Affordability Checks Expose Flaw in British Racing's Business Model 

These are challenging times for British punters. If you win too much, your bookmaker could shut you down. If you lose too much, the state might send Big Brother in.

This pincer of control and interference in online betting is weirdly at odds with the UK's economic culture, which favours deregulation and free markets – often to society's cost. The way power works, you will hear a lot more about the Gambling Commission's proposed affordability checks than you will bookmaking conglomerates restricting how much punters can stake – and the sums they can win.

Arbitrary bookmaking 'limits' drive successful punters to distraction. Turned away from one betting window, they're on an eternal trudge to find another. We've all heard stories of gamblers wanting to place £500 on a horse and being told they can have only £50 at the advertised price. Laissez-faire would be a generous description of how mass-market sports betting is controlled. But affordability checks? The world is up in arms.

The roots of the outrage are twofold. Punters, bureaucrats and the Racing Post (an uber-campaigner against the Gambling Commission's plans) are right to point out that all of us gamble every day, on stocks and shares, mortgage rate changes, savings account returns, the National Lottery, Premium Bonds and any number of monetary judgment calls.

In all cases those markets are 'regulated,' but government taps on the shoulder are rare. Yet, in horserace betting, the UK government, via the Gambling Commission, has developed a curiously fierce interest in vulnerable citizens, while also laying waste to many of the public services on which people on low incomes depend.

Personal freedom aside, this is where the industry's panic spikes – the realisation that affordability checks will undermine a funding system that was never fit for purpose

Media outlets like to call this the Nanny State. But under modern Conservatism, the nanny was fired years ago. Britain is an economic free-for-all. In the original white paper on gambling, though, we encounter language redolent of the country's wrecked social contract. It proposes intervention “if a customer's gambling is likely to be unaffordable and harmful” and identifies three types of risk: “binge gambling, significant unaffordable losses over time, and financially vulnerable customers”.

Who knew compassion still had a say in Westminster? Racing, though, sees only illogicality, arbitrary intervention, and great harm to something that's already up against it: the sport's business model, the transfer of breadcrumbs from the betting industry to the racing game that supplies its 'product.'

Personal freedom aside, this is where the industry's panic spikes – the realisation that affordability checks will undermine a funding system that was never fit for purpose. It was the Jockey Club who, in the 1960s, missed the chance to set up a totalisator system to guarantee a fair return to the sport. Instead, they opened the door to a predatory bookmaking industry.

Six decades later, it falls to Nevin Truesdale, the current, impressive head of the Jockey Club, to fix his name to a petition demanding a change in the Gambling Commission's thinking. The petition calls the plans “inappropriate and discriminatory.” The word “catastrophic” is frequently used to describe the damage to racing's finances – £250 million over five years, it is claimed, if punters resort to black markets or abandon betting on racing altogether.

Never has the sport mobilised so furiously against an external threat. Many racing folk would seemingly rather invite an Epsom-invading animal rights protestor round for tea than the Gambling Commission, who claim that only 3% of online betting accounts will be subject to 'frictionless' affordability checks on their online accounts, with only 0.3% facing the more stringent monitoring. A £125 loss over a 30-day period looks to the racing industry however like a pitifully low starting point for the gambling police to go in. 

The Culture secretary Lucy Frazer told the Racing Post: “This government is not in the business of telling people how they can and can't spend their money. But we know, for some, gambling leads to a dangerous cycle of addiction that can feel impossible to escape. We have a duty of care to those at the greatest risk of devastating and life-changing financial losses.” Yet racing says only 2.8% of punters meet the threshold of problem gambling. The many are being restricted, they say, to protect the very few.

Late last week, the anti-Gambling Commission petition had attracted 85,000 signatures. A social media debate ensued (when does it not?) Some called it a show of strength. Others saw it as a faltering quest to reach the 100,000 signatures needed to force a Parliamentary debate; almost as proof of apathy.

My feeling is that the proposed government constraints defy logic and misunderstand horserace betting and bettors. They are also a cop out, because they dodge the need to tackle the main culprit – the betting industry, the siren on the rocks, with its tsunami advertising and simultaneous 'limits' on winnings.

As for racing's panic around the cost of these proposals, consider the most salient statistics of all. In the UK 0.6% of betting turnover is returned to racing. In Ireland – 1.5%; in France 8.6%, America 14.5% and Japan 16.6%. British racing's business model is the flaw that “affordability checks” threaten to exacerbate. Then again, that horse has already bolted.