When it comes to gambling in the UK, Wales has been an important location for the inception and development of the industry. In fact, Britain’s first ever bricks and mortar casino was opened here back in 1961.
The Casino Club in Port Talbot led to a whole host of new establishments and while Wales has now been overtaken by other locations around the UK, it can be proud of that historic ‘first’.
But what about the future? With more punters heading online to place their bets and to take a spin of the roulette wheel within new online casino slots, how can the Welsh economy benefit and grab its share of some huge numbers?
What’s it Worth?
The figures involved are simply vast: In May 2019, the UK Gambling Industry reported that its sector was adding revenue worth some £14.5 billion per annum. A year earlier, the 2018 statistics showed the figure to be £14.4 billion so while that isn’t a stunning increase, it represents steady growth over what has been a difficult 12 months for the sector.
Physical betting shops are under particular pressure and in 2018, a crackdown on Fixed Odds Betting Terminals (FOBTs) led to a loss of revenue for many established names that operate bricks and mortar gambling halls.
The fact that the sector continues to grow is, therefore, likely to be a testament to the success of the online gambling industry. With fewer overheads and no restrictions on floor space, online casinos and sportsbooks are given considerably more room to develop.
Online operators can provide dozens of table games while there is scope to list many hundreds of casino slots from different software developers. Those who still prefer a trip to a physical betting shop can still stake on any available sporting market but in terms of casino play, the online companies have the edge.
There is even a live casino room available at many operators to offer an experience close to that of land based premises. It’s that element of choice and convenience that is driving online business and, in turn, the overall gambling industry. But back to the original question concerning Wales and the potential benefits for the economy.
A word on UK tax laws
Naturally, some of that revenue is going straight back to the individual operators in profit but a significant proportion of gross income is taxed by the UK government. The biggest change to tax laws in recent years came in 2014 and it was one that affected remote operators whose businesses were located outside of the United Kingdom.
The UK Gambling Commission changed the rules, making tax a point of sale issue rather than a point of origin with a figure set down at 15% of revenue. Initially, some operators withdrew from the UK market but the majority stayed and the new tax revenue has helped to boost overall income quite significantly.
In 2019, that rate of Remote Gaming Tax (RGD) has risen to 21%. The increase was announced in the UK budget of 2018 and, once again, it has led to a small set of withdrawals. However, most operators have stayed faithful simply because the UK is such a lucrative market. There are fewer restrictions than in most countries and a significant amount of revenue can still be derived here.
How It’s Spent
While the picture has looked quite positive so far, there are some areas that the gambling industry need to address. Extra revenue has been used to tackle problem gambling and at a meeting in Cardiff at the start of 2019, issues and measures were discussed.
While that may seem like a juxtaposition, the UK Gambling Commission rewards companies who care for their customer base and the social responsibility element is an important factor for those looking to trade here.
For physical establishments, there is, of course, the question of employment. Sadly, back in 2018, the government rejected a proposal to build a vast casino in Ebbw Vale which would have created some 6000 jobs. It’s the one that got away but similar establishments across Wales bring in direct revenue to the region.
Sport for All
Gambling companies also bring in vital revenue to sports clubs in the area. If we look at the two obvious examples, Cardiff City have been sponsored by sportsbooks in the past and they have signed lucrative deals with betting partners too.
Moving across to Swansea City and we find that the club currently has a new shirt sponsor in place for the 2019/20 season. Once again, this is a gambling operator and there is a betting partnership in place to back that up.
Whilst the subject of gambling sponsorship in football and other sports is up for debate, there are many positives here. Cynics may argue that the money generated from these deals is simply ploughed into the clubs in order to pay rising transfer fees and extravagant player wages. If, however, we look behind the headlines, we find that many of these sponsors work to help the community and grass roots football in the area.
Not everybody will embrace the financial benefits that gambling can bring into any economy but it is hard to ignore those revenue figures. As part of the United Kingdom, Wales and its people can continue to benefit even in a climate where physical gambling establishments are giving way to the rise in online operators.