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Labour is "sleepwalking into disaster" by ramming through new gambling reforms without MPs' scrutiny, critics have warned. A decision on mortgage-style betting affordability checks is expected this month.

Culture Secretary Lisa Nandy has been warned that checks will devastate the gambling and horse racing industries because punters will be driven to bet on the black market. Trainers, owners and jockeys, plus Labour and Tory MPs, say a pilot scheme run by the Gambling Commission shows the checks are pushing punters to illegal sites. Experts claim the Treasury will also lose out on hundreds of millions of pounds in lost tax revenue.

Independent analysts say the changes could deliver a £900million hit to the betting industry, which in turn would cost the Treasury £300million in lost tax.

Horse racing would also be clobbered by £300million, which industry sources say could sound the "death knell" for the sport.

Ms Nandy is also facing criticism because the Government is using the Gambling Commission, an unelected quango, to make the decision, limiting MPs' ability to scrutinise it.

The previous Conservative government proposed affordability checks as part of its gambling policy to make betting fit for the digital age.

But Nigel Huddleston, Shadow Culture Secretary, said there is "increasing evidence" to suggest that the affordability checks will not have the benefits intended when they were proposed.

"Labour have already undermined the gambling and horse racing industries with tax increases and other burdens," he said.

"Jobs are already being lost at a time when we desperately need economic growth.

"While we need a properly regulated and safe gambling market, the Government should not be ploughing ahead with poor regulations that risk driving customers to offshore and illegal operators.

"Only the Conservatives have the backbone to stand up for a responsible gambling industry and support job creation and investment in communities across the country."

Brant Dunshea, chief executive of the British Horseracing Authority, said: "The Government urgently needs to recognise it is sleepwalking into a disaster.

"It is on the cusp of introducing a policy that will negatively impact a huge number of people - a very great many of them Labour voters - who either enjoy racing or are connected to the betting industry.

"In allowing the Gambling Commission to introduce a policy that will rob the Government of £300million a year in taxes and deprive horse racing of £250million in finances in just five years, and drive further consumers to the black market - without giving MPs any opportunity to debate or scrutinise its implications - simply beggars belief.

"The impact on betting operators of these checks will be profound. The industry estimates it will cost it £900million a year.

"That will result in huge job losses and the knock-on impact that will also have on racing is clear.

"Next week, voters across the country are going to the polls - it is not too late for the Government to stop these checks and recognise the genuine concerns of millions of voters who work in and enjoy betting and racing."

Grand National-winning trainers are among leading racing figures demanding a major rethink of betting affordability checks.

They include Lucinda Russell who trained 2023 National winner Corach Rambler, and Robert Waley-Cohen, owner of Noble Yeats who won a year earlier.

A Gambling Commission spokesperson said: "We reiterate that we're continuing to work on financial risk assessments, with one of the key focuses being on removing unnecessary friction for consumers.

"If financial risk assessments are introduced, the checks would be for a small proportion of the highest spending accounts, and it would be frictionless to conduct the check for the vast majority of those.

"To request financial documents following an assessment would serve no legitimate regulatory purpose.

"Not only would the Commission not require such document checks, we would provide guidance to gambling businesses that they are not appropriate.

"No decisions have as yet been made. We will shortly be putting recommendations to our Board on next steps and we continue to commit to further engagement, evaluation and a sensible implementation approach to any measure that is introduced."

A spokesperson for the Betting & Gaming Council said: "Ministers promised frictionless and workable Financial Risk Assessments (FRAs), but the pilot shows they are neither. If implemented, they will ultimately result in operators having to ask thousands of customers to provide personal financial documents.

"Given the scale of the impact, the Government must not allow these checks to proceed unless the evidence clearly demonstrates they are frictionless, reliable and necessary."

The Department for Media, Culture and Sport has been contacted for comment.