'The collateral damage is gigantic' - calls for affordability checks rethink on eve of pivotal Gambling Commission meeting

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Figures from racing, betting and politics have warned of the huge consequences for both the sport and the black market if affordability checks are introduced, with the Gambling Commission's board set for a pivotal meeting on Thursday.

The controversial measures, termed financial risk assessments by ministers and the commission, were set out in the last government's gambling white paper in 2023 and were subject to a pilot launched the following year.

The Gambling Commission's board is set to discuss the checks and potentially give the green light for their implementation despite calls for the process to be paused.

The Betting & Gaming Council wrote to the commission's acting chair Charles Counsell last month, warning the pilot showed the checks had failed to meet the promise that they would be frictionless for customers and would instead result in them being asked for personal financial documents. The body raised the prospect of a legal challenge if they went ahead.

• The Racing Post view: case against affordability checks is now unanswerable

Meanwhile, British racing has called for the checks to be paused due to fears they will wipe £250 million from the sport's revenues over the next five years.

Research has shown the increased threat from illegal gambling, with the industry warning affordability checks will further fuel the black market. 

Leading trainer Sir Mark Prescott said: "The unintended consequences we told them about at the beginning were that these would result in a huge increase in illegal betting, and that’s exactly what vulnerable people don’t need access to. 

"They set out to protect them and, instead, have forced them into it. For us, the collateral damage is gigantic. This is an example of the road to hell being paved with good intentions." 

Lord Herbert of South Downs: highlighted to parliament the threat British racing faced

Thursday's meeting was raised in parliament on Tuesday evening by Lord Herbert of South Downs, who highlighted the threat British racing faced.

He told the Lords: "When the previous government announced these checks three years ago, ministers said they should be totally frictionless. The pilots have not been. 

"Immense damage has been done to horseracing already, and to what effect? Bettors resent intrusive checks and are driven to the black market. Racing loses revenue, an estimated £250 million over five years, and so in turn does the Treasury."

He added: "There has been no proper evaluation of the affordability pilots, and it appears that the checks will be green-lighted with no parliamentary debate or scrutiny. 

"Affordability checks are directly contrary to the government’s declared support for racing, so I urge the culture secretary to step in now and revisit an ill-targeted policy which, after all, was not the government’s in the first place."

The threat from the black market, and the risk that affordability checks could drive more punters there, has been underscored by new research.

Figures produced by consultants H2 Gambling Capital claim to show black market stakes are expected to nearly double to more than £33 billion by 2028 from £17bn in 2025, which would mean that almost one fifth of all online betting and gaming stakes could be placed with illegal operators within three years.

Grainne Hurst: black market figures are a "wake-up call"

Betting & Gaming Council chief executive Grainne Hurst said the forecasts were a "wake-up call".

She added: "The lesson for policymakers is clear. If the regulated market is made less competitive through higher taxes or intrusive checks, customers will not stop betting, they will simply move to the black market.

"As the Gambling Commission considers financial risk assessments, it is vital that any checks are genuinely frictionless and targeted. Any policy that unintentionally drives even more customers towards illegal operators will undermine player safety and damage the regulated sector.

"That is why ministers and regulators must avoid measures that hand an advantage to the black market."

That view was backed by Ian Proctor, executive chairman for Flutter Entertainment's UK and Ireland division, who said: "The Gambling Commission risks handing yet another jackpot to the illegal market by rushing these checks through.

"It’s time for the government and regulator to support the legal, licensed and regulated sector and punish the one they admit has worrying links to organised crime. The Gambling Commission needs to pause these checks and think again."

Read these next:

The case against affordability checks is now unanswerable 

Who are the Gambling Commission board members responsible for Thursday's crucial affordability checks decision? 

Glacial progress, substantial problems and no evaluation - why there are huge concerns about the affordability checks pilot 

Racecourse MPs slam insufficient scrutiny and lack of transparency as they urge a halt to introduction of 'damaging' affordability checks 

Bookmakers threaten legal challenge to affordability checks that could mean one in five regular punters are asked for financial documents 

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