Talking Horses: Racing awaits impact of white paper on gambling reform

For centuries, sailors dreaded the Doldrums, the equatorial waters where a ship could be becalmed for weeks while its crew were slowly driven out of their minds by boredom and frustration. The extended wait for the government’s white paper on reforms to gambling legislation – originally due to be published in late 2021 – could be having a similar effect.

There seems little doubt the proposed reforms will include some form of “affordability” checks on punters whose activity raises concerns about potential problem gambling. The detail about what form these checks would take, however, or the level or type of activity that would trigger an intervention, is still unknown.

But there is a growing body of anecdotal evidence that some gambling firms have decided to jump the gun. The Racing Post has been reporting for several weeks that increasing numbers of online punters have been asked to supply financial details, including bank statements, payslips and P60s, in order to continue placing bets with some companies. There is evidence too of the same practice extending to betting shops.

In turn, the Post suggests, some gamblers are being pushed towards the black market, which has grim implications for their own welfare and racing’s long-term finances. Closer to hand, there is a suggestion the annual upturn in betting turnover before and during the Cheltenham Festival in March could bring an equivalent spike in the number of punters being swept up in the checks.

Ultimate responsibility for this situation appears to lie, in the Post’s opinion, with the Gambling Commission, created by the 2005 Gambling Act to ensure gambling is “open and fair”. The Commission, it claims, has been putting increasing pressure on gambling businesses to impose the checks or face significant fines for failure to comply with the terms of their licences.

The possibility that a losing first day at Cheltenham could mean you are blocked for the final three is a difficult one for any punter to contemplate. What’s more, since a block on an account pending affordability checks is likely to be imposed by an algorithm, there is an obvious potential for chaos if it is triggered at a relatively low level of activity.

My own feeling – and while the wait for the white paper goes on, a feeling is all it can be – is that the short-term concerns are a little overblown. The Gambling Commission is a deeply deficient body in many ways – as the Football Index collapse in 2021 clearly showed – and its understanding of punters and betting is slim to nonexistent. But it would be a greater folly still to allow the betting industry to grind to a halt in the biggest week of the racing year.

In the longer term, some form of affordability checking, imposed on at least some gamblers, seems inevitable. A study in 2019 showed that a relatively small fraction of customers are responsible for most deposits with online gambling firms – 83% of deposits were from 2% of customers in one case – and while some, perhaps many, of those are high net-worth individuals who can afford it, some will be in the grip of a gambling addiction.

The overall problem gambling rate among Britain’s gamblers is about 0.3%, and betting on racing and other sports is a relatively safe form of gambling when compared with casino and gaming products such as online slots. However, if betting and gaming are treated as one and the same for affordability checks, the implications for the sport could indeed be significant and, to some extent at least, of its own making.

Racing looked the other way for years as major firms ruthlessly exploited the wholesale inadequacies of Labour’s deregulation in 2005, via £100-a-spin gaming machines on every high street. The Racing Post – under a previous editor – gave Fred Done a double-page spread to warn he would close most of his betting shops if the stake limit was cut to £2 [narrator: “when it was, he didn’t”].

A handful of voices warned at the time that gaming – online and on the high street – was being allowed to poison the well for betting, that having sown the wind, the gambling industry would reap the whirlwind in time. Now, that time has nearly arrived and the white paper will reveal the full extent to which racing will also pay the price.