Just as long as my baby’s safe from harm tonight: A research paper on affordability checks may have done something the UK gambling debate has largely failed to do: put numbers around the trade-off between preventing harm and preserving liberty.

Ulterior motive: That matters because, as industry commentator Vaughan Lewis argued in a recent Substack post, UK gambling policy is increasingly behaving as if it has acquired a fourth licensing objective: reducing gambling participation.

• The Gambling Act 2005 set out three statutory objectives: preventing crime, ensuring gambling is fair and open, and protecting children and vulnerable people from harm.
• It did not say that adult gambling participation should be reduced as an end in itself.

Overt maneuvers: But the news this week about the SMF calling for a new rate of 40% on machine games duty (MGD) once again suggests that is indeed the main objective of the anti-gambling campaigners.

• Regulus Partners noted that such an imposition would likely cause the closure of 70% of UK betting shops and up to 90% of adult gaming centers.

Tell us what you really think: Lewis’ point is not that participation reduction is necessarily illegitimate. “The issue is that Parliament has never been asked to decide,” he wrote. If ministers, regulators or campaigners believe the UK should now move from regulating gambling to suppressing overall demand, that should be made explicit.

• The alternative is regulatory drift, where a series of individually defensible interventions cumulatively changes the purpose of the regime without any democratic decision to do so.
• “The UK has accumulated a series of reforms that individually address harm concerns but collectively move policy in a particular direction,” said Lewis.
• “The trade-offs embedded in that direction have never been debated explicitly, despite substantial international evidence about their consequences.”

The balance of the evidence: A newly published paper from the Society for the Study of Addiction examines financial risk assessments using open banking data from 424 UK gamblers, combining actual bank records with Problem Gambling Severity Index scores.

• The key finding was that the UK’s proposed £150 net-deposit threshold over a rolling 30-day period put greater weight on harm prevention than liberty preservation.
• Over 12 months, two-thirds of at-risk consumers crossed the threshold, but so did nearly half of no- or lower-risk participants.
• The authors found that a slightly higher threshold, around £187, marginally improved the balance, though £150 still sat within the range of potentially appropriate values.

In the public sphere: The report does not say affordability checks are wrong and nor does it say the industry should be left alone. But, as Lewis said, in the UK affordability checks have “expanded without clear public consensus about where intervention thresholds should sit.”

• And while none of the measures introduced have been explicitly promoted as being participation reduction attempts, the net effect is the same.
• “The result is a regulatory framework that appears to be operating as if reducing gambling participation is itself an objective, despite no such objective existing in primary legislation,” said Lewis.

I’m free: Adult gambling was legalized on the premise that consumers should be free to take risk, spend disposable income and engage with a regulated betting product, provided the market is fair, crime-free and subject to protections for children and vulnerable people.

• That freedom has never been absolute and there are always decisions to be taken by governments over how to balance consumer freedoms with harm reduction.
• But a regime that imposes too much friction on too many consumers risks undermining channelization and pushing higher-value or more determined bettors towards unlicensed operators.
• That is the central weakness in participation-reduction thinking. It assumes less activity in the licensed market equals less harm.
• But if demand persists and migrates offshore, the apparent reduction may simply be a transfer from visible, taxable, supervised activity to invisible, untaxed and less controllable activity.

Slop: Regulus said this week of the SMF’s 40% MGD recommendation that “not only is the economic modelling and industry knowledge in the report demonstrably poor, the underlying assumptions on participation and harm are also sloppy and selective.”

• “Raising MGD to 40% is a counter-productive policy based upon a poor use of evidence and false arguments,” the analysts added.
• “Living proof of this is also occurring in the Netherlands, where a 37.8% tax rate is yielding far less than expected because of land-based declines caused by closures.”
• Foreign bodies: Lewis draws attention to the same dynamic. “International evidence increasingly shows that adding friction to regulated products can sometimes encourage migration to unlicensed alternatives,” he said.
• “The lesson is not that regulation causes black markets,” he added.
• Instead, he said that “every additional restriction should be assessed not only for its potential harm-reduction benefit, but also for its effect on the regulated market’s ability to retain customers.”