British gambling companies allocated an estimated £2 billion to advertising and marketing in 2023, a figure that has sparked demands for increased taxation on the sector. This extensive spending encompassed various promotional avenues, including print and digital advertisements as well as affiliate programs that pay third parties to direct gamblers to specific operators.
The estimate, released by the media insights group WARC, significantly surpasses the £1.2 billion that the UK Treasury collected from online casino operators last year. Media insiders suggest that the actual expenditure on gambling advertising could be much higher, possibly exceeding £2.5 billion raised through the main industry duties, which also include taxes on slot machines and sports betting.
Calls for Increased Taxation
The Chancellor of the Exchequer, Rachel Reeves, faces mounting pressure from think tanks, Members of Parliament, and former Prime Minister Gordon Brown to raise these duties in the upcoming budget. As the government seeks to bolster public finances, the high advertising spend intensifies scrutiny of the gambling industry’s claims regarding the potential impact of tax increases.
The Betting and Gaming Council (BGC), which represents the industry, challenged WARC’s findings, asserting that actual advertising spend is closer to £1 billion. This figure is significantly lower than the £1.5 billion estimate provided by Regulus Partners in 2018, which is often referenced by the gambling sector.
During a recent session with the Treasury select committee, chair Meg Hillier highlighted the contradiction between the industry’s claims of financial vulnerability and its substantial advertising expenditures. She noted, “Unfortunately, the fact that we are told the existence of gambling firms is on a financial knife-edge while they simultaneously plough billions into advertising does not come as a surprise.” Hillier emphasized the need for the government to remain steadfast against the industry’s warnings of potential job losses stemming from tax increases.
Industry Perspectives
Labour MP Alex Ballinger also criticized the gambling sector, describing the £2 billion figure as an “astronomic sum.” He suggested that gambling firms should reconsider their advertising budgets rather than resist fair taxation, especially given the societal harms associated with gambling.
In contrast, industry analyst Alun Bowden from Eilers & Krejcik Gaming cautioned that a reduction in advertising could have negative repercussions. He warned that cutting marketing budgets could inadvertently empower illegal operators in the UK market, as they would gain an advantage over regulated firms. “If you reduce advertising spend significantly then you give more parity to black market operators,” he stated.
According to James McDonald, director of intelligence at WARC, the gambling sector has become a significant player in the advertising landscape, surpassing traditional industries such as automotive and cosmetics in recent years. He noted that while television advertising remains prominent, social media has become an integral part of the sector’s marketing strategy.
Amid these discussions, Will Prochaska, director of the Campaign to End Gambling Advertising, argued that the sector should be able to manage increased taxation by reducing advertising expenditures instead of laying off employees or limiting payouts.
A spokesperson from the BGC responded to the criticism, asserting that claims regarding the industry’s advertising spend are misleading. They maintained that the gambling sector’s advertising expenditure, excluding lotteries, is around £1 billion, which has seen a decline in recent years. The BGC also emphasized that 20% of all advertising is dedicated to safer gambling initiatives, reflecting a voluntary commitment by the industry.
As the government prepares for the budget announcement, the outcome of this debate could significantly impact the future of gambling regulation and taxation in the UK.
