Spending on gambling

Polly Toynbee says:

Gambling's turnover has soared sevenfold, from £7bn in 2001 to £50bn last year. That ought to worry any government, but apparently not this one.

£50bn is indeed a shocking sum. It's more than people spent on clothing and footwear last year (£44.6bn according to table E1 of this pdf). And this should set alarm bells ringing. Maybe the £50bn is not true.
Official figures - table 09.CS of this pdf - show that spending on gambling increased from £7bn in 2001 to just £8.9bn in 2005.
Why the difference? These figures show net spending on gambling - stakes minus winnings. Polly is (I guess) referring to the gross figure - just stakes; the nearest thing I can find to her claim is a quote here from Leighton Vaughan Williams.
But does the gross figure matter? I think not. Put it this way. If you and I bet £10 on the toss of a coin, gambling turnover is £20, even though we are - over time - just swapping money; what goes around comes around. And this is what a lot of the alleged £50bn is - it's activity on betting exchanges, where people bet against each other rather than the bookies. This is mostly just City boys swapping money.
If you want an indication of the social problem caused by gambling, the best measure is what households in aggregate lose. And that's the net figure of £8.9bn.
Is this a lot? Well, it compares to spending of £28.2bn on alcohol. It's just 1.2% of total consumer spending. And it has risen 27.7% since 2001, against a rise of 19.3% in consumer spending generally.
By all means, Polly, complain that some irresponsible people are depriving their children by gambling their money away. But don't pretend it's a bigger problem than it is.

Comments

[Matthew]

The figures are correct, and your argument seems right too - I'd add that the National Lottery is the large single component of the "gross gaming yield", ie the actual expenditure, see p.5 of this http://www.culture.gov.uk/NR/rdonlyres/F006D42C-0B6A-4414-BB55-B56222C7C57A/0/gamblingreviewchapter5.pdf

On the other hand just because "gross gaming yield" is so much lower than "turnover" it doesn't necessarily mean the "turnover" figure is not relevant - as Wayne Rooney will tell you the winnings often don't go to the same people who lost it.