‘Racing’s money tree is running out of money’ - William Woodhams’ White Paper reflections

‘Racing’s money tree is running out of money’ – William Woodhams’ White Paper reflections

The UK government has “kicked the can further down the alley” with its Gambling Act review White Paper, William Woodhams lamented, as plans for a series of consultations and political uncertainty cloud the clarity around betting’s regulatory direction.    SBC News ‘Racing’s money tree is running out of money’ - William Woodhams’ White Paper reflections

Assessing the DCMS’ conclusions, the industry’s preparations and how it can react, Fitzdares’ CEO observed that bookmakers have by and large pre-empted legislation well, but second guessing legislation has not come without its costs.

The perks of planning

Answering promptly when asked whether the White Paper provided much-needed clarity to the industry, Woodhams responded “not at all”, but he did remain optimistic that the industry had been adequately prepared for “about 95%” of proposals.

“We’ve been doing everything that we need to do, and this additional 18 months is frustrating because it kicks the can down the alley, and there might be a different government who might have a different view,” he said.

“The problem is the technology for preventing harm and working with other financial forces and other partners isn’t there yet. 

“There’s no point having a consultation for 18 months if there is no technology in place to protect those from potential harm. I’m sure the Gambling Commission are crying out for as much.”

The government first announced a review of British gambling legislation as a general election pledge back in 2019, before finally beginning the process in December 2020 and, nearly two and a half years, three Prime Ministers and three Secretaries of State later, publishing in April 2023.

Whilst the past four years has been an uncertain time for the industry, the long wait for the White Paper has at least provided bookmakers with time to prepare and, where available, predict what the overhaul might bring.

Pre-empting legislation and “beating the curve” is one a cornerstone of smart business, Woodhams observed. He added that whilst the industry, and in particular operators such as Flutter Entertainment, have achieved this, it has done little to soften the blow.

“Independents are already feeling the pain,” he said. “The like-for-like numbers for summer sport, for want of a better word, are down considerably. That’s been quite tough for the industry as a whole.”

Despite this, for the Fitzdares business model, Woodhams felt that the firm has weathered the storm of the UK’s regulatory turbulence, and will continue to do so as the legislative landscape continues to change.

As with other bookmakers, the company had prepared for the White Paper’s proposals on marketing and had already begun to manage its activities in sports and ensuring that no customers are incentivised more than others.

For most operators, particularly the mid-sized ones such as Fitzdares, preparing for the White Paper has been a case of a “constant readjustment” to wider industry developments, examining UK Gambling Commission (UKGC) material and regulatory action against other operators.

He said: “We had done most of the things before the White Paper came out, like our relationship with Fulham – we’d never be on a shirt. We’re starting to think about age verification on hoardings at the racetracks, as traditionally you wouldn’t. 

“We’ve not been asked to do that, but if you look back we stopped credit card payments a year before the Commission recommended it. We’re always trying to prepare ourselves or second guess for whatever legislation might come.”

The price of the second guess

Ahead of the White paper’s publication, betting and horse racing stakeholders repeatedly voiced concern over one measure in particular and the financial impact it could have on both sectors: affordability checks.

The review’s proposals have ultimately not labelled these tools as ‘affordability checks’, instead opting for ‘finance risk checks’ – previously alluded to by former Gambling Minister Paul Scully – and recommending some parameters for how these could shape out.

“The government feels that technology is the answer, but there are no technological solutions yet,” Woodhams said. “The technology must be out there, but there just isn’t the will in the financial services to help us.”

The impact of second guessing affordability measures has already come with its cost for both betting and racing. The Fitzdares CEO cited estimations that revenue from high-staking customers, described as “the cornerstone” of the industry, is down by around 30%.

He outlined that stakes on racing have fallen between 20% and 30%.In response, the sport has looked to make up for lost cash via the betting levy, which all operators contribute into, and the sale of data feeds.

“This is shaking a money tree that is going to run out of money,” Woodhams warned. “There is an impending horse racing funding disaster, unfortunately, and that is a combination of the White Paper and short sightedness across multiple organisations. 

“I’m a top 10 racing bookie, I’m tiny against the big people of the industry, and they have their eye on casino, the US, tennis and football – anything where there is no levy or data fees. 

“Unfortunately, it’s a ticking time bomb and we should have done more earlier. It’s a slow funding death. It’s not been made up in sponsorship or attendances, and we’re getting to the stage where horse racing betting is now a loss leader for bookmakers, and it won’t be long before some start to lose interest.”

From SBC’s conversation with Woodhams, it is apparent that Fitzdares has prepared well for the Gambling Act review White Paper via its marketing strategy, as well as integration of tools from responsible gambling partners such as Crucial Compliance. 

With more consultations on the way, the future direction of UK betting is still uncertain, but Woodhams shared his views on how the industry can help shape its course…

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