UK Racing Industry Worries Affordability Checks Are Existential Threat

June 9, 2022
The prospect of UK affordability checks curbing profit makes many gambling companies nervous, but it is an existential issue for the horseracing industry, according to at least one executive.


The prospect of UK affordability checks curbing profit makes many gambling companies nervous, but it is an existential issue for the horseracing industry, according to at least one executive.

If enough bettors, or “punters”, baulk at being asked to prove they can afford their bets, the British racing industry is in big trouble, said Scott Ferguson of BetMakers Technology Group.

“Punting is what funds it,” he said, claiming that by international standards, British racing prize money is already paltry. “No punting, no sport.”

Asked for bank statements, “90 percent of people will say, fudge off”, joked gambling consultant Aideen Shortt, who was moderating a panel at the SBC's Betting on Sports Europe conference on Wednesday (June 8), which continues today in London.

The panel title suggested that affordability checks are the proverbial “sword of Damocles”, that is an impending disaster waiting to happen.

A white paper on a planned updating of the UK’s 2005 Gambling Act is due soon and whether it will include mandatory affordability limits for players, and at what level they might be set, is an obsession for many licensees.

Take the punter who saves up all year for the popular Cheltenham races, and otherwise does not gamble, Ferguson said.

That gambler has an erratic betting pattern and, taken out of context, it looks as if they cannot afford that once-a-year habit, he said.

If affordability checks kicked in at £250 per month, “at Cheltenham, [bettors] will hit that on Day One, Race 4”, said William Woodhams, chief executive of Fitzdares.

Woodhams said at his company, which specialises in big spenders, he spoke to four clients in a week who said they were now doing 60 to 70 percent of their gambling with offshore operators.

But according to one payment processor, affordability checks should be no reason to panic.

Technology and data approval should allow gambling companies to seamlessly check bankruptcies, payday loan applications, mortgage payments and more, said Ben Wade, head of gaming at TransUnion credit reporting company.

Open banking, which allows third-party access to consumers’ transactions and other financial data with their consent, will facilitate the checks, according to Charles Cohen, chief executive of Department of Trust, a company which specialises in affordability checks.

“It’s the 21st century solution to having to ask people for their bank statements,” he said.

Cohen compared industry concerns about the intrusiveness of affordability checks to controversies in the gambling industry 10-15 years ago over ID verification at time of registration for gambling.

Previously, gambling companies did not verify ID until a player won, a practice forbidden in the UK today.

In the future, if players want to gamble, “some degree of financial disclosure will be expected”, he said. “It will take time, it will take a few years, but we’ll get there.”

Ferguson, however, argued that gamblers have an “inherent distrust of bookmakers” and may baulk at offering up their data.

“It has to be seen to be done by an independent body,” he said.

Gamblers will ask “Why are they asking? What will they do with it?”, Shortt said.

But Wade claimed that young people are used to sharing data when there is a “clear value exchange”.

“We’re moving into a world where there’s less nervousness than you think,” he said.

The payments industry is already in a position to implement any affordability threshold the government comes up with, Wade said.

But Cohen cited another complication.

The Gambling Commission has been fining operators for letting players gamble that it believes could not afford their bets, and it is also sending out letters setting specific numbers for affordability limits, he said.

“What’s interesting is, every letter has a different number,” Cohen said. “What are the goalposts?”

Woodhams was also sceptical that credit reporting companies could offer adequate financial data on affluent gamblers.

“It’s incredibly complicated,” he said. “It turns out rich people don’t keep £50m in a bank account”, their assets are in many different places.

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