The Devil Pays No Taxes, BGC Urges UK Gov. to Support Legal Gaming

It’s either that time of year or the Betting and Gaming Council (BGC), the body that represents the British betting industry, knows something that we don’t – perhaps the legislative start date of the new, much-anticipated, Gambling Act.

They’ve urged UK lawmakers not to, proverbially, throw the baby out with the bathwater; as they consider new, fit-for-purpose, legislation to take gambling controls into the 21st Century.

The legal betting industry employs well over 100,000 people and pays around £4.5 billion (US$6.13bn/€5.4bn) a year in taxes – notably led by Bet365 and Betfred, who are based, respectively, in Stoke-on-Trent in the Midlands and Salford in the North West, key areas of the present Tory government’s “Levelling-Up” economic strategy.

But as the lawmakers ponder the future of gambling after almost 18-months of consideration, the BGC—backed up by a top-level report by forensic accountants Price, Waterhouse, Cooper (PwC)—warns that the UK is at a “dangerous crossroads”.

They lay bare the massive scale of the nefarious gambling market across Europe; an illicit enterprise that is fully-loaded and poised to flood any gaming space that would be cleared in the event of an over-zealous or draconian update to the UK’s creaking 2005 Gambling Act.

“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,” says BGC Chief Executive Michael Dugher.

At The Crossroads

“This [PwC] 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.

“BGC members alone employ nearly 120,000 people and pay £4.5 billion in tax in the UK.

“The black market, of course, pays no tax and employs no one in our country.

Dugher argues, additionally, that any shift to the unsafe black market would also jeopardise the £350 million (US$477m/€420m) a year which BGC members give to horseracing in sponsorship, media rights and the betting levy.

“[Such] financial support has proved crucial during the pandemic,” he stresses.”

In just two years, according to the PwC report, the number of British punters using unlicensed sites has more than doubled, to 460,000 people, and they stake billions of pounds – representing significant loss to the exchequer.

Across Europe over-regulation has only boosted bad markets.

In Norway, for example, the introduction of a state monopoly for all gaming—supported by draconian restrictions on stakes, affordability checks and advertising, has resulted in an illicit market that now accounts for over 66 per cent of all money staked.

In France–where online casino games are also a state monopoly—underground gaming accounts for 57 per cent of stakes.

And in Italy, where betting and gaming advertising is completely banned, the bad market has a near-25 per cent money market share.

It’s a pan-European pattern unfolding also in Spain, Denmark and Sweden following well intentioned, but ill thought out, legislation: “a road to hell paved with good intentions.”

Build Better Betting

“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,” says the PwC report.

“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.”

As the growth of these sites has rocketed, illegal offshore revenues in Norway have more than tripled since 2010 and the French gambling demi-monde has almost doubled since 2015.

The way forward for better betting in Britain, the BGC believes, is to up the good, progressive work already being done to address problem gambling and reinforce responsible gaming protocols.

The report concludes: “A balance is required to effectively regulate without promoting the black market. That balance is best struck when targeted restrictions focus on support for those at risk, but not excessively hinder or punish the wider public.

“Gambling on unlicensed sites is associated with more intense gambling patterns and more gambling-related problems compared to licensed sites.

“Findings demonstrate that gambling activities carried out on state licensed sites are associated with less overall harm to gamblers.”

As a strict condition of their license, UK operators in the regulated industry adhere to high standards including strict ID and age verification checks, no betting on credit cards–except for National Lottery gambling products–and participation in self-exclusion schemes.

Legal operators also offer important safer gambling tools like setting deposit limits and time-outs.

These policies—not slash and burn legislation—are the key to a healthy and responsible gaming future.