The British betting industry remains a key contributor to the UK economy, despite contracting by nearly 25% in GDP terms since 2008, according to a new study published by Deloitte.
The Association of British Bookmakers-commissioned report found that the betting industry contributed £2.3bn to UK GDP and directly supported 38,000 jobs in 2011, with remote betting generating £0.4bn of the total.
However, according to The Full Picture: Measuring the Contribution of the British Betting Industry, this was down from £3bn in 2008 when Deloitte last undertook the impact study, impacted by falls in both profitability and employment costs during the intervening period.
The drop in GDP contribution was unsurprisingly most pronounced in remote betting, where gross value added to the UK economy was down 45% since 2008, due to a 17% fall in British-regulated expenditure and a 25% fall in employment, driven by increased offshoring by online operators.
The economic impact of Ladbrokes, William Hill and Betfair all moving their online arms offshore to Gibraltar since 2008 effectively offset a 23% rise in consumer spending on remote betting in the UK from 2008 to 2011.
The tax paid to the exchequer by the British betting industry however remained stable at just under £1bn, as did the industry’s overall economic footprint. According to Deloitte, the industry’s overall impact on the UK economy – magnified via its links with other sectors such as horse racing and advertising, as well as the wider retail environment - was £5bn in 2011.
The irresistible rise of gaming machines since 2008 also helped betting shops mitigate the impacts of the recession and the move to offshore betting, as these grew to account for just under half of betting shop revenue by 2011. Deloitte however warned that the proposed machine gaming duty of 20%, above the “tax neutral” level of 15-17% equivalent to the current AMLD and VAT regime, would hit small shops hardest.
The chairman of the Association of British Bookmakers, Neil Goulden, said the study showed that this “highly regulated and responsible” sector could provide “economic growth, jobs and retail footfall given a fair and balanced tax and regulatory framework.”
Article written by Katy Stirland
