UK’s Gambling White Paper Could Lead To Over $1.3B in Annual Losses

The UK missed another deadline to present its new gambling white paper last month, but the government seems to be zeroing in on the final product. There have been a lot of rumors about what could be included, although a source with more knowledge than anyone recently asserted that the changes could lead to nine-figure losses for the industry.

British MP Lucy Frazer as she goes about her daily duties
British MP Lucy Frazer as she goes about her daily duties. She is leading the reforms in the gambling white paper, which could arrive this month. (Image: Getty Images)

Information compiled by The Sun indicates a good chance the white paper will arrive by the end of this month. When it does, it could include modifications to gambling activity that could cause a drop in gross gambling yield (GGY) of 3-8%.

This is according to a letter drafted by Lucy Frazer, the latest Secretary of State for Culture, Media and Sport. The government department is leading the gambling reforms, and Frazer’s words equate to GGY losses of as much as £1.1 billion (US$1.35 billion).

A New Questionable Era of British Gambling

The $1.35 billion figure holds up only when factoring in all gambling spend, including lotteries. Statista data shows that lottery products have the highest GGY among all available gambling options.

Frazer reportedly wrote that the “societal benefits” of the cuts, which target gambling harm, outweigh the loss of revenue. In the history of free enterprise, however, businesses that begin to lose significant amounts of money always look elsewhere and anywhere to make up the difference.

Frazer added that much of the decline in online gaming revenue will only be the result of people who can’t afford to gamble reducing their activity. Anti-gambling pundits repeatedly argue that the majority of gamblers come from the lower-income economic brackets.

However, a report by Public Health England asserts that “income [and other factors] were shown not to be statistically significantly associated with harmful gambling.” In addition, it states that “demographic factors, particularly sex, appear more significant in predicting at-risk gambling behaviour than economic factors such as income, employment, and relative deprivation.”

These facts aren’t stopping the changes that are coming. The UK seems determined to reduce the “problem gambling” rate to zero, even though it has hovered around 0.2% with operator-led efforts for years.

The changes that the final version of the white paper will include remain uncertain, but there may be a silver lining for the industry. When Member of Parliament Scott Benton was caught red-handed trading political influence for money, he allegedly spilled a secret.

Benton said that the removal of former Gambling Minister Chris Philp was a good omen for the gaming space. It created a path that would allow the industry to get “the vast majority of what [it] wanted” with the reforms.

Horse Racing Reform In The Wings?

Another rumor that has begun to circulate focuses on the UK’s horse racing segment, one of the most popular and successful in the world. Racing Post explained that new forms might help secure “proper funding” for the sport, but this might hide a dark secret.

The funding could come by way of a new tax, a proposal horse racing leaders welcome. At the same time, though, some of the changes coming to the gambling industry, such as affordability checks, could also hit the horse racing segment. This, in turn, could cause its GGY to drop, as well.

The bottom line, for now, is that no one knows for sure what the new white paper will bring. It appears, based on the rumors, that the changes are not as drastic as the anti-gambling lobbyists would like. However, no industry would take lightly an economic loss of over $1.3 billion a year.

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