British Horseracing Authority chief executive Brant Dunshea was left 'hugely disappointed' by the Gambling Commission's decision to implement Financial Risk Assessments.
Bookmakers and British racing’s leaders have long expressed their firm opposition to the affordability checks scheme following a pilot programme, arguing its introduction could cost the sport around £250million in funding over five years as it drives more punters to the growing black market.
And on Tuesday afternoon the BHA chief warned: "Rather than protecting consumers, these checks will have the opposite effect: driving more customers to the illegal market – which puts them at much greater risk of gambling-related harm – and starving the Treasury of much needed tax revenue."
No date has been confirmed for the start of the FRAs, with implementation groups being established over the summer.
The Gambling Commission say the first stage will see FRAs carried out by the largest operators where a £5,000 net deposit in a rolling 24-hour period is met.
Once fully implemented, they will be applied to customers aged 25 years or older with net deposits exceeding £1,000 in a rolling 24-hour period or £3,000 over a rolling 90-day period; for those under 25, these thresholds will be reduced to £750 in a rolling 24 hours or £2,000 in a rolling 90 days.
In his statement Dunshea said: "We are hugely disappointed that the Gambling Commission will implement affordability checks which will have severe financial implications for British racing and the UK economy and subject racing bettors to unwarranted levels of intrusion.
"Over a number of years, and through several consultations, British racing has engaged in a spirit of huge goodwill to honestly advise the Government about the potential impact this policy would have on our sport and its fanbase.
"These concerns were shared by the betting industry, politicians, campaigners and policy makers, who warned of devastating unintended consequences on two major industries that are worth billions of pounds to the UK economy and employ more than 200,000 people across Britain. We understand these checks have been proven by the Gambling Commission’s own pilot to not be ‘fully frictionless’ as originally promised by successive Government ministers.
"Rather than protecting consumers, these checks will have the opposite effect: driving more customers to the illegal market – which puts them at much greater risk of gambling-related harm – and starving the Treasury of much needed tax revenue.
"Objective evidence from across the globe makes clear that this decision is one of self-harm on an immense scale that will have damaging economic and societal implications.
"For this decision to be taken unilaterally by the Gambling Commission shows a clear abdication of duty by the Department for Culture, Media and Sport, which has failed to grip this process or properly consider the damaging consequences of the decision. A policy decision of this magnitude needed to receive parliamentary scrutiny, especially when other policies from the 2023 Gambling White Paper were passed via legislative routes.
"Sadly, this is the latest in a long chain of events that shows how little the DCMS has done for the country’s second-favourite sport. This includes its failure to reform the Horserace Betting Levy, despite clear evidence that demonstrates British racing needs a higher annual yield to remain internationally competitive. This has all been at a time when we see other Governments around the world committing significant effort and resource to promoting their horseracing industries.
"Perhaps most concerningly, this policy has now been signed off for implementation without key stakeholders in racing and betting being able to see vital evidence such as the NatCen’s independent review of the pilot. Members of the implementation working groups – which the Gambling Commission are setting up in advance of the first stage of the checks being rolled out – will not even be privy to this evidence given that the Commission are not publishing its full consultation response on the pilot until the autumn.
"The pilot has highlighted issues that must be resolved, including Credit Reference Agencies producing different results for the same customer. Unambiguous guidance also needs to be provided to operators, so they do not need to take an overly cautious approach once a customer has been flagged.
"No attempts should be made to implement affordability checks before these glaring issues and processes have been worked through.
"It is also essential that the Commission significantly improves its communication with stakeholders as this policy now moves forward to the implementation phase as there has been a distinct lack of information provided throughout the latter stages of the process.
"We would like to thank racing supporters for time and again lending their voice to campaigns against this deeply unpopular policy. A very clear message was sent through petitions, rounds of letter writing campaigns, as well as dozens of political and official meetings secured by British racing, that this policy should not be introduced.
"We will now seek to work with the DCMS, the Gambling Commission and the betting industry to find ways to mitigate the worst impacts of this policy. The former have repeatedly insisted that this policy, in light of the severe loss of turnover that British racing has already experienced due to ongoing document checks, will be better for our industry. It is very clear that, once implemented, an independent evaluation of this policy will be required to see whether that has indeed been the case."
Reaction from Betting and Gaming Council
Commenting on the news, Grainne Hurst, Chief Executive of the Betting and Gaming Council, said:
"We are deeply disappointed and frustrated that the Gambling Commission has decided to press ahead with Financial Risk Assessments despite the significant concerns raised over the last 18 months by the BGC, operators, racing, parliamentarians and customers.
"The fact that the Gambling Commission has delayed implementation, raised thresholds and abandoned its original timetable is a clear recognition that the concerns raised by the BGC and others were well founded. Unfortunately, the central issues around reliability, consumer impact and the practical operation of these checks remain unresolved.
"The Commission has failed to address the fundamental issues identified during its own pilot. It has not demonstrated that the data underpinning these checks is accurate, reliable or consistent enough to support regulatory decisions affecting customers.
"The pilot exposed inconsistencies in the information returned by credit reference agencies, with the same customer potentially receiving different outcomes depending on the provider. Customers risk being wrongly identified as financially vulnerable based on a system that remains unproven. That is not a sound basis for regulatory intervention.
"The Commission has yet to publish a full evaluation of the pilot, so neither the industry nor the public has seen the evidence needed to justify introducing these checks.
"These checks cannot be described as genuinely frictionless if they produce unreliable outcomes, lead to unnecessary account restrictions or ultimately result in customers being asked to provide documents or open banking information.
"While the Commission has announced implementation groups, it has given no indication that they will resolve the outstanding questions around reliability, consumer impact and how the system will operate in practice.
"We support evidence-led, proportionate regulation that protects vulnerable people while allowing the 22.5 million adults in Britain who bet each month to do so safely. But until the Commission can demonstrate these checks are accurate, consistent and genuinely frictionless, our fundamental concerns remain, including the risk of driving customers towards the growing illegal gambling market."
Gambling Commission 'confident' approach is correct
Sarah Gardner, Acting Chief Executive of the Gambling Commission, said: "We are confident that our approach, using high-quality data, will enable support for high-spending customers in financial difficulties, while reducing friction for customers who are not in financial difficulties by removing the need for unnecessary and unpopular document checks to understand financial risk.
“We have listened to feedback throughout the pilot process which has led to us deciding to carefully proceed. We will work with key partners to make sure that they are implemented in the most effective way for consumers and operators."
Gambling Minister Baroness Twycross said: "I welcome the Gambling Commission's decision to implement financial risk assessments in a careful, phased way. Attention must now turn to successful implementation, so that financial risk assessments work for consumers, gambling operators and the wider ecosystem.
"The right balance must be struck so that assessments protect those in financial difficulties from the risk of gambling-related harm but do not create unnecessary burdens for the industry or consumers."