As a visitor to London, one of the first things you notice is the plethora of betting shops. They’re everywhere. You can’t walk a city block without passing at least one bookmaker. Gambling is 100% legal in the UK and placing a bet is as easy as buying a quart of milk. What a refreshing contrast to the draconian treatment of betting we endure across the pond. But it’s not just the law that’s different over here. There’s a completely different gambling culture. The key distinction is not that gambling is legal, but that it’s socially acceptable. Betting is seen as a perfectly normal human activity, not a shameful, unspeakable act done secretly by the dregs of society. In fact, the Brits are very much a nation of bettors (or ‘punters’ as they would say). Pick up a newspaper and you’ll find sportswriters talking about bizarre things like ‘odds’ and ‘value.’ Watch a soccer game on TV and you’ll notice the announcer mentioning the odds more than a few times. Gambling has permeated the society to such a degree that people use expressions like ‘odds-on’, ‘one horse race’, and ‘bookie’s fave’ when referring to situations in everyday life that have nothing to do with betting. If two people are having an argument, it doesn’t take long for one of them to suggest a friendly wager to settle the dispute. The Brits bet on anything and everything imaginable: reality TV shows, politics, and even the weather. Ridiculous Superbowl-style props are common every weekend of the year for soccer matches. For example, you can bet on the total produced by adding together the shirt numbers of the all the goal scorers in a game. (Don’t ask)
Gambling is just one of many areas where the British are more tolerant. The whole Nipplegate fiasco was met with confusion at first and then laughter at how uptight America is about stuff like this. In Britain you can see nipples on prime time TV, in mainstream magazines, and even on page 3 of the daily newspaper. They know it’s harmless, and that’s why the Brits allow it - and the same is true of gambling. On our side of the Atlantic we can buy lottery tickets, play the stock market, even visit the odd casino - all of which are risky activities that can be called ‘gambling.’ But we can’t wager on sports. We are allowed to smoke cigarettes and drink alcohol - activities that can kill if taken to excess - but we can’t be trusted to place a wager on a football game. . . OK, OK, I’m preaching to the converted, but let’s take a look at how we’d benefit from a legalized and regulated betting industry.
Sports betting is an $80 billion industry in the UK and employs thousands of people in betting shops, call centres and racecourses across the country. As a bettor, you can take comfort knowing that the biggest bookmakers have been in business for decades. The UK betting and gaming industry is regulated by some of the strictest gambling legislation in the world. There’s absolutely no reason to worry about payouts. And if you’re a professional, you don’t have to worry about your account being closed or stakes being limited: just walk into a different betting shop and wager anonymously.
But legalization is often not enough. A healthy betting industry needs sensible regulation to succeed. Until recently, British bettors had to pay a sales tax of 6.75% on their total stakes. So a $110 football bet with standard juice becomes $117.43. Since the vast majority of bettors lose money in the long run, it’s hardly fair to tax them on top of that. Recognizing this problem, the regulatory authority introduced the Gross Profits Tax in 2001 to reform taxation of the betting industry. The 6.75% betting tax was replaced by a 15% tax on bookmakers gross profits. This had a revolutionary effect on the industry because bettors could now wager tax-free. Sports betting increased by 20% and thousands of new jobs were created. Under the old system, British books found it hard to compete with the hundreds of tax-free offshore sportsbooks, so they started offshore operations of their own in places like Gibraltar. After tax reforms were implemented they moved back to Britain and billions of dollars were injected into the UK economy. There are many lessons to be learned from the British experience with sports betting. Politicians in North America would be better off studying the reality of legalized betting before decrying it as unethical, unviable and undesirable.
