The 2023 white paper forecasted an annual reduction in industry gross gambling yield of between £329 million and £812 million. New research estimated only about £134 million would actually be lost.
A recent joint study revealed that tighter gambling reforms in the UK could lead to only modest economic loss, as consumer spending shifts mitigate the impact of reduced gambling revenues.
The study, by the National Institute of Economic and Social Research (NIESR) and the University of Glasgow, analysed the potential macroeconomic consequences of the UK government’s proposed 2023 white paper reforms aimed at reducing gross gambling yield (GGY).
The 2023 white paper forecasted an annual reduction in industry GGY of between £329 million and £812 million. This was largely targeting the online gambling sector.
The NIESR-Glasgow research team applied the upper-end estimate of an £812 million loss to model aggregate economic effects.
The investigation combined three core methodologies:
Survey of regular gamblers: An initial probability survey of 1,320 regular gamblers informed the subsequent experiment design.
Stated-Preference Discrete Choice Experiment (SPDCE): Fielded between May and June 2025, 804 gamblers stated how they would reallocate a hypothetical £50 monthly budget freed from gambling spend across seven broad expenditure categories.
Input-Output (IO) economic modelling: Using 2022 UK IO tables, researchers estimated direct and indirect sectoral impacts from spending shifts.
The study did not quantify potential health, wellbeing, productivity improvements or supply-side effects from reduced gambling harms, which could further positively influence economic outcomes.
Net loss only a sixth of white paper prediction
Through their investigation, the team estimated that only about £134 million, approximately 16% of the gross £812 million reduction, translated into a net loss in UK output after accounting for consumer spending shifts.
The most common reallocations of spending were towards essential consumption categories. This included food, drink, everyday shopping, home and personal items, and increased saving or debt repayment.
If some consumers shift spending towards unregulated or black market gambling, net losses increase significantly. An 8% diversion to unlicensed gambling raises the net loss to £189 million (23% of the gross loss), whereas a substantial 27% diversion pushes this to £317 million (39% of gross).
Online gambling, which dominates the sector’s GGY, has lower domestic economic multipliers due to offshore supply chains. A modest 9%-10% reduction in the assumed gambling sector multiplier would eliminate the net loss entirely, potentially resulting in a small net gain.
“We looked at how people who gamble say they would adjust their spending if these reforms were introduced, and then we modelled what that means for the wider economy,” said Katherine Simpson, lead author from the University of Glasgow.
“What we find is that most of the money doesn’t disappear, it’s redirected elsewhere, so the overall economic impact is relatively limited.”
Behavioural playing
In addition to this, the investigation looked at behavioural insights.
The SPDCE sample skewed younger and more employed, with a higher incidence of problem gambling (37% scoring in the problem-gambling range versus 8.6% in the broader survey sample). Nonetheless, reallocation preferences were consistent across problem-gambling severity. According to data from UK-facing charity GamCare, nearly 2,000 people in the UK sought financial guidance for gambling-related financial issues in 2025.
Regarding unlicensed gambling, 73% of online gamblers indicated they would not divert freed funds toward unlicensed operators, with 8.5% consistently choosing that option in experimental tasks.
This comes as the UK Gambling Commission said that illegal gambling is harder to track with the rise in VPN use across the country. Data from Ofcom and app analytics provider Similarweb shows an increase in VPN use starting July 2025. It stabilised at roughly 40% higher than pre-July levels, according to Ofcom’s data.
Adrian Pabst, deputy director of the National Institute of Economic and Social Research emphasised that there was no economic hit to fear.
“There is no necessary trade-off between enhanced regulation and greater economic growth. Our work shows that the new gambling regulations will have a very small negative impact on the UK economy and that there are potential benefits in terms of people who gamble regularly saving more or redirecting their consumption to other sectors.”
“Industry fears about a massive hit to economic activity are overstated and also ignore the wider social benefits of the regulatory changes.”
Kathryn covers bitesize breaking news with a primary focus on EMEA and US legislation. A proud North Walian, fluent Welsh speaker and lifelong Wrexham FC fan – long before Hollywood came calling.