The British Horseracing Authority (BHA) has said that it welcomed the long-awaited publication of the government’s white paper on reforms to gambling regulation and that it would “work tirelessly to deliver a secure future for the sport”, amid concern that a predicted loss between £8.4m and £14.9m annually as a result of “affordability checks” on punters could be “an underestimate”.
Under the plans finally revealed on Thursday and due for implementation in summer 2024, “frictionless” background checks on online gamblers will be introduced at “moderate” levels of spend, which is defined as a net loss of £125 in a month or £500 in a year. These checks would look for county court judgments or similar signs that an individual may be struggling financially.
Further checks, which could highlight “binge” gambling or “sustained unaffordable losses”, would be triggered by a £1,000 net loss within a 24-hour period, or a £2,000 net loss in 90 days. The government expects that 80% of these further checks would also be frictionless, while 10% would be “disagreeable” interventions, requiring the customer to supply details such as payslips or bank statements.
Since “disagreeable” interventions act as a strong deterrent to further gambling at the same level, potentially harmful behaviour should be reduced, while both the turnover and profits of gambling businesses are also likely to fall as a result.
Racing’s major concern during the long wait for the white paper, however, has been that some high-staking punters who are gambling within their means, and in particular those who might bet only on major events such as the Cheltenham Festival in March, might also be caught up by the checks and deterred by demands for proof of funds.
“You could still be losing money in July that you won in March,” Julie Harrington, the BHA’s chief executive, said on Thursday. “We will do our own economic impact check on those numbers. We’re a little concerned that it might be an underestimation but that £8.4m to £14.9m is the government’s figure on how that would roll through and impact horse racing.”
The government’s forecast is broken down as a drop of between £5m and £8m in the betting levy, which is charged on bookmakers’ gross profit on racing bets, and between £3m and £6m on media rights payments to racecourses, which are increasingly based on a fixed percentage of turnover on a track’s races, rather than an individual firm’s profit on those events.
It also foresees a drop of between £0.4m and £0.9m in sponsorship revenue if betting firms adjust their marketing spend to reflect reduced turnover.
The BHA is not privy to the precise terms of media rights deals between racecourses and gambling businesses, but Joe Saumarez Smith, the BHA’s chair, said that initial discussion with the two main rights-ownership groups – Racecourse Media and The Racing Partnership – suggested the estimate of a drop of up to £6m could also be too low.
“We’ve just had a call with the media rights holders and they’re obviously going to do a bit of work on that,” he said, “but they feel that the initial impact might be a bit of an underestimate, based on what they’ve already seen from some of the recent measures that operators have been asked to implement by the Gambling Commission.”
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Racing’s reliance on betting as a significant revenue stream means it is more exposed to the effects of the new regime on gambling than other sports, and the BHA also welcomed a commitment to complete a review of the Levy system by 2024, which will “take account of the changes” to regulation and “ensure the levy delivers an appropriate level of funding for the sector”.
Sponsorship of sporting events by gambling firms is also likely to see little immediate change as a result of the legislation, a point that was highlighted by groups that had been campaigning for more significant curbs.
