Published: 02.04.2020, 0:35
4 min read
On Tuesday, March 17th, the UK Betting and Gaming Council (BGC) pressed the government to issue emergency assistance within the gambling sector. Because of the sweeping effects of COVID-19, thousands of UK citizens who work in the gambling industry are at risk of losing their jobs.
In its plea, the BGC stated that some casinos have seen a decrease of 90% and that sports betting is down by 60%. The council requested temporary government support so that payroll costs can be covered. Furthermore, it asked for tax relief and extensions on duty and tax payments. In addition to all of this, the BGC admonished the Treasury, stating that it needs to understand that insurance cannot cover the widespread effects of a pandemic such as the coronavirus.
- Coronavirus’ Drastic Effect on Sports Betting and Gambling Market
- Gambling Companies Share Prices Fall Amid Covid-19
The BGC also outlined how other countries’ governments are handling the impact of the pandemic on their national gambling industry. The council used Denmark, France, and Spain to illustrate their point.
To put things in perspective, major UK operators are facing losses upwards of £100 million each- for instance, Flutter Entertainment, GVC Holdings, and William Hill. These losses may increase further if major horse races are canceled and if betting shops shut their doors. GVC will be taking an additional loss by closing its Ladbrokes betting shops in the Republic of Ireland. The initial period of this action will last until March 29th, and may then be reevaluated.
Share prices are plummeting among pretty much every major UK land-based and online operator. William Hill, for example, saw its share prices drop by nearly 26.5% during the last close of trading. GVC shares are down by a bit over 12%. Flutter Entertainment, on the other hand, was lucky enough to only dip by 8%.
Details on the Government’s Financial Package
The same day that the BGC put out their request, the UK government announced a financial package that should hopefully help alleviate the burdens of the gambling industry. The BGC is greeting the package with slight trepidation and is hoping for a little more clarity on the details.
The financial package isn’t just aimed at the gaming sector; it’s instead aimed at all businesses in order to shore up the economy. Let’s take a closer look at what the package entails.
Chancellor Rishi Sunak announced that the lifeline package includes £330 billion in loans, as well as £20 billion in other financial aid. Furthermore, it includes alleviation for business tax rates and can provide grants for qualifying pubs and retailers. It is possible that a stipulation for airline assistance will be added to the package.
Besides this, Chancellor Sunak declared that if the economic need is great than what the package provides, he will increase the amount of financial assistance. He promised that he will do “whatever it takes” to support the economy.
The grants that small businesses receive will be between £10,000 and £25,000. Furthermore, mortgage lenders are going to suspend payments for three months for people who are in financial difficulty because of the pandemic. However, borrowers will have to make up the difference in the future; the amounts will be raised to account for missed interest payments.
The BGC’s Response to the Financial Package
After Chancellor Sunak’s briefing, Michael Dugher (the chief executive of the BGC) stated that the council appreciates the package but will be seeking additional clarity.
He added that he is disappointed that the package did not provide any direct support for employment costs. Furthermore, Dugher assured that the BGC will continue negotiations with the Department for Digital, Culture, Media, and Sport (DGMS), and the HM Treasury. The BGC will ensure that the UK government is well aware of the severe economic impact the pandemic is having on the gambling industry.
According to the BGC, it is of vast importance that the council receives the funds to cover payroll costs during this public health crisis. In a national emergency, the Treasury simply must support the employees of the hospitality, entertainment, and leisure sectors. They cannot simply let people “hang out to dry”, so to speak.
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An Update to the Situation
On March 20th, the UK government announced that it will help cover the wages of employees who have been impacted by the pandemic. Non-profit companies, as well as firms of any size, may apply for government assistance. If approved, they will receive a grant that covers up to 80% of their employees’ salaries – with a limit of £2500 per employee, per month.
Chancellor Sunak stated that these payments will cover previous checks up to March 1st and will be available for approximately three months. He did not give details as to whether this plan could be suspended.
The chancellor also revealed a couple more new measures. Sales tax payments will be suspended for the next fiscal quarter. For the next 12 months, welfare allowances will be increased by £1,000 per annum.
Furthermore, the government has pledged £1 billion to increase housing aid in order to help people who cannot pay their rent.
