Safe from harm
Is participation reduction now on the UK agenda?
Tax arguments suggest a hidden agenda is surfacing again.
In +More: Betfred gets fined by the UK Gambling Commission.
Michi-gone: Judge issues Kalshi with temporary restraining order.
German regulator blocks FIFA partner ADI Predictstreet.
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The reducer
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.”
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+More
UK: Petfre (Gibraltar) Limited, operator of Betfred.com, has agreed to pay £900,000 following a settlement with the UK Gambling Commission over social responsibility failings. The regulator found weaknesses in the operator’s automated safer-gambling systems, including delays in identifying and interacting with at-risk customers. In one case, a customer lost £17,900 within 24 hours without intervention. The Commission said Petfre has since implemented remedial measures and strengthened its compliance framework.
Alberta: The forthcoming regulated iGaming market is expected to generate approximately C$76m ($53.5m) in tax revenue during its first year of operation, according to Service Alberta minister Dale Nally. Speaking ahead of the market’s July 13 launch, Nally said the competitive model is designed to channel players away from unregulated sites while delivering new government revenues. Officials expect the market to mirror Ontario’s success in attracting licensed operators and improving consumer protection.
Sports integrity: Former NBA players Malik Beasley and Ed Davis have been indicted by federal prosecutors as part of a widening illegal sports-betting investigation. Prosecutors allege Beasley manipulated his on-court performances in multiple games while with the Milwaukee Bucks to benefit bettors, with Davis accused of helping organize the scheme. Six people face charges including sports bribery, wire fraud and money laundering conspiracies.
Nebraska: A campaign to legalize OSB in Nebraska remains on track to qualify for the November ballot, with organizers saying they expect to submit enough signatures before the July deadline. The proposed constitutional amendment would allow licensed online sportsbooks tethered to racetracks, with a 20% tax rate and a portion of revenue earmarked for property tax relief. Supporters argue the measure would recapture betting currently flowing to neighboring states and illegal operators.
Bally’s has hired the law firm of former Chicago mayor Lori Lightfoot to support a potential lawsuit against the City of Chicago over its move to legalize video gaming terminals in bars and restaurants. The casino operator argues the policy breaches its host agreement and could significantly undermine the economics of its planned Chicago casino development, threatening jobs and tax revenues.
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Michigan legal moves
Trench lawfare: Kalshi’s legal battle with state regulators has taken another significant turn after a Michigan judge issued a temporary restraining order preventing the prediction market operator from offering sports event contracts to state residents.
The order was granted by Ingham County Circuit Court Judge Rosemarie Aquilina following an application by Michigan Attorney General Dana Nessel.
The judge prohibited the New York-based company from allowing anyone located in Michigan to trade sports event contracts and ordered Kalshi to implement a state-licensed third-party geolocation service to enforce the restrictions.
Failure to comply could result in fines of $120,000 per day.
In her ruling, Aquilina accepted the state’s argument that Kalshi’s products amount to unlicensed sports betting rather than legitimate financial derivatives, stating that Michigan and its residents would suffer “immediate and irreparable harm” if the products continued to be offered.
It highlighted concerns that vulnerable consumers were being exposed to gambling activity presented as an investment opportunity.
Kalshi said it intends to challenge the decision, maintaining its long-standing position that its event contracts fall exclusively under the jurisdiction of the CFTC.
Add it up: The Michigan decision adds to an increasingly complex litigation landscape. Nevada has already secured a preliminary injunction preventing Kalshi from offering similar contracts without obtaining a state gaming license.
Massachusetts has also obtained an injunction, although enforcement there remains on hold pending appeal.
Arizona has gone further by pursuing criminal charges against the company, while several other states continue to contest Kalshi’s operations through cease-and-desist orders and civil litigation.
Far from over: The ruling provides another indication that state courts remain willing to accept arguments that sports event contracts closely resemble conventional sports wagering, regardless of their federal regulatory status.
However, the broader jurisdictional dispute remains far from settled.
Conflicting rulings together with the CFTC’s support for prediction markets mean the issue appears increasingly likely to require definitive resolution by the federal appellate courts.
+More predictions
Massachusetts has been allowed to expand its lawsuit against Kalshi to include allegations of underage gambling violations. A Suffolk County Superior Court judge approved claims that Kalshi permitted people under 21 to trade sports event contracts and targeted them through advertising. The allegations add to the state’s case that Kalshi offers unlicensed sports betting. An earlier injunction remains paused while Kalshi appeals.
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Germany blocks FIFA partner
Nein: Germany’s gambling regulator has forced FIFA prediction market partner ADI Predictstreet to block access to its platform from within Germany, the latest move on the part of a European gambling authority against prediction markets.
The German Joint Gambling Authority of the Federal States (GGL) confirmed it initiated enforcement action after determining that ADI Predictstreet was offering services in Germany without the required national gambling license.
ADI Predictstreet has been a highly visible sponsor of the ongoing World Cup, featuring on pitchside hoardings and interview backdrops.
Following the regulator’s intervention, the company – which lacks a German betting license – restricted access to users connecting from Germany, displaying a notice that the service is unavailable in the jurisdiction.
In your face: According to an analysis by the University of Hohenheim, commissioned by RedaktionsNetzwerk Deutschland, viewers watching Germany’s opening two World Cup matches on public broadcasters ARD and ZDF were exposed to almost an hour of gambling advertising.
The GGL said the operator’s subsequent geo-blocking of German users resulted directly from its supervisory measures.
Under Germany’s Interstate Treaty on Gambling, only operators appearing on the regulator’s official whitelist are permitted to market gambling services to German consumers.
Foreign licenses, including Gibraltar, which is the flag that ADI Predictstreet flies under, do not automatically authorize operators to target the German market.
Own goal: ADI Predictstreet has previously argued that it had not directed marketing specifically at German consumers and therefore believed it was complying with applicable laws. FIFA has not publicly commented on the regulatory action.
The case is significant beyond Germany because ADI Predictstreet is FIFA’s official prediction market partner, illustrating the regulatory uncertainty surrounding event contract and prediction market businesses outside the US.
The platform, backed by interests linked to Abu Dhabi’s ruling family, offers markets on sporting events alongside political and economic outcomes. It also signed a partnership with Kalshi late last week
The German action comes shortly after the GGL joined several European gambling regulators in warning that prediction markets can present consumer protection, market manipulation and transparency risks if they fall outside established gambling regulatory frameworks.
Within the past fortnight, nine European gambling regulators issued a rare joint declaration warning consumers, sports organizations and operators about the risks posed by prediction markets during the World Cup.
The statement is one of the most coordinated international responses yet to the rise of prediction markets in the US.
Calendar
Jul 8-11: NCLGS summer meeting, San Diego
Jul 22-24: NCPG Annual Conference, Nashville
Nov 10: Gaming in Germany, Berlin
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