Report: RET levy likely as MPs reappraise White Paper

MPs split on what is intrusive & frictionless on affordability checks debate

The debate on UK gambling adopting mandatory affordability checks on customers has drawn distinct opinions across political ranks.

Yesterday, the debate was brought to Westminster Hall as MPs responded to UK racing’s petition to “abandon financial risk checks as proposed by the White Paper”.

Collecting over 103,000 signatures, UK racing cites that the current proposals favoured by the UK Gambling Commission (UKGC) of introducing ‘light checks’ on player accounts at a net loss of £125 a month or £500 per year are intrusive to recreational customers.

Furthermore, UK Racing states that the Commission’s proposal to introduce financial risk assessments on gambling accounts with losses greater than £1,000 within a rolling 24 hours or £2,000 within 90 days poses a direct threat to the heritage sport’s funding of stakeholders.

SBC News MPs split on what is intrusive & frictionless on affordability checks debate
Christina Rees: Labour

Mandate of Gambling Review must be upheld

Opening the proceedings yesterday, MP Christina Rees (Labour, Neath) noted the sensitivities of the issue, especially concerning racing, which has put forth concerns that checks could cost its finances up to £50m a year over the next five years and lead to significant job losses within rural constituencies.

Introducing the debate, Rees referred to the mandate of the Gambling Review sanctioned on 8 December 2020 and the need to “bring UK gambling into the digital age”.

MPs are scrutinising a regulatory review that garnered over 16,000 responses, and whose White Paper recommended that “proposals for the reform of online gambling include new obligations on operators to perform financial risk checks”.

The White Paper deemed financial risk checks an appropriate measure to determine “if a customer’s gambling is likely to be unaffordable and harmful,” as the government must be accountable for the risks of “binge gambling, significant unaffordable losses over time, and risks to financially vulnerable customers.”

Rees noted that the “arguments for and against the implementation of the checks can be categorised according to three stakeholder groups: industry, reformers, and consumers” – each holding distinct views on what can be applied and what is technically feasible to adopt.

MPs were reminded that “the issue of affordability is not a new one, though. The industry itself pushed for measures back in 2019 and has continued to recognise the need for regulation and markers of harm. The government flagged an affordability check as a priority long before the White Paper.

“What is new is that since the White Paper was published, the government and the Gambling Commission have proposed actual figures for such checks. Affordability is no longer abstract; it is tied to precise thresholds.”

Racing in crossfire of the Gambling Debate 

SBC News MPs split on what is intrusive & frictionless on affordability checks debate
Philip Davies: Conservative

Moving the debate to the floor, Philip Davies (Conservative, Shipley) thanked Nevin Truesdale from the Jockey Club and the Racing Post for bringing a debate tabled on affordability checks to Parliament.

Davies stated that he had “no intention of speaking for bookmakers” but believes that racing and punters have been dragged into a “tug-of-war over affordability checks”.

“They often get caught up in the crossfire of the arguments between the well-funded betting industry and the well-funded anti-gambling campaigners.”

Davies deemed bookmakers’ position on the subject as inconsistent due to their limits on wagering restrictions applied on winning customers: “On the one hand, bookmakers say it is wrong for the state to restrict how much people can gamble; on the other hand, though, they are the most guilty of all of restricting the stakes of punters who have the audacity to back too many winners, often to pennies rather than pounds. I have warned them time and again that trying to have their cake and eat it on punter restrictions would backfire.”

Bookmaker practices aside, Davies noted that the debate should focus on applicable thresholds for affordability checks which the “Gambling Commission is proposing are completely unacceptable”.

Stake Limits needed… Affordability Checks No

SBC News MPs split on what is intrusive & frictionless on affordability checks debate
Matt Hancock

Former health secretary Matt Hancock (Conservative, West Suffolk), whose constituency includes Newmarket racecourse, stated that “the proposals, as they are being introduced, will make gambling harms worse”.

Hancock noted that measures introduced by the White Paper must maintain the Gambling Review’s objective of finding a balance between regulating a high-risk sector and protecting its consumers.

As such, Hancock, who once served as DCMS Minister, supports the forthcoming introduction of £2-&-£5 stake limits on online slots but rejects affordability checks as recommended by the Commission.

Though stake limits and affordability checks are recommended as ‘protective measures’ by the White Paper, Hancock noted that MPs must recognise the different circumstances and impacts of both restrictions carry onto the public. Noting a decline in sports betting wagers, Hancock believes that affordability checks will harm UK racing’s funding and increase consumers exposure to the black market.

“Horseracing is the UK’s second-largest sport, with five million racegoers annually, generating over £4bn for the economy and untold soft power. In Newmarket, 7,000 people are employed in or around horseracing, which puts a quarter of a billion pounds into the local economy.

“We know that 26% of bettors have already experienced an affordability check, ahead of the proposals officially coming in. We have seen that the betting turnover on racing fell by £900 million in 2022-23. 

“The financial impact on the horseracing industry is already happening. Prize money is going up in the rest of the world but is incredibly tight in the United Kingdom. The impact is biggest on the small racecourses, but there is even an impact on Newmarket, which hosts the two finest racecourses in the world.”

SBC News MPs split on what is intrusive & frictionless on affordability checks debate
Iain Duncan Smith

Reformists: Focus on effective protections not on purity of measures 

Speaking in defence of affordability checks, MPs Carolyn Harris and Iain Duncan Smith argued that the need for financial risk assessments in the White Paper were necessary to reduce gambling harms, as the number of consumers affected would be small and the inconvenience minor compared to increasing the risk of harms.

Duncan Smith (Conservative, Chingford), a prominent voice for gambling reforms, warned racing against forming closer bonds with betting firms.

“What I want to make absolutely clear is that the gambling companies are not that interested in the success or the future of horseracing per se, but just in how much money they can take out of it. I am desperately keen that the horseracing industry should thrive.”

As a gambling reformist, Duncan Smith welcomed the Gambling Commission’s clarity on what the thresholds for checks will be set at, but warned MPs that the debate should not be “about the absolute purity of no checks”.

“We are here to look at, first, what the levels are, and secondly, how intrusive they will be. If we achieve that and the right decision is made finally by the Minister, that will mean that the situation will be much better and, at the end of the day, fewer people will lose their lives or become so addicted because of the desperate nature of what they have been doing in darkened rooms and behind closed doors. We want to stop that and to save lives.”

SBC News MPs split on what is intrusive & frictionless on affordability checks debate
Stuart Andrew: DCMS

DCMS: UKGC has earned the right to test its system

Closing the debate, DCMS Under-Secretary, Stuart Andrew, backed the Commission’s approach to pilot affordability checks on operators in the coming months.

DCMS maintains that the Gambling Commission has the right to proceed with tests of affordability checks having taken into consideration 2,000 responses with regards to how it should apply its system.

“I am sure everybody agrees it is important that we do not skip ahead to full implementation before getting the details right,” Andrew’s response explained.

“The commission is actively considering all the proposal and I can confirm that many of the ideas that have been raised will be explored during the pilot stage, including looking at whether CATO or SCOR data is being used. By doing so, the commission can ensure that all the decisions that will be made are based on the evidence of what is working.”

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