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Ernst & Young report that compulsory affordability checks affect UK betting and gaming industry

Posted on 14/12/2022

After a recent study showed that affordability checks imposed by Government are already affecting revenues, Britain’s regulated betting and gaming sector has called on Government to publish a White Paper and set new laws for the gambling industry in the jurisdiction.

Affordability checks reduce revenues:

The research conducted by Ernst & Young (EY) for the Betting and Gaming Council (BGC) confirmed that the sector remained stable despite the pandemic. The sector now mitigates the energy and inflation crisis, the study said, but also argued that the enforcement of tougher affordability checks of the regulated market has reduced revenues.

The research is based on a recent poll showing that around 70 percent of bettors would not allow regulated companies to demand proof of their affordability to place a bet. EY also indicated that despite the pressure induced by the measure on all BGC members, their total gross value-added tax contribution to the British economy amounted to £7.1 bn ($8.7 bn).

Significant contribution:

The report showed that annual contribution to the Treasury from the regulated betting and gaming sector remained at £4.2bn ($5.2bn), with the industry securing 110,000 jobs.

CEO of the Betting and Gaming Council, Michael Dugher, said: “The UK’s regulated betting and gaming sector is a genuine global leader. Some 22.5m adults enjoy a wager, on the lottery, on bingo, on any number of sports, online and in casinos. Our members pump billions into the economy, support the Treasury with more billions, and support over one hundred thousand jobs.”

Dugher continued: “But this contribution is never guaranteed. This industry needs to thrive if it is to maintain its status as a global leader. We urge the Government to find an evidence-led, balanced White Paper that protects the vulnerable, allows the vast majority who bet safely to continue to do so, and crucially allows business to thrive.”

In expectation of the new White Paper setting out new laws for the gambling industry, Betting and Gaming Council members have already started applying the legislature despite the downfall in revenues caused by the measure.

Black market leak:

The EY  study warned that the pressure driven by affordability checks, “could, in turn, lead to leakage to the black market,” based on the fact that European countries applying tough sanctions on betting have witnessed an increase in black market wagering.

For example, Norway’s black market covers more than 66 percent of all wagers, while 57 percent of French and 23 percent of Italian bets are placed with non-regulated sites. Therefore BGC has urged the Government to review gambling laws and provide new regulations to support the future growth of the industry.

Dugher stated: “This industry is serious about safer gambling, and it’s encouraging that the rates of problem gambling among UK adults remain low by international standards at 0.3 percent. But without Government clarity on affordability checks, our members are concerned they are driving frustrated customers to the unsafe, unregulated black market.”

The Government has promised a White Paper drafting review of current gambling legislation in a few weeks.

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