Under two crucial conditions, the UK lobby group is now open to the idea of a gambling levy and seeks to safeguard the interests of land-based gaming operators.
The Betting and Gaming Council (BGC), an industry lobby group, is considering the possibility of a mandatory gambling levy to fund research, education, and treatment (RET) for gambling harm. However, the BGC is calling for specific conditions to be established before accepting the idea.
This proposition has emerged as a potential consequence of the UK government’s assessment of gambling regulations, and while the BGC had previously opposed the notion, stating that the voluntary donations system was effective, it has now altered its position.
The BGC is now open to the idea of a compulsory gambling levy for RET services, provided that certain conditions are met. The group advocates for an independent funding allocation system, and a tiered structure to safeguard the interests of land-based gaming operators. According to the BGC, a sliding scale mechanism must be implemented, with smaller percentage contributions from land-based gambling establishments, as these businesses have relatively higher fixed expenses for facilities and personnel.
There were rumours last year that the government had rejected the notion of a mandatory gambling levy, but the BGC is now apprehensive that the government may declare a universal 1% fee on all gambling operators.
The BGC cautioned that, like other enterprises operating on the high street, hospitality and entertainment industries, land-based gaming operators, including bingo halls, casinos, and betting shops, are encountering significant economic challenges, such as slower than anticipated post-Covid recovery, increasing fixed operating expenses, and high inflation, which is also impacting customers.
According to industry analysis conducted by the BGC, a universal 1% statutory levy imposed on land-based gaming operators would result in a 10-15% decrease in post-tax profits due to their relatively higher fixed costs, which online operators do not face to the same extent. The BGC further stated that casinos sustain 15,000 jobs and contribute £300m in taxes, while betting shops support 42,000 jobs and pay £800m to the government.
Michael Dugher, CEO of the BGC, stated that he has been expressing his ease with the idea of a statutory levy for some time, particularly considering that BGC members are already contributing funds and that the funding allocation is independent of the industry. Moreover, he pointed out that it was the BGC who suggested to the government last year that mandatory contributions should be implemented.
“But we want to see continued sustainable funding for RET provided it recognises the fact land-based operators are under greater cost pressures, so there has to be appropriate mitigation, and that funds continue to be distributed effectively and genuinely independently.
“Our largest members already pay 1 per cent to fund RET services via a wholly independent system. For the BGC and our members, the priority is ensuring the money reaches charities doing exceptional work and funds truly independent, evidence-led research. The mechanism used to generate those funds is an irrelevance by comparison. I also know that there were some in the NHS who had previously said they wouldn’t accept funding that came from the industry, so it is welcome that they now appear willing to do so.
“The industry’s biggest companies committed an extra £100m to tackle gambling-related harm from 2019 through a new independent and voluntary levy. They have gone further and will have donated £110m by 2024. They also give more in other ways including a £10m harm prevention programme for school-aged children delivered by leading charities YGAM and GamCare, which has reached over two million youngsters. This money is allocated completely independently of the industry and we rightly have no say on how or where it is spent. All of this is in addition to the £4.2bn we generate in tax – money that already helps fund the NHS.
“What’s important is that the money goes to helping the tiny minority of people who need it, not wasted on the cottage industry of anti-gambling prohibitionists, masquerading their biased work as ‘research’.
“But most importantly, any new system must be tiered to protect land-based operators like bingo, casinos and betting shops, who have disproportionately higher fixed costs because of buildings and tens of thousands of staff. They are still struggling post-covid, like every other retail, hospitality and entertainment business, with all the difficult economic headwinds.
“The government claim they believe in low regulation and low taxes for businesses, so they need to avoid this new tax leading to job losses or more businesses going bust.”
The BGC highlighted that it has provided millions of pounds for RET over the last two decades through its voluntary levy, which supports an autonomous network of charitable organizations that cater to roughly 85% of all problem gamblers who receive treatment in the UK. Additionally, the four largest BGC members committed to an extra £110 million that will be managed by GambleAware by March 2024.