As we reach the tail end of 2023, the hottest topic of conversation in the racing world is the issue of proposed affordability checks. Few would question the motives behind these financial checks, i.e. to reduce the potentially devastating impact of problem gambling. The question is whether this is the correct and most effective approach.
An estimated 0.3-0.5% of the UK population has been adversely affected by problem gambling – equating to around 200,000 individuals. This is a sobering number, but one which is broadly on a par with the estimated 200,000 to 350,000 UK residents with an online shopping addiction.
Many within the racing industry and swathes of regular punters – who bet perfectly legally as a hobby, with no adverse consequences – have voiced their disapproval, stating that not only are the checks unlikely to achieve their aims, but they will also cause immense damage to a historic and productive industry.
What are the Proposed Affordability Checks?
There are two tiers of affordability checks contained within the Gambling Review White Paper, which is currently under consideration by the Gambling Commission before being introduced as official Government policy.
The first tier is triggered if a customer incurs losses of £125 over 30 days or £500 over 365 days. At this level, the checks will be frictionless, i.e. happening behind the scenes, using publicly available financial information, with the aim that customers are unaware that the checks are even taking place.
The second, more intrusive tier is triggered if a customer incurs losses of £1,000 in 24 hours or £2,000 over 90 days. These checks may require the customer to provide sensitive financial information such as payslips, P60s, and bank statements to satisfy their bookmaker that they should be allowed to continue to bet.
Checks Are Already Here
In anticipation of the blanket rollout of affordability checks, many bookmakers have begun conducting checks on customers, leading to an inconsistent system, varying from bookmaker to bookmaker.
It is estimated that this process has already cost the industry in the region of £1 billion, in addition to proving almost universally unpopular with punters and contributing to a significant decline in the number of racehorses in training. That decline in numbers is no doubt related to a situation which allows an owner to spend vast sums on the purchase and upkeep of a horse (with no hindrance whatsoever) but requires them to supply reams of financial data to place a relatively small bet on their runner.
All of which may be an acceptable price – if the checks significantly reduced problem gambling. Therein lies the first issue. As of November 2023, no published evidence suggests that affordability checks are an effective measure against problem gambling. Instead, it is theorised that they may drive people away from the sport or, even worse, towards black market operators.
The Threat of the Black Market
Black market betting operators are only a minor issue in the UK. However, part of the reason for that may be that, until now, punters have had little incentive to turn to the black market, with so many reputable firms available. Might intrusive affordability checks increase the incentive for customers to take their business to the unregulated black market?
A recent survey entitled “Right to Bet” reported that close to 9% of respondents had already turned to the black market due to affordability checks, with 40% stating that they would be prepared to do so in the future. Combining those findings with the 31.9 million active UK betting accounts (as reported by the Gambling Commission) creates the unpleasant prospect of a large-scale migration to the black market – which would likely prove disastrous for the industry and indeed for problem gamblers.
For the racing industry, any move towards the black market would result in a significant reduction in Levy funding, which the sport receives from all bets placed with legitimate operators. Should the checks be introduced, forecasts suggest that racing will suffer a £250 million loss in earnings over a five-year period.
By their very nature, problem gamblers may be more likely to turn to black market operators. Regular recreational punters upset by the affordability checks may simply stop betting. Those with an addiction are more vulnerable to the temptation to seek alternative avenues. The vast majority of legal UK bookmakers have already introduced a suite of self-help tools, including daily and monthly deposit limits, time-out periods, and links to initiatives such as GamStop. None of these tools will be in evidence at a black market site, potentially speeding up the downward spiral of affected individuals.
Is Racing Really the Problem?
As an industry which supports 85,000 jobs and contributes over £4 billion to the UK economy every year, it is argued that UK Horseracing should be protected rather than handicapped by the proposed introduction of these checks.
Is it reasonable that horse racing should be so hard hit, via a reduction in income and the knock-on effects to prize money, media rights and ownership – when the majority of problem gamblers are found in casino-style gaming, e.g. the exploding area of online slots? Would a more nuanced and focused approach not prove more beneficial in targeting those most vulnerable, without drawing an unnecessary number of non-problem gamblers into its net or damaging a staple of the British sporting landscape?
An Infringement on Civil Liberties not seen in Other Areas
One further argument against the checks is that they represent a disproportionate infringement on civil liberties, not in evidence in other areas of life.
Alcohol is one obvious area for comparison. The vast majority of the UK public who drink do so without issue, with the odd beer, just like the odd bet, serving to enhance their enjoyment of life. Nevertheless, a small percentage of drinkers become alcoholics with occasionally ruinous consequences.
Fast Food, and perhaps most significantly, the National Lottery, or even online shopping, are other areas – all activities which are fine in moderation but detrimental in excess, and all of which are free from any comparable policy. In a free, democratic society, is it the role of the government to police what the individual chooses to spend their own money on? Bearing in mind that, at the lowest levels, a check would be triggered should a punter incur an average loss of £1.37 per day – about 1/3 the price of a cup of coffee.
Petition Gathering Momentum
Given the lack of evidence that the proposals are likely to achieve their stated aim and the potentially disastrous impact on the horse racing industry, it is no surprise that those within the sport have opted to fight back and make their voices heard.
The 1st of November 2023 saw the launch of an official petition titled, “Stop the implementation of betting affordability/financial risk checks”. Created by the Jockey Club Chief Executive Nevin Truesdale on behalf of the racing industry and its customers, it is hoped that the petition will force the government to reconsider what is viewed as a short-sighted and heavy-handed approach to a legitimate issue, and one which strays a little too close to overriding the civil liberty of the individual.
Having quickly reached over 80,000 signatures, the government are already required to respond to the petition. Should the 100,000-signature total be reached, the issue will be considered for debate in Parliament.