British Gambling: A Regulated Market In Crisis

Great Britain has one of the most established regulated online gambling markets in the world and yet, events from the past two years are tipping the scale. The UK government continues to drag their heels with the gambling reform white paper and, amidst the uncertainty, punters turn to risky offshore providers.

A recent study performed for the Betting and Gaming Council by PricewaterhouseCoopers revealed documented risks involved in harsh regulations. Findings reveal a parallel between tighter statutes and increased black market gambling.

The NHS argues that the recent move away from using gambling funds, from GambleAware, for the treatment of gambling addiction is a step in the right direction.

 No More Addiction Support from Gambling Funds

The United Kingdom’s national health program recently announced the termination of gambling industry revenue to support addiction programs. Research shows that patients and health care providers believe there is a conflict of interest in receiving funds from the source of harm. According to the NHS, this shift away from gambling-related funds comes at a time of increased demand for specialised gambling addiction support.

NHS Mental Health Director Claire Murdoch announced that two new clinics specialising in the treatment of gambling-related mental health issues will open in Stoke-on-Trent and Southampton. These form part of their £2.3bn investment into mental health services. Gambling addiction support will receive independent funding from the NHS, which claims gambling sector funds were ineffective.

Location targeted plans take shape with the clinics strategically placed in areas with the highest recorded prevalence of at-risk gamblers. According to the NHS, the number of gamblers seeking help increased by 16.2% in 2021.

 Regulatory Uncertainty Fuels Black Market

In anticipation of the upcoming gambling review, the Betting and Gaming Council employed PWC to study industry trends on illegal gambling. Shocking findings indicate that harsher gambling laws directly influence where punters choose to wager. Tighter regulations in European countries caused massive scale black market gambling.

Concerningly, the number of UK gamblers who play on unlicensed sites increased twofold since 2020. Billions of pounds flow out of the country and although 220,000 Brits used offshore sites in 2020, current numbers amount to 460,000.

The government announced a white paper on updating the Gambling Act of 2005 and almost two years later, they still need to produce the gambling reform. Headlines had British gamblers up in arms when legislators proposed blanket affordability checks and the political seesaw of late fuels concerns.

PWC’s study focused on European regulated markets like Norway, France, Italy, Spain, Denmark, and Sweden. Following the outcome, BCG urges the UK government to consider reforms suited to targeted groups, particularly vulnerable players.

 Britain’s Ace in the Hole

Starting from experience and outcomes from other markets puts the UK government and lawmakers responsible for the reform in a fortunate position. If they choose to approach the reform from a place of logic. The PWC study revealed that Norway’s state monopoly, combined with their wager limits, affordability checks, and advertising restrictions, led to a 66% market share for black market providers.

These numbers equate to three times the number of black-market players in 2010. Another country where state monopoly reigns and most of their players frequent offshore sites in France. Since 2015 French black-market revenues doubled and today 57% of their players wager offshore.

Jurisdictions with stricter gambling laws also have higher rates of problem gambling. In France, their numbers doubled since 2014 from 0.8% to 1.6%. Despite outdated gambling laws, the UK decreased their rates of problematic gambling from 0.6% to 0.3%, according to a recent UKGC report.

Only time will tell whether lawmakers apply the wisdom at their disposal, but one thing is clear; they need to move swiftly to avoid further industry deterioration.