Flight to the black market ‘almost inevitable’ with affordability checks


Flight to the black market ‘almost inevitable’ with affordability checks.

After the Racing Post revealed that one in six respondents to a major survey reported being asked by a bookmaker for their financial documents, the scale of affordability checks on racing bettors has been described as “surprising and disproportionate” by a leading industry analyst.

Given the extent to which bettors are being impacted by the intrusive and unpopular checks, Regulus Partners’ Dan Waugh also stated that the migration of punters with higher stakes to operators operating on the black market was “almost inevitable.” Regulus recently estimated that 20% of UK racing turnover has already shifted to the black market, resulting in a loss of £80 million annually in betting revenue.

More than 10,000 people responded to The Racing Post’s Big Punting Survey, which asked about a wide range of topics affecting racing bettors in Britain and Ireland. 16.6% said they had already been asked to provide pay stubs, bank statements, and other forms of documentation proving they could afford to bet.

Waugh, a consultant on gambling regulation and safer gambling who has frequently testified before parliamentary select committees, compared the scale of gambling-related harm to the prevalence of affordability checks highlighted in the survey.

“The problem gambling rate for people who bet on sport online is microscopic if they are not also doing online casinos or products like that,” said Waugh. “Horseracing has a lower problem gambling rate within sports betting than some other products.

“I think that 16 per cent of readers being asked for documents is surprising, even though readers of the Racing Post are more engaged in betting than general sports bettors. It does seem to be that a disproportionate percentage of racing bettors are being caught by these checks, given what we know from health surveys about the risks.”

In addition, the survey revealed that 3.6% of respondents knew someone who had used a black market bookmaker in the previous 12 months. Segmented data suggested that younger people and bettors with larger stakes were more likely to use illegal websites and products without licenses.

Waugh emphasised the dangers of losing higher-stakes bettors to the regulated market, which would have a negative impact on racing’s finances and cost the UK Treasury tax revenue.

“If you take the view that the Gambling Commission has been putting pressure on licensees to conduct affordability checks at relatively low levels of expenditure, then higher-staking customers are caught by that,” said Waugh. “I think it’s almost inevitable that higher-staking customers have greater incentives to go to unlicensed operators.

“Affordability checks are not the only reason; unlicensed operators don’t pay taxes and might be able to offer more generous inducements. But if you look at things that are changing then it seems highly plausible that higher-stakes customers are more likely to seek out unlicensed providers.”

The BHA on Thursday welcomed the Post’s survey as “an important piece of research that demonstrates the impact certain measures can have and the risks they pose to racing”.

Throughout the lengthy Gambling Act review process, the racing governing body has consistently made representations to the government, advising that affordability checks will drain the sport’s financial resources.

In a video address to the Thoroughbred Industry Employment Awards in York on Monday, Prime Minister Rishi Sunak praised racing’s economic and cultural impact on Britain. The British Horseracing Association (BHA) said that the Big Punting Survey presented yet another persuasive argument that should be taken into consideration by policymakers before the white paper is released.

A BHA spokesperson said: “The BHA has engaged extensively with UK government ministers and officials, as well as the Gambling Commission, setting out the unique relationship between racing and betting and seeking to reduce the risk of damaging, unintended consequences arising from this review for betting customers and the industry. We do not support blanket measures on affordability and believe that if measures are to be introduced, they should be proportionate, targeted at the individual and reflect their specific circumstances.

“This is an important piece of research that demonstrates the impact certain measures can have and the risks these pose to racing. We will strongly encourage government and policymakers to take this data on board as part of the Gambling Act review, which needs to be concluded as soon as possible.”



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Sports minister Stuart Andrew to take on gambling brief.

As the government’s gambling white paper waits, sports minister Stuart Andrew will assume the role of gambling minister.

The MP for Pudsey, Horsforth, and Aireborough in West Yorkshire, Andrew, is expected to succeed Paul Scully in the position. He will become the sixth minister in charge of the white paper since the government began its review of gambling legislation in December 2020.

Andrew, who started working for the Department for Culture, Media, and Sport (DCMS) in September, hasn’t talked much about horse racing or gambling.

However, he was criticised for paying Paddy Power £1,961 to host England’s 2-0 victory over Germany at the most recent European Championships at Wembley Stadium in 2021.

There have been numerous delays in the government’s gambling reform proposals, which are expected to include details about their plans for the contentious issue of affordability checks.

The most recent occurred this month when, as part of Prime Minister Rishi Sunak’s reorganisation, Scully was transferred to a different department.

Leadership in the racing and gambling industries, where he had been willing to listen to their concerns, saw his departure as a blow.

As part of the most recent reshuffle, the former culture secretary Michelle Donelan also left the DCMS to be replaced by Lucy Frazer, whose South East Cambridgeshire constituency includes the July course at Newmarket and the National Stud.

The DCMS has yet to officially confirm Andrew’s appointment, but it would allow the publication process for the white paper to resume, with officials hoping it will be available before the Easter break at the end of March.

A statutory levy on operators to fund research, education, and treatment of problem gambling, advertising and sponsorship by gambling companies, and lower stakes for online slot games to mirror those found in brick-and-mortar establishments are expected to be covered in the white paper in addition to affordability checks.



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‘An open goal for illegal bookmakers’ – integrity expert warns on affordability checks.

A senior executive of the Hong Kong Jockey Club who is well-versed in illegal betting has informed a global audience of racing leaders that affordability checks are providing black market bookmakers with a priceless open goal.

An Asian Racing Conference session in Melbourne featured a presentation by the HKJC’s executive manager of racing integrity and betting analysis, Tom Chignell, who discussed the unstoppable expansion of unregulated operators and their growing desire to attract racing punters.

Chignell made a direct connection between the intrusive bookmaker-imposed checks that are driving punters away from the regulated market and eating into the finances of British racing after his HKJC colleague Doug Robinson warned that illegal betting, which is frequently linked to wider crime and money laundering, represented “the number one threat to the integrity of racing.”

A member of the Asian Racing Federation Council on Anti-Illegal Betting and Related Financial Crime, Chignell stated: It seems to be a huge problem right now in the UK, in my opinion. Not only are affordability checks driving recreational gamblers away from regulated businesses, but they are also almost directly driving them to the illegal betting market.

“Can you get a bet on? Can you get fair odds? Can you bet on the sport and product you want to bet on? If you can’t, these are three major incentives to push the customers racing wants to attract – the Saturday gamblers to the illegal betting market.”

Hundreds of punters have complained to the Racing Post about being asked to hand over a slew of personal financial information to bookmakers, who have repeatedly lowered the bar at which checks are initiated out of fear of being fined by the Gambling Commission, despite repeated delays to the publication of the UK government’s white paper on gambling reform.

Racecourse Media Group revealed on Sunday that a survey of 3,500 Racing TV members found that 15% of respondents either bet or know someone who bets with an unlicensed firm. The regulator has attempted to downplay the extent to which frustrated punters are turning to the black market.

Chignell added: “The concern is that while Britain has had a diverse regulated market, and although people have sometimes struggled to get bets on with bookmakers because they have been successful and therefore had to spread money across the regulated market, you now have reports of people in betting shops being asked for financial information like three months of bank statements. People don’t want to do that, which means this is a real opportunity for the illegal market to target those individuals.

“When the last Asian Racing Conference took place in South Africa three years ago, there were a few smaller operators who had started offering fixed odds on horseracing. That number is growing and we are now seeing more significant Asian-facing companies doing it. Those companies are being given an open goal to make inroads into what was a regulated market.”



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