Michael Dugher, CEO of the BGC, said that the delay in the much-anticipated 2005 Gambling Act Review means that operators and players are not receiving the clarification they need on affordability checks – which could drive some to the black market.
“This industry is serious about safer gambling, and it’s encouraging that the rates of problem gambling among UK adults remains low by international standards at 0.3%,” said Dugher. “We want to see technology used to ensure checks on spending are carefully targeted towards the vulnerable, not the vast majority who show no signs of harm.”
“But without government clarity on affordability checks, our members are concerned they are driving frustrated customers to the unsafe, unregulated black market.”
Inflation has also affected operators’ costs, the report says, with operators reporting a 70% increase in energy costs in 2021-22 compared to previous quarters.
Economic impact of the gambling industry
The report also revealed that the regulated gambling industry had contributed £7.1bn ($8.72bn/€8.25bn) to the UK economy between 2021 and 2022. This was roughly £800m less than in 2019, when Ernst & Young conducted the first such report.
The total contribution is made up of £2.3bn in direct gross value added (GVA), £2.7bn in indirect GVA generated by the BGC’s supply chain and £2.1bn in inducced effects, which is spending generated by people employed by BGC members or their respective supply chains.
GVA examines how each UK sector contributes to the economy by measuring the value of a good or service and taking away the costs of inputs or raw materials that went into creating it.
In addition, the industry’s tax contribution made up 0.37% of the total tax receipts in 2021-2022, larger than its share of the overall economy.
Members of the betting and gaming sector contributed around £2.0bn in excise duties, plus £1.0bn more in income tax, National Insurance contributions and corporation tax payments to the Exchequer.
Gambling Act review
Dugher continued by emphasising the role of the gambling industry in the UK economy, saying that it cannot continue to contribute the way it has without clarity from the Gambling Act Review.
“The UK’s regulated betting and gaming sector is a genuine global leader,” he said. “Some 22.5 million adults enjoy a wager, on the lottery, on bingo, on any number of sports, online and in casinos.”
“Our members pump billions into the economy, support the Treasury with more billions and support over one hundred thousand jobs. But this contribution is never guaranteed. This industry needs to thrive if it is to maintain its status as a global leader.”
“We urge the Government to find an evidence-led, balanced white paper that protects the vulnerable, allows the vast majority who bet safely to continue to do so, and crucially allows business to thrive.”
Original article: https://igamingbusiness.com/casino-games/ey-report-affordability-checks-contributed-to-online-revenue-drop-in-2021-22/
