This article had originally been planned as an analysis and commentary of the Westminster Hall debate on Affordability on the 26th February 2024, prompted by an e-petition set up by the Jockey Club gaining over 100,000 e-signatures in record time. Since the Betting & Gaming Council (AGM), the trade association of the big operators in the gambling industry, held their AGM on the 29th February 2024, it seemed to be prescient to consider both events at the same time. I should state from the outset that I didn’t attend either meeting, for the Westminster Hall debate I read the Hansard transcript, for the BGC AGM, who have provided neither transcript nor video (or invitation), I have relied on the comments of people who were there. The commentary is simply my own as I come to the conclusion that what we’re seeing is a regulatory stitch up.

 

For those of you just wanting to understand the title, the headline is that in the three hour Westminster Hall debate, 14 Tory MPs, mostly (10 of 14) representing racecourses in their or near their constituencies, the rest being betting and racing fans argued to have the proposed Affordability checks abandoned due to the damage they would wreak on racing’s finances. Notably this was a cry for help from racing, gambling has been nowhere to be seen in this debate.

 

Obviously well briefed, racecourse MPs pointed out that racing’s finances were in a perilous state already and that the new intrusive financial checks would drive the more robust punters to the black market. These robust punters provide the majority of betting revenue and therefore the majority of Levy, the tax on betting on horseracing that primarily funds racing’s prize money. A drop of c.£50M is predicted and this could prove existential to the sport.

 

Arguing against the motion were the usual crackpots from the All Party Group on Gambling Harms whose arguments were as usual far from evidence based and in a number of cases simply factually inaccurate. The government responded that racing would be looked after with a new Levy deal and that the financial checks would be both targeted and frictionless.

 

Three days later and 322 meters away at the Institute of Civil Engineers, the Betting & Gaming Council held what was described as a ‘chumocracy’ between the big operators, the Gambling Commission and DCMS, all happy with Affordability and all believing that it would be targeted and frictionless.

 

It is completely understandable that the big operators welcome Affordability as they have fully supported it almost from the start, as seen by the performance of the likes of Kenny Alexander, CEO of GVC (now Entain) and Conor Grant, the COO of Sky Betting & Gaming at the 2019 witness session of the House of Lords Select Committee on the Social and Economic Impact of the Gambling Industry (look it up on YouTube). This was at the same time that these companies became founding members of the BGC, who would adopt a mostly positive tone about Affordability from then on, with the occasional concern about the black market and the need for it to be targeted and frictionless. A cruel comparison would be that of Vichy France, with an acceptance of the inevitable imposition of the rule of their autocratic masters.

 

Hence the title, the Stitch is in. Stitch being Stitch Up. The most unnecessary, intrusive over reach of regulation ever and the one body supposedly there to stand up for the gambling industry that will be forced to impose it on its customers and push thousands out of the black market and destroy British racing, welcoming it with open arms. All because, as has been alleged there was no stomach for a fight and has also been alleged, the BGC’s stomachs were more interested in fine dining than defending the industry they are supposed to fight for.

 

One does think that the only reason the BGC rolled over so supinely for could have been as a deal for keeping gambling legal, but as prohibition has never been an option, however much the Gambling Commission has menacingly threatened, there can only be other possibly more nefarious reasons.

 

So where we are is that we move forward to a series of pilot studies to look at how the data is collected and used and then, just in time for a General Election and the issue becoming the Labour Party’s, we will undoubtedly have Affordability in full force and the first stage of the Gambling Commission’s mission to significantly reduce the amount of regulated gambling in this country is complete. Questions about how targeted it is and how frictionless will undoubtedly have been forgotten. Other restrictions will then follow, ending advertising and bonuses and the British gambling industry will never be the same as again as the black market explodes.

 

As with all Parliamentary debates, the one in Westminster Hall included much that is just variations of the same briefing notes with a bunch of waffle about how wonderful local constituencies are and the MP’s own experience and/or link with the topic at hand. The racecourse MPs performed perfectly in this role but what stood out was three things that were concerning.

 

Firstly, it did seem that the Members’s experiences were based solely on racecourse hospitality, enjoying the theatre that a day at the races brings. This does mean that the prism they see racing and betting through is a gilded one and not the reality that most consume their racing from the TV and bet online, this is followed by the betting shop and a long way behind comes the thrill of the paddock and betting in the ring. This led some of the Members from minor parties (Lib Dem & Alba) to come across with my second concern, as awfully condescending about the millions who enjoy their betting off course, almost implying that such an act could only lead to addiction and deviancy and that it was only harmless fun if enjoyed on course.

 

An extension of this and the most worrying of all, was the call by the majority of racing supporting MPs for a carve out for racing, Affordability to be imposed on gaming products but betting on racing to be left alone. The reasoning being that the exceptional level of skill needed to put a bet on a horse means, supposedly, that it is immune from problem gambling.

 

This is plainly ridiculous. I’ve stated before that by claiming gambling product exceptionalism you pander to the prohibitionists. All gambling products are used by those with gambling problems. It is true that gaming products are preferred by problem gamblers due to the frequency of play but the fact is, is that many racing bettors are also problem gamblers and many gamble on horses and slots too. But the main issue is that the prohibitionists argue that it’s the gambling product that causes addiction not, what the science shows, that it’s the mental issues of the gambler which is the locus of their addiction. By arguing for a racing carve out you are supporting the view that products are addictive and so you welcome eventual prohibition. Once they’ve dealt with slots, as they’re trying with the £2/£5 stake limits, they will come for betting eventually. The prohibitionists just want gambling ended, they don’t consider your skill in liking a horse’s name, the colour of the jockey’s silks or it performance three months ago on a different course in different conditions.

 

The next reason why this approach is misguided is it doesn’t give the government an answer to what to do about concerns about problem gambling. Remember, Affordability has no scientific basis and has no precedence, it was invented by the Gambling Commission in 2018 and made a regulatory requirement in 2019 just without the thresholds that are currently proposed. The reason that we have this ad hoc scenario of Affordability checks that we have now is due solely due to the Gambling Commission, something the BGC would have shouted about if it had a spine.

 

The Commission made operators implement Affordability and assess what that level was for each individual customer. As operators were understandably not keen to demand financial disclosure off their customers they used a number of methods that provided less than accurate. This gave the Commission the opportunity to impose massive fines on operators, told them categorically to demand financial documentation (even though Andrew Rhodes would lie misspeak about this in 2022) and then impose on the penalised different processes for implementing Affordability as part of their regulatory settlement. This is why when the Commission removed Affordability in 2022, many firms were forced to continue with it as it was part of their regulatory agreement. This then gave the Commission the argument that the new Affordability regime would simplify matters, again lying dissembling that the regulatory legacy was simply a commercial matter for the industry and not caused by the Commission’s own actions.

 

Come the Gambling White Paper and the Gambling Commission in their advice to DCMS put forward the Affordability regime that is currently about to be trialled. So when Andrew Rhodes describes it as government policy, he again has a mouth full of lies dissimulated as DCMS accepted it practically verbatim. Affordability is the Gambling Commission’s baby 100%. For DCMS, it provides a political answer to the vocal and well-funded minority campaigning about gambling harms and this is where the racing lobby fell down in my humble opinion. By demanding that Affordability be scrapped they gave no ‘get out’ for DCMS to appear to be doing something about gambling harm. Politics is more about being seen to do something than actually achieving anything. To carve out racing because its supposedly exceptional would get laughed out of Parliament for similar reasons. The obvious political answer was to argue that Affordability was unnecessary.

 

In the same regulations that include Affordability are the rules about Customer Interaction. Every operator has to monitor their customers player behaviour 24/7 and look for a comprehensive number of markers of harm. Should these be spotted then the operator has to intervene immediately and take action appropriate to the level of concern. This can mean a player having deposit limits imposed or their account suspended or even closed. This monitoring is far more sophisticated then Affordability checks, is frictionless and targeted and completely achieves what Affordability is bluntly trying to do. Affordability is a big blunt knife while Customer Interaction is a surgeon’s scalpel. The massive question that a possibly un-informed racing lobby and a gutless BGC aren’t asking is why do we need Affordability when we haven’t given Customer Interaction a chance? If racing had argued to delay Affordability until Customer Interaction a chance to bear fruit it may have got more traction.

 

Given that the Gambling Commission has been severely criticised in 2020 by the Public Accounts Committee and the National Audit Office for not doing any evaluation on the effectiveness of the regulations they have imposed, why have they just ignored Customer Interaction and gone straight for Affordability. One answer could be that they are beholden to the Public Health academic activists who want to see gambling significantly reduced in this country to a near prohibition level. Another is because they feel they should be indulging in regulatory creep to keep up with their regulator chums in Scandinavia and elsewhere in Europe who have imposed similar schemes, even though they have created massive black markets consequentially. Both hold true when you appreciate that Affordability is just the first of major regulatory restrictions on our freedom to gamble that are in the pipeline and both reasons make sense when you understand that they realise its all about increasing friction so that people stop gambling. A naïve approach considering how easy it is to gamble on the black market, but this is because these Public Health strategies were designed to stop physical substances (alcohol, tobacco and  so called ‘unhealthy’ food where preventing/hindering their physical supply does impact on demand, albeit not by much.

 

Unfortunately for the good folk of British racing it does look like they will be hung out to die dry with the unnecessary and ideological imposition of this restrictions on freedoms. While the BGC embraces Affordability, the government and the Commission can claim it is being imposed by consensus. Only a cynic would think that the betting operators are happy for Affordability to do their job of closing down successful punters for them, having a world of only recreational punters being pushed to the more profitable casino business with racing, with all its costs being turned into a shadow of its former self with just a Cheltenham and an Aintree to keep things interesting from a turnover perspective.

 

A political analysis of the Westminster debate suggests, given the Minister, Andrew Percy’s bland speech is that the government is happy to mark time on this as it knows its Labour’s problem in just a few months. Percy has announced he’s standing down at the election so he only has to repeat the same bland platitudes about balancing people’s freedom to bet with preventing harm however unbalanced Affordability is, a couple more times at most and he won’t be around when racing and betting duty collapses.

 

This raises another issue for racing, if we take all the speakers in the debate, 7 are stepping down and 8 are predicted to lose their seat. Of the 59 racecourse MPs, 69.5% of the current crop are Tories. The forecasts for this election are that 66.1% of racecourse MPs will be Labour. Labour has little tradition of supporting gambling, outside the Blairite reformers of the Gambling Act who are long gone. Animal Welfare will undoubtedly be more of an issue than people’s freedom to bet, so to keep the new regime happy fences will become privet hedges and whips replaced by vocal encouragement only once the horse has provided written consent to be ridden. Even without Affordability and whatever comes next, racing may be forced to change it product to betting on dressage and so hasten its own decline.

 

Ian Duncan Smith MP, the mad monk of anti-gambling claimed that ‘the gambling companies are not that interested in the success or the future of horseracing per se, but just in how much money they can take out of it’ which may be true considering their lack of interest in the havoc Affordability will cause to its finances, but also is very much part of the prohibitionists hymn-sheet about the supposed rapaciousness of operators. Of interest was the number of MPs mentioning how the operators were closing down accounts purely for commercial reasons and how this was also pushing people to the black market. This debate was definitely not showing the industry in a good light.

 

Also of interest was betting’s greatest champion, Philip Davies MP’s request that the government ‘ensure that any checks will be based on net deposits, not gross deposits?’. The methodology put forward by the Commission will bizarrely force customers to keep winnings in betting accounts and thus increase the potential for impulsive betting and go against all accepted responsible gambling practices. By just looking at gross deposits, the Commission is either just advertising its lack of knowledge about how gambling works or is purposefully trying to ensnare as many as possible in the supposedly targeted and frictionless checks. While you can be certain that Davies has pursued this with the Minister like a dog after a bone, unfortunately in an almost extra existential threat to gambling, Davies is predicted to lose his Shipley seat. A intelligent and genuine amendment to the Affordability debacle may never see the light of day due to the predicted election wipeout.

 

The BGC AGM gave little added comfort. Michael Dugher stated of his branch of the Gambling Commission, pretending to be a trade association, that its job had been to: ‘Not merely to accept change or simply manage change. But to shape it, to influence it, to deliver it’. Thus starting a number of statements made at the meeting where there was no evidence to back the assertion. Affordability is coming in exactly how the Commission want it – there is no evidence that the BGC has done anything but welcomed it with open arms.

 

The Minister, Andrew Percy MP gave the revelation that he made “no apologies for emphasising the importance of the consultations undertaken by the Government and the Gambling Commission. They have given us invaluable evidence to inform policy making. They ensure that the measures are robust, proportionate, and in line with the White Paper’s objectives. And they show that the Government is listening to your views and evidence.” Which was interesting as, as stated above, Affordability was accepted almost verbatim from the advice the Commission gave DCMS and so there has been little evidence of any impact of the consultation, except the repeated mantra that it will have to be frictionless and targeted. Neither of which we have seen any detailed definitions or examples of, especially as there does appear to be a difference between DCMS statement of requiring the checks to be frictionless and the Commission stating they would be in the majority frictionless. The Commission has stated that they will eventually publish their response to the consultation but have given no indication of what happened to the 2022 consultation or to what level of detail the 2023 consultation will be published. The Commission have considerable form for editing consultation responses in a Soviet style.

 

Stephanie Peacock MP, Labour’s Shadow Minister for Sports and Media made the ominous claim that the “UK can set the global standard in gambling regulation of a multi-billion sector”. Is she conflating over regulation with good regulation and does she mean that a global standard will be one of extreme regulation expanding the black market. Labour, as with much of its policies is not giving much detail especially as they will have to deal with the issue within months and its very short odds that Peacock will have different job a day or two after Starmer gets the keys to No.10.

 

Then it was the Commission’s CEO, Andrew Rhodes’s turn. He stated that ‘I hope we have a better, more constructive relationship today than when I first started as Commission Chief Executive almost three years ago’. Was this him admitting the complete capitulation of the BGC and it taking vassalage to his tyrannical rule?

 

Given his statement that the Commission would now be targeting the little guys and maybe this is where the secret deal with the BGC may bear fruit. Obviously, this is just a conspiracy theory, but when we see the tier 2, 3 & 4 operators decimated by over zealous enforcement and the market changes to just the handful of big operators harvesting recreational punters only who just play £1 slots, then maybe the conspiracy theory will have become real.

 

Rhodes did his usual flip flop with the facts as now that Affordability is happening, the black market which the Gambling Commission had continuously claimed didn’t exist, he now miraculously accepts that it does and has said it will be doing what it can to shut it down. Good luck with that. If the largest totalitarian state in the world can’t prevent the good people of Stoke-on-Trent from providing them with betting markets, the chumps in Birmingham stand little chance.

 

To round off what does appear to have been a non-event, Andrew Rhodes was asked twice whether he considered the problem gambling rates identified by the NHS Health Survey which were used as evidence for Affordability as reliable and also the reliability of the new survey for problem gambling that is out in the summer which is expected to come out with a number 10x that of the NHS survey and failed to answer either question. This does suggest that the data used to produce gambling policy has and will be unreliable, thus confirming many people’s beliefs that Commission gambling policy is based on ideology not evidence.

 

And there we have it, as Stephanie Peacock MP stated ‘there is a general consensus on gambling’s regulatory needs’. The fact that punters and racing were very clear in the Westminster Hall debate that this was far from the case. What it shows is that the BGC do not represent the customers of gambling companies or the those who provide such key content.

 

We’ve known that the Gambling Commission has been anti-gambling since it adopted the Public Health approach of significantly reducing the overall amount of gambling since 2018. The evidence of overzealous regulation causing a black market can be found all over Europe but this does not matter to the Commission or BGC. The real question is whether what we need is a new trade association for operators unhappy in seeing their representative at the policy table rolling over and welcoming every restriction. As a case in point, Brigid Simmons the outgoing Chair of the BGC complained about the industry being removed from any input into the research, education and treatment funding. Considering that the BGC warmly welcomed this move, the mandatory Levy, one does have to question how the organisation is run.

 

What we have seen with these two debates, is a complete lack of push back by the BGC on the first of a number of measures that will transform the British gambling industry into a shadow of its former self. We need a new trade association and we need to challenge at every step the Gambling Commission’s zeal to close down regulated gambling in this country.

 

*There may be some editing required where the words go funny 

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**Thanks to William Woodham, Lydia Hislop and Ted Menmuir for the background quotes and commentary from the BGC AGC. All comments and opinions are purely mine and do not in any way reflect anything they may have said or written.

 

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