There is an ill-considered aspect to the economic practice of assessing all service businesses to be of positive value. Of crucial importance at the moment is government estimates that suggest a reduction from £100 to £2 per spin at bookies’ fixed-odds betting terminals (FOBTs) could lead to a £5.5bn loss in tax revenues over the next 10 years.
The gambling business is basically to act as an intermediary passing money from the hapless punter to the taxman, extracting a large commission for itself. There is nothing in the process that creates additional value to tax. It can be argued the money has considerably less value after the bookies take their cut. There is never any worthwhile outcome for the gambler and their families (quite the reverse).
The government is using the tax revenue from gambling as a means – a currency conduit – to tax the real pool of value produced by genuine wealth creators elsewhere.
Economists do not appear to understand that you cannot fund beneficial public services from the taxation of empty services. Governments do, but it is an illusion.
Geoff Naylor
