UK gambling firms spent ‘astronomic’ £2bn on advertising last year | Gambling

British gambling companies spent an “astronomical” £2bn on advertising and marketing last year, according to a new estimate, intensifying the Chancellor’s calls to increase taxes on the industry.

Bookmakers, online casinos and slot machine companies spent the sum through print and digital promotions, as well as affiliate programs where third parties are paid to refer gamblers to specific operators for a fee.

The figure, produced by leading media analysis group WARC, far dwarfs the £1.2bn the Treasury collected from online casino companies last year.

Media industry sources said the total amount spent on gambling advertising was likely to be hundreds of millions of pounds higher as it was difficult to accurately measure the true amount of digital marketing spend.

This means the real figure could be close to or even higher than the £2.5 billion raised last year due to the three main taxes the industry pays, which include taxes on slot machines and sports betting.

Chancellor Rachel Reeves is under pressure from think tanks, MPs and former prime minister Gordon Brown to increase these duties in Wednesday’s budget as she seeks to raise funds to shore up troubled public finances.

The Betting and Gaming Council (BGC), an industry group that has lobbied heavily against such a move, disputed WARC’s estimate, claiming advertising spend in the industry was close to £1bn.

This estimate is significantly less than the 2018 figure of £1.5bn given by Regulus Partners, a consultancy favored by the gambling industry.

The high forecast has fueled calls to ignore industry warnings about the potential impact of the tax increase, as Reeves considers whether to raise gambling taxes and by how much.

Meg Hillier, chair of the Treasury’s influential select committee, said the industry’s spending undermined lobbyists’ claims that tax rises could have devastating consequences on jobs and growth in occasionally tense evidence sessions with her committee.

He said: “Unfortunately, it comes as no surprise that we are told that the existence of gambling firms is on a financial edge and that they also pour billions of dollars into advertising.

“During our session with the BGC, we were warned that any increase in gambling taxes could lead to 40,000 job losses.

“It is important that the government does not give in to fear-mongering in this sector.”

Labor MP Alex Ballinger, who has campaigned for tighter regulation and taxation of gambling companies, said the £2bn figure was an “astronomical amount”.

“Perhaps gambling firms should consider reducing the advertising that no one wants to see, before turning against paying fair taxes on their huge profits, especially given the damage they cause,” he said.

However, leading gambling industry analyst Alun Bowden of Eilers & Krejcik Gaming said any reduction in advertising spend could have unintended consequences and help illegal operators gain a greater foothold in the UK market.

“Marketing spend is the main way to reduce costs and will be the first thing to be cut [if taxes rise]“But there is a reason for the marketing spend in the first place,” he said.

“If you significantly reduce ad spend, you give greater equity to black market operators who are increasingly spending more on SEO [search engine optimistation]affiliates, publishers and social media.

WARC intelligence director James McDonald said: “The gambling industry has become a major force in the advertising market in recent years, spending more than industry heavyweights such as automotive and cosmetics.”

“While TV spending is the main focus, social media platforms also form the basis of the industry’s marketing strategy.”

Will Prochaska, director of the Campaign to End Gambling Advertising, said: “It’s conceivable that if the industry was asked to pay a bit more tax in the upcoming budget they might cut advertising spend rather than sack all their staff in betting shops or further reduce what they pay out to customers, but that’s a choice for them.”

A BGC spokesman said: “These claims are misleading because the betting and gaming industry spend on advertising, excluding lotteries, is around £1bn and has actually fallen in recent years.

“Importantly, 20% of all broadcast and digital advertising is dedicated entirely to safer gambling messages – a voluntary commitment from the UK industry.

“Further tax increases will divert more consumers to a growing black market that offers age checks, safer gambling tools and no tax contribution, while undermining advertising spending that differentiates the regulated market, which supports more than 11,000 jobs, contributes £506 million to the UK economy and provides £138 million a year to British sport through sponsorship.”