Line-by-line analysis of the government's response to the affordability checks petition

More than 85,000 people have signed the petition backed by British racing calling on ministers "to abandon the planned implementation of affordability checks for some people who want to place a bet", prompting an official response from the government. 

Here we publish the key passages of the response alongside our analysis of what it really means, what it says about the government’s policy, and the degree to which it suggests ministers are listening to racing and sports bettors. You can read the full response here.

If and when the petition hits 100,000 signatures, it will be considered for a parliamentary debate – at which point ministers will be grilled on their position by MPs.

Government response: We are committed to a proportionate, frictionless system of financial risk checks, to protect those at risk of harm without over regulating.

Analysis Put simply, the government remains committed to affordability checks. The petition backed by racing had called on ministers to abandon checks, describing them as "inappropriate and discriminatory", but for now at least there is no change in policy.

The government and Gambling Commission recognise concerns some have with the proposed system of financial risk checks for the highest spending online customers to help identify and tackle gambling-related harm. We share the goals that the checks should not overregulate the gambling sector, should not unduly disrupt the millions of people who gamble without suffering harm, and should not cause unnecessary damage to sectors which rely on betting, in particular horseracing.

Analysis The backlash against the government's proposals from both punters and British racing does appear to have been recognised by the Department for Culture, Media and Sport, with the subject having been discussed in parliament on a number of occasions in recent months. The government has launched a review of the levy system to ensure racing does not suffer financially as a result of the checks. However, the sport's leadership had hoped that such reforms would improve its financial situation rather than merely mitigate damage caused by checks.

While the Gambling Commission does not currently have specific requirements or thresholds, we know that operators are applying inconsistent ‘affordability’ checks on a number of customers, often without being clear on why the checks are happening, and normally requiring customers to provide data manually. We have challenged operators to be more transparent with customers in the interim.

Analysis A touch of smoke and mirrors here. The Gambling Commission has always claimed not to have mandated affordability checks, but its previous statements and actions amount to the same thing. As long ago as 2020 a commission report explicitly set out that customers wanting to spend more than the national average should be asked to provide information such as "three months' payslips, P60s, tax returns or bank statements". Operators are also required to determine financial risk levels through the regulator's licence conditions. While the commission does not stipulate exact thresholds in its assessments of operators, it can drive them down by rejecting an operator's proposals. The government's calls for more transparency from operators while the wait for a frictionless system continues backs up recent comments by Racecourse Association chief executive David Armstrong that ministers want a more consistent approach.

The proposed system will be a significant improvement in having clear and proportionate rules which all operators are held to, and allowing for financial data to be shared seamlessly with operators instead of burdening customers with information requests. Both the government and the Gambling Commission have been clear that we would not mandate the checks proposed in the consultation until we are sure that they will be frictionless for the vast majority of customers who would be checked.

Analysis Frictionless checks for the lower thresholds being proposed by the government involving checks for issues such as insolvency are regarded as being relatively simple to introduce. However, a frictionless system for the enhanced tier of checks being proposed does not exist and must overcome issues surrounding data sharing and GDPR rules. The government hopes such a system will be in place by next summer, but there are major doubts about its viability.

The proposed checks are only on the very highest spending online customers, conducted frictionlessly using data sharing, and do not come with blanket rules for operator interventions if there are no signs of harm. We estimate that the financial risk assessment using data from credit reference agencies will only impact those in the highest 3% of gambling losses.

Analysis The government response ignores questions that have been raised over the accuracy of the three per cent figure. The white paper estimates that just three per cent of accounts will be affected by the enhanced level of affordability checks but that is based on data from accounts whose users gambled as little as once in 12 months. That means the percentage of regular punters who are set to be caught up in enhanced checks is bound to be greater. Enhanced checks are triggered by losses over two different time periods, affecting 3.2 per cent and two per cent of accounts respectively, and neither the government or Gambling Commission has explained how that results in the three per cent figure they claim.

The Gambling Commission’s consultation, which ran from 26 July to 18 October, received over 2,400 responses, many of which focused on financial risk checks. Those responses, and this petition, show the benefit of engaging the public ahead of implementing proposals. The regulator and government are working to ensure all views are considered as the proposals are finalised.

Analysis The hope is this is a message to the Gambling Commission as much as those who have signed the petition and responded to the consultation. Previous comments by the regulator which have misrepresented racing's case for scrapping the checks, and which have also described consultation responses as having been based on "misinformation", have raised fears the commission will seek to dismiss legitimate concerns about the proposals without considering them.

The white paper’s estimate was that financial risk checks will reduce online horserace betting yield by 6% to 11%, which would in turn reduce racing’s income by £8.4 to £14.9 million per year (0.5% to 1% of its total income) through a reduction in levy, media rights and sponsorship returns. We are working with racing and refining that estimate.

Analysis Effectively an admission that the white paper's £14.9 million figure was wrong. As has been widely covered, the estimate has numerous issues. First, it is based on the disputed forecast that just three per cent of accounts will be affected. The government's calculations also appear to defy logic, as they state the impact of the checks will be greater on the levy than on media rights, despite media rights being a greater source of income to racing from betting than the levy. Racing's customer base is also likely to be disproportionately affected by the checks. Industry analysts Regulus Partners have calculated the new measures will cost the industry an estimated £250m over five years. The government's plans to refine the estimate suggests it recognises the error.

The government and Gambling Commission are working with the industry and others to ensure the checks can be implemented in an effective but proportionate way. We are also exploring the role of pilots or phased implementation to help ensure this.

Analysis Gambling minister Stuart Andrew has previously said that he would "if necessary" pilot any new system to ensure it works, but both British racing's leaders and the gambling industry will be expecting this to happen given such arrangements do not exist at present.

Read more on the Gambling Review here:

BHA welcomes government response to British racing's petition against affordability checks 

'Checks could kill the sport' - racegoers react as Cheltenham pushes affordability petition drive 

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