Tougher affordability checks are beginning to put pressure on regulated online gambling revenue, according to a report by Ernst & Young for the Betting and Gaming Council (BGC).
The research, commissioned by the BGC, found that nearly 70 percent of people who place a bet said they would be unwilling to allow regulated firms to carry out compulsory affordability checks to see if they have sufficient funds to gamble.
“Online GGY has declined since mid-2021, probably reflecting the re-opening of physical venues, the introduction of affordability checks online, and the decline in real household incomes,” the report said.
The EY study, said these pressures, “could in turn lead to leakage to the black market, i.e. operators offering remote (mainly desktop and mobile) gambling products that do not hold a UK Gambling Commission license for remote gambling.”
The industry in the U.K. is waiting for a long-delayed white paper that will set out new rules for the sector. That report is expected to be produced within weeks and there is concern that some of the measures will hit the competitiveness of regulated firms. In expectation of government limits on spending, BGC members have already started applying more stringent checks, which are hitting revenues.
BGC warns of black market gambling
The BGC said that countries in Europe that have imposed tougher rules on online gambling, including blanket affordability checks, have seen a rise in black market betting.
It said in Norway, the black market is thought to make up about two thirds of all money wagered, while in France it’s 57 percent and Italy 23 percent.
“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,” BGC CEO Michael Dugher said in a statement. “Our members pump billions into the economy, support the Treasury with more billions and support over one hundred thousand jobs.
“But this contribution is never guaranteed. This industry needs to thrive if it is to maintain its status as a global leader.
“As ministers consider the regulatory framework for this industry, they should stop and think, and ensure the decisions they make support a sustainable future.
The gambling industry contributes GBP4.2 billion to the Treasury annually. It supports 110,000 jobs either on the High Street, or through hospitality, or global tech firms.