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Mar
28th

UK Online Gambling Industry Gains 80%, Now Worth £2 Billion

While traditional industries in the UK struggle in a stagnant economy the internet gaming industry has experienced rapid growth. In 2012 the online gaming industry in the UK was worth over £2 billion. The figure represents an impressive 80% revenue increase from the £1.27 billion the industry generated in 2008. The internet gaming industry has also created thousands of living wage jobs.

Bookmaker William Hill is the country’s largest operator and has an impressive 15% market share. Other major players including Ladbrokes, Paddy Powers, Betfair and Bet365 have an 11% market share each. The largest online gaming sector is sportsbetting which represents 44% of the total gaming market. Since 2008 sportsbetting has grown by 108% and is now worth £1 billion. Online casinos are up 79% since 2008 followed by internet bingo which is up 155% and poker which only grew by 8%. Sportsbetting has a 44% market share, casinos 23%, bingo 17% and poker at 15%.

The figures may be impressive but the government estimates that it has lost about £2.1 billion in tax revenues since it decided to impose a 15% tax for operators licensed in the UK. The high taxes triggered a rush by gaming operators offshore and today about 2,500 companies have located offshore in more favorable tax jurisdictions. Recently the government announced it was considering a tax cut to lure operators back to the UK. Politicians have proposed a 10% to 15% reduction of the tax rates currently in effect. Hugh Robertson, the Minister for Sport & Tourism, told reporters “These proposals will ensure that British consumers enjoy consistent standards of protection, regardless of where a gambling business is based.”

Not everyone is happy with the proposed tax reductions and the impressive growth of internet gaming companies. Anti-gambling activists say they are alarmed by figures that show that over the past six years the number of gambling addicts has doubled to about 450,000. The figures also say that the average gambling addict has a debt load of £17,500. In addition to the tax cuts the government is also proposing a point of consumption tax that would eliminate most of the tax advantages now enjoyed by offshore gaming operators. Companies accepting wagers in the UK will also be required to obtain a license from the UK Gambling Commission.