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12th October 2023

12-October-2023
12-October-2023 6:25
in General
by Admin

Eligio goes to Worcester this afternoon, to read my thoughts click here.

PLEASE READ BELOW and ACT WHERE YOU CAN

 The Rt Hon Lucy Frazer KC MP

Secretary of State for Culture, Media and Sport

100 Parliament Street

London

SW1A 2BQ

 

 

11th October 2023

 

 

Dear Minister,

 

This letter is sent on behalf of the British horseracing industry and its genesis is our deep concern over the irreparable damage that has been, and continues to be, done to our industry as a result of the Gambling Commission’s activities on the issue of ‘affordability’. Of particular concern is the Commission’s advice to the government on measures that have the effect of unnecessarily restricting the legitimate betting activity of thousands of customers.

 

British Horseracing is the UK’s second most watched spectator sport and truly touches all parts of society. It is responsible for over 88,000 jobs and contributes £4.1 billion to the UK economy each year.

 

We estimate, from actual figures we have seen, that over £1 billion of online betting turnover on British racing will have been lost since 2021, when the Commission started insisting on customers providing pay slips, P60’s and detailed bank statements to support even fairly moderate losses. Customers have shown an understandable reluctance to provide such information. It is an obvious concern that those who have had their accounts closed, due to their failure to provide such information ironically are most likely to continue their betting activity outside of the regulatory net. Whilst these closures may tick a regulatory box for the betting operator, the Commission cannot answer what then happens to these people(if, as they suggest, they are classified ‘at risk’) once their account has been summarily closed.

 

There are a number of points we wish to make clear: 

 

First, we are generally very supportive of many of the principles and measures set out by the Government for consultation in the White Paper: ‘High Stakes’ Gambling Reform for the Digital Age’.

In particular, we welcome long overdue protections for customers playing online casino games of chance, often at fast pace and high repetition in the early hours. However, it is of considerable regret that the Commission has not seen to differentiate (when applying affordability tests), in any way, a considered horseracing bet during the day and such casino games of chance.

 

While not claiming that horserace betting carries no risk, it must be pointed out that the NHS Health Survey for England 2018 (the most recent for which the relevant data has been published) showed that rates of problem gambling for those betting on horseracing as being the second lowest (only behind lottery products such as the National Lottery). The Health Surveys show that participation in horserace betting is correlated with income. The clear effect is therefore that as horserace bettors are generally wealthier, they are the most likely to be affected by these disproportionate and unnecessary affordability measures.

 

 

 

 

Second, we also very much welcome the new statutory levy which we hope can finally fund genuinely objective research upon which carefully considered policy can follow. At present, the Commission, rightly, does not fund research from those involved in betting (or have been involved in the betting industry for the previous 5 years). Nonetheless, the Commission thinks it is a good use of tax-payers’ money to spend millions funding ‘research’ by gambling-related harm charities, the results of which are never subjected to any neutral scrutiny, not even by the Commission. In the absence of such scrutiny, this ‘research’ loses any imprimatur of objectivity and invites an ideological battle between the Commission and the betting and gambling related harm industries, of which British horseracing is fast becoming a serious victim.

 

There is an extremely worrying trend of gambling related harm charities misusing emotive statistics to paint gambling as the evil it is not, and a statutory levy can only help those more outrageous claims to be challenged (or, if true, accepted).

 

Third, there have been some clear examples of egregious behaviour by certain betting operators demonstratingshortfalls in standards that have, rightly, been subject to eye-watering fines by the Commission. It appears thesebehaviours are becoming more historical because of a welcome change in culture and behaviour in the betting industry, and for that the Commission has to be applauded.

 

However, these examples were prosecuted based on licensing conditions to which current affordability proposals have little, if any, bearing. The Commission already has the available tools with which to deal with such behaviours, irrespective of the proposed new affordability measures.

 

We have a business model reliant upon attendance and hospitality but, predominantly, a symbiotic relationship with the betting industry. Over the next five years affordability checks will directly cost the racing industry £250m. The resulting damage to the industry, which currently employs some 88,000 people, is extremely alarming. This has a disproportionate detrimental effect on the rural economy and the fragile ecosystem of related occupations that the industry supports. The number of horses in training is showing very worrying trends (1039 less horses than 2020) as overseas jurisdictions circle our horse sales.

 

The Chief Executive of the Commission gave evidence to the DCMS Select Committee on 5th September and stated clearly, given the weight of opinion against affordability, that any requests for such financial information ‘is a commercial decision of the operator’.

 

We are afraid that is simply not the case. The Commission’s own enforcement report of 2020 states: 

 

‘Customers wishing to spend more than the national average should be asked to provide information to support a higher affordability trigger such as three month’s pay slips, tax returns or bank statements.’

 

The Minister, Stuart Andrew, at the same DCMS select committee hearing, who has welcomed our feedback, has clearly stated that the proposed checks, once proposed affordability limits have been reached, should be frictionless and that ‘this has been standard throughout’. The Commission, in a clear example of exceeding its powers, specifically contradicts that, when it suggests in its Consultation document at paragraph 3.4.5:

 

 

 

 

 

 

 

‘4. Licensees must obtain data from a provider…which includes:

a. Credit performance data and
b. Income and expenditure data, including current account turnover data.

 

5.  ‚ÄčIn circumstances where a risk assessment is set out in paragraph 4. cannot be provided, Licensees must obtain information about income and expenditure of the customer…. for example, through open banking or the direct provision of information from the customer.’

 

Of equal worry is that the Commission seeks to reassure parliamentarians and our industry that ‘only 3% of accounts will be affected’. What it does not say is that that figure is based on all accounts, including hundreds of thousands of lapsed or historical accounts. The true percentage of current active accounts affected (which includes a higher percentage of horseracing accounts due to those accounts having a greater lifetime span) is considerably higher.

 

Our industry has therefore suffered considerably since the introduction of affordability measures by the Commission in 2021 and will continue to suffer if there is no change in its approach.

 

If we felt that the lost £1bn of turnover was all gambling-related harm activity, we could, and would, have no complaint. And yet, notwithstanding that we have had affordability measures in place for two years now, these measures have had no impact on any of the 9 current indices to measure gambling-related harm. The overwhelming conclusion is that the measures are not tackling the very problem the Commission thinks it will.

 

The Commission has not, as far as we can tell, carried out any research as to where that lost £1bn has gone, which is a pertinent question set against the fact that problem gambling rates remain static.

We therefore ask you to postpone the imposition of any affordability measures while we await objective research funded by the statutory levy. We have proposed an alternative way to the Minister and are happy to meet with you and him to elaborate.

 

If we continue to allow the Commission to act without any proper oversight or accountability, we face a disaster. We have had an eye on friendly competition with both France and Ireland (neither of which have any affordability measures) interms of prize money and industry investment.

 

Far from competing with our neighbours, the uncheckedapplication of affordability checks reduces the available funds to put into prize money and employment (much of it in rural areas), weakening our attractiveness and will cause UK horseracing to be the sick man of Europe, and for no good reason other than misplaced ideology.

 

Thank you for your time.

 

Yours sincerely

 

 

 

 

Martin Cruddace