James Noyes, a key advocate for the introduction of affordability checks for gamblers, has urgently requested a halt to their rollout. Stuart Andrew, the former gambling minister, has voiced his agreement with this call. The British Horseracing Authority has warned that the implementation of these checks could lead to a £250 million annual loss in revenue for the industry, as bettors may refuse to provide personal financial information to gambling operators and instead turn to the unregulated black market.
During a board meeting set for Thursday, the Gambling Commission is anticipated to overlook the increasing concerns and proceed with the formal adoption of what it refers to as financial risk assessments. This could result in tens of thousands, potentially even hundreds of thousands, of bettors with licensed UK operators being required to submit documentation regarding their income or assets in order to continue gambling. This move contradicts earlier assurances from Andrew and others that the process would be largely seamless for all but a small minority of gamblers.
This situation poses a significant threat to Britain’s racing sector, as it risks causing irreparable harm should bettors cease wagering or migrate to the black market. This challenge arises despite findings from the Gambling Commission’s annual surveys indicating that betting on horse racing is among the safest forms of gambling available. Noyes has emphasized that the original intent behind introducing these checks was to target online slots and casino games, which are far more likely to be linked with problem gambling.
The evolution of this issue has been lengthy and somewhat convoluted, with racing contributing to the current predicament. Following the enactment of the Gambling Act in 2005, which legitimized high-stakes roulette machines in betting shops, fixed-margin gaming has increasingly dominated the financial statements of gambling companies. Furthermore, the rise of online gambling has allowed operators to promote casino games and slots—products that pose no risk for them—to customers who initially engaged with racing and sports betting.
Additionally, strict betting limits and account closures have driven numerous punters toward the black market. Throughout this two-decade period, the racing industry largely chose to ignore these developments.
In light of this history, it is crucial to recall the rationale behind the proposed checks. Problem gambling can have severe repercussions for both the individuals affected and their support networks. Studies indicate that 40% of gamblers identified as high-risk on the Problem Gambling Severity Index report experiencing at least one serious consequence of their gambling behavior in the past year, such as relationship issues or criminal activity. In contrast, only 20% of this group have sought assistance from gambling support services during the same timeframe.
The primary goal of these checks is to identify individuals at the highest risk of harm and ensure they receive the necessary support. Addressing the alarming statistic that 80% of those at risk do not seek help is an urgent priority, as no form of gambling, including the weekly lottery, is entirely risk-free.
However, from the perspective of the racing industry, a significant flaw in the checks is that they are solely triggered by spending, lacking additional indicators such as frequency or duration of gambling. While this may be suitable for repetitive, fixed-margin gaming, it is not a fitting measure for potential harm in betting, which has distinct characteristics regarding profit, loss, and participation. Applying gaming-focused checks to betting is likely to result in a substantial number of false positives.
For years, the gambling industry has sought to obscure the distinction between gaming and betting. The term “B” in FOBTs, machines that transformed betting shops into casino-like environments, stands for “betting,” even though this is misleading. The racing sector has, for a long time, acquiesced to this narrative until a recent successful campaign against the harmonization of gambling taxes fostered a new, constructive partnership between the sport and prominent advocates for gambling reform.
There is hope that the Gambling Commission recognizes the fundamental differences between betting and casino gaming. Yet, throughout this prolonged process, which began under the last government and appears set to culminate two years into the new administration, there are lingering concerns regarding the regulator’s understanding of the issues and its ability to adjust its course if necessary.
The Commission’s preference for the term financial risk assessments over affordability checks suggests a reluctance to fully engage with the ongoing discussion or to reconsider its trajectory. This situation brings to mind a scene from The Simpsons, where a con artist assures Homer he is not selling a pyramid scheme but rather a surefire route to wealth based on a trapezoid.
If this reference stirs uncomfortable memories for the commissioners, they have only themselves to blame, as the Commission previously licensed a Ponzi scheme called Football Index, allowing it to operate for 14 months after significant executive misconduct was reported.
