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Affordability checks: An uncertain time for horseracing

SBC News Affordability checks: An uncertain time for horseracing
Felix Faulkner

As this year’s Cheltenham Festival commences, Felix Faulkner, solicitor at law firm Poppleston Allen, discusses the difficulties and confusion horseracing faces in light of the impending affordability checks in the UK.

This feels like an opportune moment to write about one of the key measures within the government’s gambling reform White Paper in the UK, with more than 250,000 people set to attend one of the biggest events in the country associated with betting at this year’s Cheltenham Festival.

Affordability checks are a hot topic right now. The issue was debated in Parliament after more than 103,000 individuals signed a petition to abandon the implementation of the checks, which was launched by Nevin Truesdale, the Chief Executive of the Jockey Club. These measures will impact horseracing significantly.

Lack of clarity

One of the key takeaways from the parliamentary debate, and the many media articles that followed, is one of confusion amongst the industry. Currently, the proposal in the White Paper is that affordability checks are to be implemented in the online sector only. The White Paper proposed that players who lose £1,000 within 24 hours or £2,000 over 90 days, will face financial checks. 

Perhaps more controversially, a moderate loss threshold at either £125 net loss in a rolling month period or £500 net loss within a rolling year period, would lead to passive checks such as checks for county court judgments or other credit black marks. 

Going forward, it will be interesting to see exactly how the affordability checks proposed within the White Paper will be brought into play while ensuring a seamless implementation for both operators and punters alike.

While these checks are initially set to affect the online sector only, the proposals have created a heavy amount of worry as to whether this will eventually extend to the land-based sector. 

At this point, it is impossible to work out how this could work logistically. The idea of bettors always having their financial information to hand, which they would give to a member of the operator’s staff whom they do not know, does not seem to be a realistic option; especially when you consider the time it could take for the customer to gain approval and the queues this would cause. 

The majority of the industry hopes, and rightly so, that the legislative regime does not lead to this, but if the affordability checks for the online sector are introduced, the risk of this being extended remains.

Potential disparity

Horseracing’s reliance on the betting industry can never be understated. In the 2022/23 financial year (the last full year with figures available), turnover from betting on horseracing in Great Britain totalled £12.69bn, placing it ahead of betting on any other sport in the country. 

While a majority of this total was generated from remote betting (£9.76bn), a combined £2.83bn was turned over from on-course and land-based betting. Horseracing may not be under the sporting spotlight year-round like football might be, but it is a sport with a strong and prestigious history thoroughly enjoyed by many people up and down the country. Any regulations that negatively impact the enjoyment of horseracing could potentially have a devastating effect on the sport.

The impending checks are not set to affect this year’s Cheltenham, but once they are implemented online, they could potentially create a disparity between the markets.

Affordability checks and blocks could be brought in during big racing events for online customers, but customers on track or in betting shops will remain free of restriction. 

In practice, it is safe to assume this inconsistency between the online and land-based sectors will drive a wedge between the industry and possibly create more friction; the complete antithesis of the Commission’s intention.

Political weight

Horseracing is a very interesting sport in that it tends to hold considerable weight in the world of politics. The recent parliamentary debate demonstrated how horseracing can be looked upon more favourably than other sports when it comes to gambling sentiment, with some MPs arguing strongly and emotively on the sport’s behalf.

It is currently unclear what is going to happen in the next General Election in the UK, or even exactly when it is going to take place. Some experts estimate that Prime Minister Rishi Sunak is expected to call an election in the second half of 2024, but it could be called as late as December. 

Gambling reform is a topic on the government’s agenda, but it most likely is not top of it. If the next General Election goes against the Conservative Party and a Labour Party government takes over, that government could have a different mindset on future gambling regulation; at this point, we don’t know exactly what that mindset would be.

This is why an exemption for horseracing is not impossible. There is history in this regard, as horseracing was exempt from the whistle-to-whistle ban on gambling advertising during sporting events before the 9pm watershed; a form of self-regulation which was implemented in 2019.

What happens next?

Based on Poppleston Allen’s conversations with operators, the market is confused about the current position and the possible future regulations on affordability. There has been mention of some operators implementing their own voluntary affordability checks ahead of the formal introduction, but in my experience, the likelihood of this is slim. If a customer is asked for additional personal information from an operator voluntarily, the probability is that the customer will just switch to an alternative operator rather than provide this information. This is why an increase in activity in the black market is a possibility as a result of the checks. 

During the debate, Gambling Minister Stuart Andrew MP confirmed the checks will at least be piloted, while also ruling out the possibility of job titles and postcodes being included in the required personal information.

SBC News Affordability checks: An uncertain time for horseracing
Stuart Andrew

Going forward, the most realistic change to the policy would seem to be what exactly can be checked when the loss threshold is reached, but the key tactic will be for operators to work together and collaborate with the government. 

This may be difficult, as different operators will have different views on what is workable for them. That could also apply to the governmental side, as MPs across the spectrum will have opposing views on the best course of action.

In any case, without a concentrated focus to work out what works for the government, operators, and most importantly, the consumers, it will be very challenging to iron out the issues the affordability checks bring with them.

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