The Gambling Commission has been consulting on plans to impose unprecedented new affordability checks on horserace bettors in Great Britain. We are extremely concerned about the potential impact of these checks on horseracing.
Whilst the consultation closed last week, you can download ARC's full response here. A summary of our concerns is outlined below.
We support the Gambling Commission’s stated objectives in principle and many of its other reforms. Proposals for affordability checks, as they currently stand however, are potentially disastrous for racing.
The British horseracing industry has warned that it is set to lose £250m over the next five years if these checks are introduced whilst many of the over 80,000 jobs the industry provides would also be at risk, which you can read more about here.
The Gambling Commission’s consultation has received thousands of responses and rightly drawn significant interest from the wide variety of stakeholders that the proposed changes would affect.
Proposed affordability checks are not fit for purpose and will deter legitimate customers from engaging
The proposed checks will deter punters from betting on British horse and greyhound racing with licensed bookmakers and threaten their right to privacy. Ultimately this would be to the detriment of racing. A significant number of racecourses and stadia in the UK rely on revenue from their media and data sales as a major revenue stream, of which much comes directly from the online betting industry. A recent survey of bettors conducted by the British Horseracing Authority found that 52% said that they would either bet significantly less on horseracing or stop betting altogether if the proposed checks were implemented.
Although the Gambling Commission has claimed that these checks will be ‘frictionless’, we have significant concerns that this will not be the case. The proposals, as outlined in their recent consultation, exceed the policy set out in the Government’s Gambling White Paper and therefore overstate the extent to which the checks can really be ‘frictionless’.
The design of the proposed checks ignores the nature of the betting market. In particular, it overlooks the fact that consumers are able to open numerous accounts with different online operators, as well as betting in cash. Analysis of NHS Health Surveys consistently shows that betting on horseraces is associated with higher-than-average mental health and wellbeing (compared with the overall population) and low levels of problem gambling – with only lottery products having a weaker association with problem gambling.
None of the thresholds proposed for the affordability checks take this into account. As a result, they will impact countless legitimate consumers who have no issues with gambling. For example, one proposal – to impose checks on any customer losing £125 in a rolling 30-day period - encompasses a large number of legitimate consumers playing within their means. This is not a targeted measure.
The proposals are supported by a slight and selective presentation of evidence
The Gambling Commission has frequently cited the misleading figure that ‘only 3% of accounts’ will be affected by the proposed checks. However, this figure includes dormant accounts within its scope. It severely underestimates the potential impact of the checks and should not be used as a basis on which to decide on their implementation.
The evidence provided throughout the consultation has been highly selective. We are concerned that this undermines due process. It also means the consultation is likely to significantly underestimate the impact of the proposed measures on the behaviour of betting consumers, and therefore the financial impact on the horseracing industry. Further details of the way in which the Commission have been selective in their use of evidence are provided in our full response to the consultation.
Checks will threaten the financial viability of the British horseracing
Horseracing is Britain’s second most popular sport, generating over £4 billion each year and employing over 80,000 people, many of which are based in rural areas. The new affordability checks being considered by government are an existential threat to this much-loved British sport.
We have significant concerns that the government’s proposed checks would undermine the financial ecosystem that underpins the commerciality of British horseracing. New deals established across the industry in recent years are based predominantly on betting turnover and rely on the ongoing growth of this sector. A reduction in betting revenues would be a direct hit to racecourse businesses, inhibiting their ability to invest in prize money, facilities and employment.
Existing affordability checks (imposed by the Commission through informal means) are estimated to have cost the horseracing industry over £1bn since 2021. In a letter sent this month to Secretary of State for Digital, Culture, Media and Sport, Lucy Frazer, eight leading organisations from the British horseracing industry warned that the industry is set to lose £250m over the next five years, if the proposed checks are implemented. A recent BHA survey of 14,000 racing punters also found that 77% of respondents were opposed to the prospect of being subject to financial vulnerability checks on meeting a certain net loss threshold.
Checks will cause significant damage to the rural economy
In total, more than 88,000 people are employed by the horseracing industry, often in rural areas. Racecourses, stables and breeding operations are significant employers in many rural constituencies. We anticipate that thousands of those who support and service racing in rural areas could lose their jobs as a result of these checks being implemented. The potential damage that could be caused by these checks would cross social, geographical and economic divides.
Existing affordability checks have had no discernible impact on eliminating problem gambling
Intrusive financial risk checks have already been in place in the industry for a number of months, with many operators implementing them in line with guidance from the Gambling Commission. To date, evidence has not suggested that existing checks have made any tangible impact on problem gambling rates.
DCMS has indicated that a pilot study would be instituted to test the ability of the checks to be ‘frictionless’. However, the department provided no further information on what form this would take – we believe this to be a glaring omission from the consultation. Without this pilot, there is no evidence to suggest that these checks would be effective in meeting their stated aims.
We are extremely concerned that, if anything, additional checks would exacerbate risks to legitimate betting customers, by pushing them onto the unregulated black market. The ease with which UK punters can engage with unregulated betting operators overseas is an ongoing concern for the UK betting industry. A BHA survey of more than 14,000 racing punters published this month found than four in ten respondents would be prepared to switch to the unregulated market if faced with stringent affordability checks.