Betting, online casinos and gambling: a tax on poverty

“It is a strange feeling, similar to alcohol, food or drug addiction; the behaviour is different, but what you feel is very similar”, “If you don’t stop, there are only three possibilities: prison, madness or death”.  Vasile is a 34-year-old Romanian citizen, whose testimony is reported by Lola García-Ajofrín in El Confidencial, in an article produced with the Pulse network.

“Romania’s gambling problem”, ran a Politico headline in 2016. The first gambling hall was opened in Bucharest in 1990, a few months after Ceaușescu’s death and the end of the regime which, like most former Soviet bloc countries, had banned gambling.

Today, the Romanian government has prepared a bill that would ban gambling advertising, though the bill is currently stalled in parliament, as Iulia Roșu reports in HotNews. Since last May, gambling halls can no longer be opened in municipalities with fewer than 15,000 inhabitants. Moreover, in 2023, the government increased taxes for gambling companies and banned the sale of alcohol in the gambling halls.

Neighbouring Bulgaria has the same problem, explains Tsvetelina Sokolova on Mediapool, in an article that is part of the same Pulse investigation: since May 2024 gambling advertising has been banned in all media, with the exception of the state lottery, which must use the proceeds to finance Bulgarian sport. In municipalities with fewer than 10,000 inhabitants, gambling halls are also banned.

The industry has been able to flourish in the country since 2015 thanks to massive investment from Vasil Bozhkov, the country’s largest gambling entrepreneur, who started his business illegally in the 80s. “Within 4-5 years, hundreds of thousands of people started scratching lottery tickets, and private lotteries reached an annual turnover of 700 million euro,” Roșu writes.

Bozhkov’s reign imploded in 2020, when he fled to Dubai after the Bulgarian tax authorities demanded 250 million euro in evaded taxes. There he founded a party called “Bulgarian Summer”, only to return to Bulgaria in 2023 and be arrested on charges of corruption and relations with the Russian mercenary group Wagner…. But that’s another story, told by Svetoslav Todorov in Balkan Insight.

Meanwhile, the Bulgarian state has nationalised the Bozhkov’s properties and the number of halls has only increased. The new Bulgarian advertising ban is welcomed by the public, but has met with opposition from the major television networks and digital media. Why? Betting-related advertising generates between 20 and 30 percent of the media’s total advertising revenue. Figures from 2023, cited by Mediapool, show that gambling companies spent 85 million euro on advertising. Many who work within the broadcasters in question argue that this law could undermine journalism itself, because this money has played a key role in their economic models.

Returning to the HotNews article, during the second half of 2023, Romanian journalists were fired or resigned from Gazeta Sporturilor and Libertatea after they accused the Ringier Sports Media Group (which owns the two titles) of trying to interfere in investigations dealing with betting. A report by the International Press Institute (IPI) provides analysis.

According to the European Gaming and Betting Association (EGBA), gambling in Europe (the EU 27 plus the UK) generated 108.5 billion euro in gross revenue in 2022 (of which 38.2 billion came from online betting), an increase of 8 percent compared to 2019 (pre-Covid) and 23 percent compared to 2021. As the association explains, this was due to the gambling halls reopening after the pandemic.

As reported in El Confidencial, EGBA also estimates that between 0.3 and 6.4 per cent of European adults suffer from compulsive gambling-related pathologies.

A tax on poverty 

Gambling also has people talking in France, where the new (very right-wing) government has proposed, as part of new budgetary measures, to legalise online casinos in order to recover part of the revenue in taxes. Except for Cyprus, France is the only EU country where such casinos (which include blackjack and roulette) are illegal.

The amendment is currently frozen due to protests from casino operators (there are around 200 in the territory) and addiction associations that consider online gambling a higher risk for addiction. According to the National Gaming Authority (ANJ), three million French people played online illegally in 2023.

In Le Monde, Stéphane Troussel (president of the French department of Seine-Saint-Denis, where I live) and Fatiha Keloua-Hachi (a French socialist deputy) who have proposed that the money collected from sports betting could finance sport, have entered the fray with a text that I find particularly compelling, and whose scope goes far beyond France: “Whether we talk about over-indebtedness, the risk of losing one’s job or the psychological and physical consequences such as depression, isolation or the risk of suicide… we are told that this problem only affects a minority of ‘excessive’ gamblers. But it is precisely these gamblers who drive the growth of the sector and line the pockets of the operators”.

In France, “40 percent of gambling revenue comes from people with excessive gambling habits. Worse, sports betting addiction acts as a genuine wealth tax on the poor’. Less affluent gamblers spend two and a half times more of their budget on gambling than other households, and are at higher risk of addiction”. Keloua-Hachi and Troussel also remind us that “Gross gambling revenue (i.e. stakes pocketed by operators) has increased by more than 200 percent since 2017, reaching 1.4 billion euro in 2023”.

In Italy, Il Fatto Quotidiano reports, a new budgetary measure authorises the drawing of lotto numbers on Fridays, a day on which it would not normally take place. Why? In part, to finance the National Emergency Fund, the lawmakers say. Who then pays for the emergencies?

In the weekly Vita, Ilaria Dioguardi interviews the sociologist Maurizio Fiasco, president of the Association for the study of gambling and risk behaviour. Fiasco explains that this new law, if it is passed, will put an end to the Gambling Observatory and establish a more generic Observatory for addiction pathologies: “It signals that a real emergency is being deprioritised. The gross volume of gambling in Italy this year will break 150 billion euro. This is an abnormal phenomenon, which is going to be obscured in the catalogue of other addictions”.

The Mettiamoci in Gioco campaign, which brings together civil society actors that include trade unions, Catholic and anti-Mafia associations, argues that “the measures in this manoeuvre seem to confirm the subordination of governments to the interests of the gambling lobby, showing no concern for the rights and needs of citizens or even the interests of the State”. A study by the Italian National Centre for Research on addiction estimates that 800,000 Italians have a moderate or severe risk profile for addiction, especially among working classes.