Everyone in the UK has grown tired of waiting for the gambling review white paper. The government has been promising its publication for a couple of years now. Yet, we’re still left wondering when it will arrive and what it will include.
Any gambling reform is likely to have an impact on the industry, be that good or bad. Gambling operators, players, regulatory bodies and so on will be looking on. Indeed, it could affect all sports sectors within the United Kingdom once it does come to pass. Could there be one area that suffers more than the others, though?
In February, the UK government published plans to reform football governance in the EFL. Ministers are under pressure to publish the white paper before the end of March. At that point, the Easter recess for the government comes into effect. British horse racing could very much be under threat from its publication, though. There is a certain need for clarity on the reform scheduled to take place. Until the publication of that white paper, there is a feeling of unease within the industry. Why could the horse racing sector suffer more from the review?
Strong Link Between Horse Racing and Gambling
Throughout much of horse racing history, gambling has very much gone hand in hand. Most people choosing to go to a horse racing meeting would often engage in betting on the races. That remains the case today. A large number of people visiting the racecourses and watching on television are also bettors. They have a punt on the races, even if they’re newbies. It’s all considered as part of the horse racing experience for people. This works in an ideal way for the industry, too. Why? Because horse racing receives funds from the gambling sector.
A report commissioned by the Betting and Gaming Council (BGC) in 2021 focused on this. It revealed that the industry receives about £350 million per year from the gambling industry. This occurs via sponsorship, media rights and even betting levy payments, too. While that is also the case for some other sports, horse racing has a lot of reliance on it. As noted, it’s something that has been the case for many, many years now. Gambling reform could threaten to disrupt that setup.
If gambling reform tightens the rules on sports betting, that sum of money could fall in a dramatic way. Horse racing needs people to bet on the events. Few people choose to watch or visit the races without betting on them and if less people have the inclination to gamble on races, less money goes to the sector.
The UK government launched its review of the Gambling Act 2005 in 2020. That act is what currently provides the horse racing sector with its influx of money. The review has been commissioned to examine online restrictions, marketing and more. Also, the review was to consider the protections that online gamblers have. That focuses on betting stakes and their spending limits, as well as advertising and offers. While this is may be a good way to tackle problem gambling in the UK, it has a knock-on effect, too.
In March of 2022, then-Chancellor Rishi Sunak raised concerns from the horse racing sector. He submitted more than one letter to his ministerial colleagues on the topic. The Department for Digital, Culture, Media and Sport (DCMS) are dealing with the review, as they were then. In his letters, Sunak commented on the intent to introduce affordability checks. This would see gamblers have to prove they can afford to gamble.
To do so, they would need to submit private bank documents to the sportsbooks. Many people wouldn’t be comfortable in providing such to gambling companies. Therefore, some would likely wouldn’t continue with betting or would turn to offshore companies. That means their money is going elsewhere and not to the UK horse racing industry – it also means the customer has no protections whatsoever.
Earlier on in 2022, one professional punter had his say on the matter, too. Neil Channing spoke to Luck On Sunday about potential consequences of reform. He said it serves as an “existential threat” to the horse racing industry. Channing pointed to the negative outcome that affordability checks and betting restrictions offer.
“It isn’t a superlative, it isn’t hyperbolic. I really believe it”, Channing said about his comments. Various bookmakers also voiced their own similar concerns on affordability checks. They spoke of people choosing not to bet on horse racing if they have to send in 12 months of bank statements etc.
Many believed the Gambling Commission could introduce the affordability checks back in 2021. Yet because of the mass of responses to the conversation, the regulatory body shelved it. Instead, Channing said, they made way for the politicians to add it to the reform act. While that served as a victory for the horse racing industry at first, it has a new fight to tackle. It now has to make sure it isn’t in the gambling reform white paper.
Reformers Suggest No Proof of Threat to Horse Racing
Of course, there are people who are lobbying for gambling reform in the UK. It is these campaigners who have pushed the government to review it in the first place. Reformers have voiced their concerns over the liberal nature of the gambling industry. This has been the case for several years, too. Their initial fervour over the reform white paper has been dashed thanks to the various delays. This has led to many of them condemning the UK government.
These lobbyists say that there is no real proof that reform will affect the horse racing scene. At the same time, they negate the idea that people will stop betting on horse races with law changes. They also highlight that there is a lack of information on this topic. This is something that Channing takes issue with, though. On the topic of sending in affordability documents to sportsbooks, he says:
“…when you talk to people, say, for example, Entain, they have asked all of their VIPs to send in this information and 95% have just walked away and said ‘no, I’m not going to do it’”.
There could be a flaw in Channing’s other argument, though. Speaking on the similarities between gambling with smoking or alcohol, he said:
“People are generally healthier if you don’t smoke or drink. You can gamble every day of your life and have no problem whatsoever on your lifestyle and it is a pleasurable activity”.
He then highlighted that the government doesn’t get involved in people buying online. He said anyone can spend money online at a cost to them and their family. The government doesn’t invade people’s privacy with this spending. He argued, why do they get involved in gambling spend?
The issue with that argument is that research has taken place into gambling addiction. Estimates suggest that around 430,000 people in the UK are compulsive gamblers. In February of 2022, the NHS launched new gambling addiction clinics. This was to be able to cope with demand for such services. It is clear that an issue exists when it comes to gambling. Whether that’s an addiction to sports betting, casino gaming or anything else. There is no doubt that gambling addiction exists.
Campaigners believe that stricter laws will help to curb the addiction problem. Yet there could also be a flaw in their desires for gambling laws in the UK. This may stop people betting as much or betting at all. Yet some believe it will actually push betting underground instead.
Underground Betting Could Flourish Instead
If people cannot bet on the things that they want in a legal sense, this pushes them elsewhere. A survey conducted by Racing TV in December of 2021 spoke with people on this. It revealed that over 86% of respondents believed affordability checks could benefit black market betting. Channing gave his take on this as well, stating:
“What’s happening now, in modern times, is WhatsApp bookies and it is a massive thing. Some of these will be licensed operators who say ‘come and bet with me, do it through WhatsApp and do a screenshot of something and that you fancy £100 on it, and you can have it”.
He noted how such companies hold licences, so it’s a fine way of conducting business. They have to pay taxes, and the taxes are a lot bigger than large operators. Yet Channing also spoke of a selection of operators providing betting from abroad. VIPs and other bettors have their attention diverted to foreign-based platforms. No taxes from such operations go towards the UK economy or, in turn, to horse racing. Straight up illegal gambling also exists already, and this will likely flourish.
“Lots of people I speak to have been pushed into the black market because they can’t get on…”, Channing stated.
The stricter gambling measures from bookies in recent years have had positive and negative effects. Highlighting problem gambling has been of great help to many people. Anyone is now able to gain free, confidential aid from organisations like BeGambleAware.
Will horse racing be able to adapt to the new rules supposedly on the horizon? Or will it suffer extreme losses that could see the sport sink? It all depends upon what is in the reform white paper.
While many rumours have circulated about what is in it, nothing is clear yet. It’s difficult to point out what will affect horse racing because the rumours are rumours at this point. It’s clear that there is the potential for the sport to suffer a crushing blow, for sure. It depends on the funds that come from the gambling scene. Without such an influx of money, it will need to adjust. Could it find an alternate source for that money?
The gambling industry is a big one. In 2021, the gambling industry contributed £7.7 billion to the UK economy, reports suggest. £350 million of the money from gambling goes to horse racing. Yet if the first figure falls, so too does the latter one. Without a doubt, there are other organisations that make money in the billions. Yet gambling and horse racing have a close relationship. They benefit each other.
If we look at the company making the most money in 2022, we have to turn to Shell. The multinational oil and gas company made around £213.84 billion in 2022. Yes, that could filter a massive amount of money into the horse racing industry. Yet what cause would it have to do so? Shell and horse racing have no mutual benefit by the former supporting the latter. Tesco supermarket was also a big earner in 2022, but the issue remains the same. There is no connection between a supermarket brand with horse racing. Gambling is very much a necessity for the horse racing industry in its current form.
For the time being, horse racing can only wait and see what gambling reform brings. It is then that it will need to figure out how it will adapt should there be negative consequences.