The new gambling tax is getting higher on the agenda. Here’s how it can be implemented

Gambling has become a hot issue during this year’s UK Conservative Party leadership election after minister of health Matt Hancock called for a PS100 million-plus annual tax on betting firms. If elected premier, Hancock said he intends to apply a tax of 1% on the earnings of these companies to fund treatment and studies into this field.

Labour has also been calling for this policy and an overhaul of the UK Gambling Act. The party has called gambling an “hidden epidemic”, and the deputy chief Tom Watson has promised that it will introduce a mandatory tax on gambling in the event of a government election.

It’s great to have this issue addressed by politicians who are on the frontline. However, imposing a levy is one thing, but spending it prudently is another to visit our site: For the vast majority of victims of gambling-related harms it is crucial to do this the right way.

The ripple effect

There are approximately 340,000 problematic gambling addicts across the UK as well as more than half a million people in moderate danger due to the growing commercial range of goods, including electronic gaming machines as well as games that are played on websites.

The negative effects of gambling problems extend to families community members, communities and the society at large. In addition to financial difficulties there are also breakups in relationships, neglect or abuse of children and parents or, in more extreme instances suicide, with the associated burdens on health and social services.

For every person who has difficulties, it’s believed that 5-10 others are affected. Cost estimates for the UK alone vary between PS200m up to PS1.2 billion annually. According to the Faculty of Public Health has declared this to be an “serious and worsening public health issue”.

In Australia in a country where evidence-based practice is more established and the burden of harms to health and well-being is believed to be similar to that of the harms caused by alcohol. From an economic standpoint the cost to society is more to ignore the harms rather than tackle these issues.

In the past, in Australia’s state of Victoria as an example the total tax revenue generated in the form of betting totaled AU$1.6 billion (PS874m) and estimated social costs were estimated at AU$7 billion, which was a net loss in the amount of AU$5.4 billion.

The gap in funding

In the UK the current method of funding research, education, and the treatment of gambling-related harms is based on the voluntary contributions of industry to a charity, GambleAware. It is often the case that GambleAware is unable to meet its goals of contributions of only 0.1 percent of the amount which the industry receives after bets have been made and is referred to as gross yield. This is about PS10m in contributions to an industry that’s gross gambling revenue is more than PS14 billion. In this case it is clear that an PS100m annual levy would surely make a significant impact.

While Hancock’s promise to support research and treatment are welcomed, he makes the no-where any mentions of prevention. This is a shame, as any effort to limit gambling-related harms must consider the causes and not just effects. The fact that prevention is superior to cure is well-known across various other areas in public health. This is also part of the social justice issue as people who are affected by gambling tend to be poorer than those who live in the poorest regions.

The UK for 2017-18, amount spent through GambleAware in prevention of gambling was lower than PS1.5m that is around 2p per head. Compare this with a country which treats gambling as a health issue for the public such as New Zealand, for instance in which harm-reduction is an official lawful obligation and the total annual expenditure for prevention exceeds than 18 million dollars (PS9.3m) for the total population in the range of 4.7 million. This is 99 times more per habitant than the UK.

Prevention requires legislation to curb advertising, especially the personalized advertising that we see through social media. We must be more vigilant regarding promotions and incentives like special offers or “free” bets, and end the use of credit cards online.

We require stricter rules on the creation and use of gambling products. This was recently done with high-stakes machines, however betting companies have already found ways to circumvent these regulations with different types of machines.

Prevention is also about identifying those who are in danger. This kind of strategy is not well-developed in the field of gambling, and we have to fund research in order to determine what works for whom , and under what conditions. It is also important to be promoted by health promotion campaigns to raise awareness.

Optimizing the system

There are other crucial aspects to be considered. First, the funds from a levy must be secured. Experiments from other jurisdictions, like Ontario, Canada shows that in the event that funds aren’t properly ringfenced, the funds could be taken up by the national healthcare budgets. There have been precedents for similar things in the UK as all the funds of the sugar tax are devoted to sports at schools for example, and in the coming year, the bulk portion of Highways England budget will be protected by the road duty.

Treatment, prevention and education All of these must be based in solid and trustworthy research. One possibility is to channel funds by leveraging the infrastructure and expertise of research councils for independent academics like the Economic and Social Research Council and the Medical Research Council.

Another possibility is to use department of health and social care’s effective model of research units. This can help in producing rapid evidence that keeps pace with the rapid pace of how gambling technology is evolving.

Then, we must reform the system by the way that gambling for profit is controlled. This could mean a brand new act on gambling which is focused on protecting public health and not encouraging gambling as a pastime. This is much overdue.

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