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A new economic study says proposed gambling reforms in Britain would likely cause far less damage to the wider economy than industry groups have repeatedly warned.
The research was conducted by the National Institute of Economic and Social Research and the University of Glasgow. It examined measures included in the government’s 2023 white paper, High Stakes: Gambling Reform for the Digital Age. Those proposals are expected to cut Gross Gambling Yield (GGY) by as much as £812 million annually. GGY measures the money gambling operators keep after paying winnings.
Researchers estimated the broader economic hit from that decline would total about £134 million, or roughly 16 percent of the expected reduction in gambling revenue.
Our analysis shows that of a projected £812 million reduction in GGY, £134 million—around 16 per cent of the total reduction—is translated into a net negative economic impact on the UK economy,” the report said.
How gamblers would redirect their spending
The study found that most consumers would not simply stop spending money altogether if gambling activity fell. Instead, many would redirect cash toward ordinary household costs, including groceries, housing, savings and debt repayments.
More than 800 regular gamblers participated in the project. Researchers asked them to imagine their monthly gambling budgets dropping from £100 to £50 because of tougher regulations. Participants then selected how they would use the remaining money.
Food, drinks, shopping, leisure spending and savings ranked among the most common alternatives. The researchers argued that this shift in spending would soften any broader economic losses associated with gambling restrictions.
“Consumer spending reallocation significantly mitigates the economic impact of gambling sector losses,” the study stated.
Debate over financial risk checks intensifies
The findings arrive during an increasingly heated debate over gambling regulation in Britain. Earlier this year, adviser James Noyes urged the government to pause its pilot program for financial risk checks until more evidence from ongoing testing becomes available. Industry groups have argued the checks could push some customers away from licensed operators.
The report also explored concerns that gamblers might move to unlicensed websites if stricter rules are introduced. Researchers found that 73 percent of respondents said they would avoid unlicensed operators entirely, while about 8 percent consistently selected illegal gambling options during hypothetical exercises.
When that possibility was included in the modeling, the estimated economic loss increased to roughly £189 million, or 23 percent of the projected decline in gambling yield.
Gambling sector faces growing regulatory pressure
Pressure on the sector has already intensified after Entain recently warned that higher gambling taxes and regulatory changes contributed to a £681 million quarterly loss. Still, the new study argued that online gambling businesses often create weaker economic links inside Britain than land-based venues, meaning some industry forecasts may exaggerate potential national losses.
Researchers cautioned that the analysis relied on hypothetical consumer behavior rather than observed spending patterns. Even so, they said the findings offer a stronger evidence base for judging the real economic effects of gambling reform.
Featured image: Scott Graham/Unsplash
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