Data suggests more punters could be impacted by enhanced financial checks than originally claimed

Data released by the Gambling Commission last week indicates the proportion of bettors set to be impacted by the government's proposed system of enhanced financial checks could be up to twice as high as initially estimated if implemented at the original thresholds.

If that proved to be the case, it would have a commensurate impact on the cost of checks to racing, forecast at £14.9 million a year in last year's gambling white paper but a figure which the government has already said it is revisiting amid claims it is a considerable underestimate.

The Gambling Commission last year secured open banking data from YouGov Finance which included the details of banking transactions from 4,000 individuals in Great Britain, each of whom had given their consent for their data to be used for research.

It comprised more than 12 million individual transactions, of which 253,916 were non-lottery gambling, by 2,034 unique gamblers with at least one year of transactions available for each customer for the period up to August 2023.

The government's gambling review white paper published in April last year set out proposals for two tiers of financial or affordability checks conducted when punters meet certain net loss triggers.

The thresholds for the lower tier of vulnerability checks were originally set at £125 in a rolling 30-day period, and £500 in a rolling 365-day period, while for the second tier of enhanced financial risk assessments the thresholds were £1,000 in a rolling 24-hour period, and £2,000 in a rolling 90-day period.

• New interim affordability code introduces £25,000 threshold for submitting financial documents 

Net deposits to gambling brands were used as a proxy for exact wins and losses for each gambler in the open banking data and then compared with the proposed thresholds in the white paper to identify every individual who would have triggered a check had the policies been in place.

The white paper stated that Gambling Commission data had suggested 20 per cent of accounts would be subject to a financial vulnerability assessment and around three per cent of accounts subject to an enhanced check.

While the open banking data released last week dealt with individuals rather than accounts, it found that 120 of the 2,034 gamblers would hit either or both of the triggers for enhanced checks, or 5.9 per cent, nearly double the three per cent rate set out in the white paper.

If that figure was replicated in the general population when the proposed system of frictionless enhanced checks goes live, it would have major implications for racing given the impact assessment the government carried out was based on the three per cent forecast.

The Gambling Commission said the data sample under-represented some groups such as those over 50 years old, a generation racing's audience draws heavily from. The commission warned the data, which also over-represented gamblers and certain groups such as men, should not be used to draw conclusions about the wider population.

A commission spokesperson said: "As stated in the open banking data report, the data is not demographically representative and uses specific definitions for the purposes of the research, so you cannot directly extrapolate from the numbers of individuals exceeding thresholds in this report to the gambling population more generally or in relation to thresholds which may be defined differently.

"The data can be used to compare different thresholds within the sample itself."

The Department for Culture, Media and Sport estimated the impact for the first year of the new regime of affordability checks on British racing's finances would be in a range between £8.4m and £14.9m but racing's leadership believes it is closer to £50m a year for the next five years.

The government said it would review the levy system to ensure racing did not suffer financially from the other proposals but talks between the sport's leadership and bookmakers have not managed to come up with a voluntary deal. Ministers have said they will update parliament on the progress of the talks on or before May 22.

Read these next:

'The whole thing hasn't gone away' - wary response to Gambling Commission's six-month pilot for affordability checks 

Affordability checks: everything you need to know from the Gambling Commission's consultation 

Explainer: how the new interim code for affordability checks will work in practice 

Subscribe to Racing Post Members' Club Ultimate Monthly and get 50% off your first three months!

Available to new subscribers purchasing Members' Club Ultimate Monthly using code MEMBERS24. First three payments will be charged at £24.98, subscription renews at full monthly price thereafter. To cancel please contact us at least seven days before subscription is due to renew.