Gambling operators in the UK experienced a sharp downturn in their stock prices this week after a British Medical Journal called for a gambling law overhaul. The journal suggested a mandatory levy on gambling companies that could be used for treatment gambling-related issues.
The Journal called on the UK government to make more stringent changes to the country’s gambling laws. It asked the authorities to introduce a new mandatory levy on digital operators that could be used to treat gambling addiction and related harm. Currently, the operators are paying a voluntary levy which has proved to be insufficient to make any real societal changes.
As soon as the report went public, the share prices of all major gambling companies including GVC Holdings, William Hill and Paddy Power Betfair dropped. If the mandatory levy is introduced, the profits of these companies will be significantly impacted. However, the BMJ report argues that the economic cost of problem gambling could be severely understated. The authors of the report included academics from the UK and Australia. They found a significant link between problem gambling and suicides.
With a new gambling act, the industry will be forced to focus on the problems caused by their practices. Currently, an estimated 430,000 people are struggling with a gambling addiction in the UK. Despite the issues, the country only has one NHS treatment center dedicated to gambling addiction. A second treatment center was expected to open in April, but that launch has been delayed. The government has promised to open more treatment centers, but there hasn’t been much profound work done in that sector.
Funding for problem gambling treatment is already in short supply. Last year, the government spent just £1.1 million on gambling addiction treatment. This means that the government spent a measly £0.02 per capita. On the other hand, New Zealand spent about $9.5 million during this period, with 100x more per capita spending than the UK.
Clearly, the 0.1% voluntary levy on gambling companies is not working in favor of gambling addicts. According to the full year financial results, gambling companies earned £14.4 billion in revenues. Their contribution to gambling addiction treatment should have been £14.4 million. However, GambleAware, the charity that receives funds via this voluntary levy, couldn’t even get £10 million.
The UK Gambling Commission and Labour Party support the idea of a mandatory levy and believe that it could generate about £60 million in additional funding each year.