Impact of Online Gambling On UK Economy

Online gambling is gaining in popularity in many parts of the world. At the top of the list of online gambling industry leaders in the United Kingdom. The country reached this point in 2018 when revenue figures surpassed 38.8% of all gambling income in the country.

This equates to is 5.6 billion GBP which is more than betting shops, land-based casinos, amusement arcades (both family-oriented and adult-only), bingo halls, and lotteries (including EuroMillions and the National).

According to the United Kingdom Gambling Commission (UKGC), the governing body tasked with licensing and enforcement of gambling regulations, the online (or remote) category of gambling in the UK does overlap a little into territory that already exists. This includes online sportsbooks, online casino gaming, online lotteries (including the national lottery games), and online bingo. However, one thing is very clear – online activity continues to increase which may result in a decrease in offline activity.

How Gambling Has Impacted The UK

The gambling industry has helped the UK economy greatly. Not only is it one of the largest industries in the country, but it is also one of the most profitable. This is why UK lawmakers actively pursued to tax and regulate gambling. While other countries view gambling as a negative and have banned it completely or placed extremely strict guidelines upon it, the UK has embraced gambling activity. With the popularity of online and offline gambling in the UK, the federal government sees potential for a new stream of revenue. That income may be used in several ways to benefit citizens. Check out this resource for more on casino activity in the UK.

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Gambling Has Created Jobs

Stats from 2019 show that over 50,000 employees were working directly in the gambling industry in the UK. That breaks down to roughly 12,000 working in bingo halls, more than 10,000 in arcades/gambling shops, 13,000 at land-based casinos, 1,000 in lotteries, 10,000 in remote gaming, and 6,500 technicians working to service and audit gaming machines. As for the 10,000 working in remote gaming, many are employed in the Isle of Man, Alderney, Gibraltar, and Malta at numerous casino businesses that operate online venues that target the UK gambling market. These offshore sites have become very popular on a global scale. They reach gamblers in more than just the UK.

Gambling Has Added Tax Revenues

Tax revenue figures show there is an upward trend developing. They show that gambling activity in the UK is growing at a rapid pace. For the 2020-2021 tax year, a total of 2.83 billion GBP was collected in taxes from all operating gambling companies. While that is down slightly from the 3.02 billion GBP collected in the 2019-2020 tax year, the 2000-2001 tax year tally was half of the 2020-2021 total (1.42 billion GBP). It is not hard to conclude that the UK government may be focusing more on tax revenues than people. This is particularly possible when one looks at the tax revenue generated by the gambling industry. However, this is not correct.

How The UK Government Is Giving Back

The UK government took a huge step in 2000 when it abolished all taxes on gambling winnings for UK citizens. The legislators said they did this because, in their view, gambling should be considered a form of entertainment. This means that rather than viewing gambling winnings as income, it would not be taxed as such. Instead, the UK government turns to the casino and gaming license holders for taxes. The online gambling license holders pay a greater tax amount compared to their land-based counterparts. Online sites have lower overheads, less staffing costs, and do not pay as much income taxes. Plus, online gambling has provided UK citizens with a source of entertainment enjoyed from the comfort of home, or during a break from work at the office.

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The Strictly Regulated Gambling Industry In The UK

The UKGC has an international reputation of being a tough regulator. Many online casino review sites state that an online casino with a UKGC license is highly likely to be a legitimate operation as the guidelines required for such a license are extreme. With this in mind, the UKGC also takes the issue of problem gambling very seriously. The governing body has tight controls in place to assist gambling operators in identifying problem gamblers early. In-house teams are working ‘round the clock to help players understand the way casino games work, how to set responsible gambling limits, and how to stay within those limits. The UKGC enforces the need for responsible gaming controls to be present at all online gambling sites operating within the United Kingdom. These controls force players to set play time limits, loss limits, deposit limits, and additional playing controls.

The UK Point of Consumption Tax

The way that the UK’s online gambling industry operates, the country benefits economically while still allowing citizens to gamble online. The country has something called a point of consumption tax which was increased recently to 21% from 15%. The increase has not scared off any of the UK’s licensed gambling operators simply because there are enough gamblers within the country to keep all licensed operators making a healthy profit after taxes. The system ensures that gamblers have access to fair games and employees working in the gambling industry earn good wages.

Final Thoughts

The UK has a strict, but a profitable system in place that controls the gambling industry within that country. It must be working as the industry continues to generate a huge volume of revenue. Taxation is steep, but UK citizens are not taxed on their winning. Instead, the gambling operators pay the hefty taxes, with online operators hit even harder. With gambling being so popular in the UK, there is enough activity to keep all operators in business earning good profits and feeding a generous stream of income to the UK government. The system here works so well that other countries could learn a thing or two from the successful model in place in the UK.

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