Gambling review: BHA welcomes publication but urges Levy reform

The British Horseracing Authority has welcomed the belated publication of the government’s Gambling Act Review White Paper which was released on Thursday, but the sport's regulator and administrator has stressed the need for a swift review of the Levy.

The government announced in the long-awaited legislation that gamblers could face financial checks before being allowed to part with their money, with the Gambling Commission intending to consult on two forms of financial risk checks for lower and higher levels of spending.

The lower level looks for signs of financial vulnerability, such as County Court Judgments, and the paper proposes that the threshold for these checks is £125 net loss within a month or £500 within a year.

The higher level of spending check has a proposed threshold of £1,000 net loss within 24 hours or £2,000 within 90 days and would warrant ‘a more detailed consideration of a customer’s financial position’.

The paper also proposes that these thresholds are halved for customers aged between 18-24 ‘given evidence of increased risk’.

Joe Saumarez Smith, chair of the British Horseracing Authority and member of the Gambling Strategy Group (which has led on representations around the Gambling Act Review and Horserace Betting Levy reform) said: “Today’s publication of the White Paper is an important moment for the industry on a significant issue for its future prosperity.

“It is crucial that any regulatory framework for gambling recognises that millions of people safely enjoy betting on horseracing, while taking action where needed to protect people experiencing gambling-related harm. British racing is already supporting work in this area through the development of a safer gambling policy, building on good practice already established on our racecourses.

“We are pleased that the UK Government has reflected on our industry’s detailed representations and recognised the importance of British racing in today’s White Paper. Throughout the last two years, we have spoken clearly and with one voice to the Government about the importance of proportionate legislation, and the significant potential for unintended consequences.”

The paper states that only a small number of gamblers are likely to be affected, with an estimate of three per cent, and that the checks will be ‘frictionless for customers and conducted online by credit reference agencies’.

As those with gambling issues often hold several accounts with different bookmakers, the paper proposes that the Gambling Commission consults on introducing a ‘cross-operator harm prevention system’ that will involve the sharing of data and will be informed by the findings of live trials developed with input from the Information Commissioner’s Office (ICO) and the Commission.

Saumarez Smith added: “While there are a range of measures included within the White Paper, there will be a series of further important consultation processes – including on the critical area of affordability checks – in the months ahead.

“In these, we will continue to make our case that sweeping blanket checks on affordability are not appropriate, with any measures needing to being proportionate and targeted at individuals and their specific circumstances.

“We will now undertake further consideration of these measures, assessing their impacts on British Racing, and will provide a comprehensive, evidence-based, response to the various processes which today’s White Paper has commenced.”

The paper also proposes limitations on the advertising and sponsorship sector of the gambling industry and aims to review the ‘design and targeting of incentives such as free bets and bonuses’ so that excessive gambling is not encouraged among those who are vulnerable.

It is estimated that as a result of the measures racing will suffer between a six and 11 per cent reduction in the online component of the Levy collection, translating to a total loss of income to the industry that will fall somewhere between 0.5 and one per cent.

The paper says it recognises the symbiotic relationship between the racing and gambling industries and pledged to review the Levy system by 2024, considering the sport’s proposed changes that include adding overseas races into the scope of the levy, increasing the overall level of contribution and basing the calculation on gross amount staked rather than on gross gambling yield.

BHA chief executive Julie Harrington said the Levy review was needed to enable British racing to receive a “fair return” from betting activity.

“We very much welcome the launch of the review of the Horserace Betting Levy,” she said.

“This important review provides an opportunity for the Government to ensure British racing receives a fair return from betting activity, protects the sport against inflationary pressures, and maintains our position as the world-leader in thoroughbred racing and breeding.

“We call on the Government to now complete and implement this Levy review as soon as possible in order to support a great British sporting and cultural asset.

“While the publication of the White Paper sets out a roadmap for the future of gambling regulation in Britain, it is clear that substantial consultations will be required in the important weeks and months ahead.”

The British Horseracing Authority intends to ensure the affordability checks on lower-level gambling spend are as unobtrusive as proposed in the government’s Gambling Act Review White Paper.

The paper proposes that the threshold for these checks is £125 net loss within a month or £500 within a year and also states that the checks will be ‘frictionless for customers and conducted online by credit reference agencies’.

Julie Harrington, chief executive of the BHA, felt the nature of these checks was crucial to their success and that their practical implication would decide how much of an impact they would have on racing’s revenue.

She said: “The numbers around the less intrusive checks, the £125, are much lower (than anticipated), but it depends on the big unknown for us.

“The work we will do with the Gambling Commission on behalf of the government is how unintrusive and friction-free those checks are.

“The one area we want to get visibility on to see how much of a risk it is to us is those friction-free tests at the lower end of losses.”

Harrington was concerned that the paper’s estimation of the financial losses racing will suffer as a result of the measure was an underestimation, with a total reduction in income between £8.4 and £14.9 million the predicted sum.

“The government’s own economic impact work is estimating between £8.4 and £14.9 million negative impact per annum,” she said.

“We want to work with our partners in the media rights companies to do our own economic check on those numbers. We’re a little concerned that it might be an underestimation.”

Another factor the BHA intend to raise with the Gambling Commission is the seasonal nature of racing gambling, with punters likely to stake and potentially lose more when the big festivals are under way.

This could bring a customer who is not a habitual gambler close to the threshold for enhanced checks and the BHA has data to share to highlight these patterns among those who bet on racing.

“Part of our conversations with the Gambling Commission has got to be taking into account customer behaviour and historic customer behaviour shows that people do save up for those major festivals in the same way that other people would save up for holiday,” Harrington said.

“We’ve got a huge amount of evidence on that to share with the Gambling Commission. The wording is also around net losses, so we know some of our customers might use their winnings from a major festival to fund their punting for the remainder of the year – how will those checks take that into account?

“Particularly the 90-day threshold, you could still be losing money in July that you won in March. It’s a detail that we need to get some context on.”