A quantitative study jointly released by the National Institute of Economic and Social Research and the University of Glasgow is shaking the foundations of the core debate surrounding UK gambling regulatory reform. The 2023 White Paper had estimated that tighter gambling regulation would lead to a reduction in the industry's gross gambling revenue of between £329 million and £812 million per year. However, after conducting macroeconomic modeling based on the upper limit of the forecast—a loss of £812 million—the research team concluded that the actual net loss to the UK economy, after accounting for the consumer spending transfer effect, is only about £134 million, merely 16% of the gross loss. In other words, the money hasn't evaporated from the economy; it's just being spent elsewhere.
From food purchases to debt repayment: the path of spending transfer
The research team designed a rather sophisticated three-tier methodology: first, conducting a preliminary survey of 1,320 regular gamblers, followed by a core experiment in May to June 2025 involving 804 gamblers, who were asked to reallocate spending in seven major consumption categories under a condition of being allocated a £50 gambling budget for one month. The most common directions for reallocating funds were highly concentrated in essential consumption areas such as food, beverages, daily shopping, household and personal items, as well as increasing savings or repaying debts. Finally, the research team used the 2022 UK input-output tables to model the multiplier effects of the aforementioned consumption transfers.
Catherine Simpson, the lead author from the University of Glasgow, summarized the core findings with a rather intuitive logic: most of the money did not disappear but was transferred elsewhere, thus the overall economic impact is quite limited. Another deep finding lies within the internal structure of the industry—online gambling now dominates the bulk of the UK's gross gambling revenue, but its supply chain is highly dependent on foreign sources, resulting in a lower domestic economic multiplier. The research model shows that if the overall economic multiplier of the gambling sector decreases slightly by 9% to 10% due to the increasing share of online gambling, the previous net losses would be completely offset, and might even result in a small net gain.
Sensitivity test of illegal market shifts and VPN variables
The research also quantified the scenario most feared by the industry—if tighter regulation leads some gamblers to shift their spending to unlicensed offshore platforms, the net economic loss would significantly increase. When 8% of the released spending shifts to illegal platforms, the net loss rises to £189 million (23% of the gross loss), and if the shift reaches 27%, the net loss climbs to £317 million (39% of the gross loss). In the experiment, 73% of online gamblers explicitly stated they would not shift their released gambling funds to unlicensed platforms, with only 8.5% of participants consistently choosing illegal alternatives during the experiment tasks.
This finding coincides with the timeline of UK VPN usage data provided by the UK Office of Communications and Similarweb—since the implementation of the Online Safety Act in July 2025, VPN usage has stabilized at about 40% higher than the previous baseline, suggesting that the illegal market may still be expanding. Adrian Pabst, Deputy Director of the National Institute of Economic and Social Research, concluded the report with a rather decisive statement—the long-standing economic impact fears of the industry have been exaggerated, and the broader social benefits brought by regulatory reform have been overlooked.
PASA official website continues to track the economic effects of global gambling regulatory reform, noting that this consumption transfer quantification model based on UK data is providing a quantifiable analytical methodology for the global economic debate on gambling regulation.
————
This article is from "PASA-Global iGaming Leaders," a gambling industry news channel: https://t.me/pasa_news
Original deep gambling channel: https://t.me/gamblingdeep
Free data reports: @pasa_research
PASA Matrix: @pasa002_bot
PASA official website: https://www.pasa.news
