Our sport is facing a daunting task - but here are three crucial steps to arrest the spiralling decline in betting activity

Here is a free sample of Editor's Choice, a weekly email sent to Members' Club Ultimate subscribers, with Tom Kerr reviewing the week's biggest story and suggesting three crucial steps the sport needs to take to arrest the alarming decline in online gambling turnover . . .

It was no surprise that official gambling industry statistics released by the Gambling Commission showed another precipitous decline in betting activity on racing for the year up to March. We already knew via BHA press releases that turnover on the sport was falling at a rate close to ten per cent this year, but even if that information had not been made public the decline was all too predictable. 

Racing has suffered a series of blows in recent years. Most obviously, the imposition of affordability and anti-money laundering checks have had a calamitous effect on the sport's audience, forcing tens of thousands of higher-staking punters to either submit to invasive and wearisome checks on their personal finances, cease betting or move to the black market. In a blistering statement, the racing industry this week laid responsibility for these checks and their impact at the door of the Gambling Commission.

In response, the Gambling Commission sought again to argue the status quo was nothing to do with them, claiming there are "no current 'affordability' checks in force through regulation and we are not proposing so-called affordability checks". Yet in the same paragraph said their goal was to "tackle cases where customers have been able to gamble large amounts without checks, leading to significant harms" (my emphasis) and bookmakers have already been fined huge sums for these cases. No wonder some in racing and betting complain about the regulator 'gaslighting' the public about their role in this saga.

Yet checks are not the only drag on racing's popularity and financial wellbeing. The product itself – both in betting and sporting terms – has been degraded in recent years. Bookmakers have withdrawn many perks, including once standard offers such as best odds guaranteed. They have done this in order to preserve profitability on a sport that has grown more expensive to carry at the same time it is bleeding customers due to financial checks and issues around the quality of product.

The other factor commonly cited by punters as pushing them away from the sport is restrictions. There is an almost complete absence of reliable evidence about how prevalent these are, but anecdotally account restrictions are more common than ever. If bookmakers are striving to preserve profitability, taking a more ruthless approach towards shrewder punters makes grim commercial sense. 

Andrew Black: Betfair founder spoke out about racing's £3 billion black holeCredit: Ed Whitaker

So if racing is to snap the spiral of decline Betfair co-founder Andrew Black spoke of this week, what needs to happen? From my observation point, and having spoken to numerous senior leaders in betting and racing about the situation over recent weeks, there are three crucial steps. 

First, the current high levels of friction for punters must be reduced. Barring an improbable retreat from any form of checks, that means a truly 'frictionless' system of financial checks (ie, one that is frictionless from beginning to end for the vast majority of customers) and a revised approach to anti-money laundering checks. I do not believe this outcome can be brought about by the kind of behind-the-scenes politicking some in racing prefer - it will take sustained public pressure on the government to secure meaningful action.

Second, the sport and betting should come together to agree a new deal on horseracing. The costs to carry racing and media rights deals based on a share of turnover being paid to the sport have increasingly disincentivised bookmakers from prioritising the product via offers or promotional activity. And any new levy deal should include a commitment to a shared drive for growth, with a meaningful portion of the proceeds ringfenced for promoting racing via an ambitiously resourced central marketing operation.

Finally, racing must get its own house in order: break the power of veto that fatally compromises its ability to deliver rapid radical change, reform the expensive and inefficient structure that means the sport has CEOs coming out of its ears (though struggles to fill the positions that really matter), and deliver a coherent strategy that addresses critical issues around competitiveness, audience and funding.

It is a daunting task for the sport, requiring skilful, visionary and bold leadership, but it is not mission impossible. Not yet, anyway.

Read these next:

The £3 billion black hole: calls for urgent action on affordability checks as online betting turnover on racing crashes

British racing lays blame for £3bn black hole at door of 'out of control and unaccountable' Gambling Commission 

'My betting is down by more than 99 per cent' - Royal Ascot-winning owner who turned over up to £1m a day bemoans impact of checks

Subscribe to Racing Post Members' Club Ultimate Monthly now and get access to award-winning racing journalism with 50% off your first three months. Patrick Mullins led the way when winning the Racing Writer of the Year award at the Horse Race Writers and Photography Derby Awards in London in December and you can read more exclusive content from the best journalists in racing by signing up to Members' Club today. 

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.