BHA Criticizes Affordability Checks: Existential Threat to British Horseracing

The British Horseracing Authority (BHA) is issuing a stern warning about the impact of the Gambling Commission's proposed financial risk assessments for online gamblers. The authority fears significant financial losses for horseracing and a threat to customer privacy. These checks are being introduced gradually and could have far-reaching consequences for the entire British gambling industry. Initial estimates speak of losses in the triple-digit millions.

BHA Chief Executive Brant Dunshea described the Gambling Commission's measures as problematic. He sharply criticized the decision, highlighting the "severe financial implications for British racing and the UK economy." The BHA also fears an "unwarranted level of intrusion" into bettors' privacy. The British racing community has engaged in years of consultations, warning the government about the potential effects of this policy. There are concerns that many customers will be driven to the illegal market by these strict controls, which would also lead to reduced tax revenue for the Treasury. They are "hugely disappointed."

Numbers and facts

The Gambling Commission's Financial Risk Assessments are being rolled out in phases. The first stage applies to the largest operators when customers reach a net deposit threshold of €5,850 (£5,000) within a 24-hour rolling period. Once fully implemented, customers aged 25 and over will be assessed when net deposits exceed €1,170 (£1,000) over 24 hours or €3,510 (£3,000) over 90 days. For customers under 25, the limits will be €878 (£750) over 24 hours or €2,340 (£2,000) over 90 days.

The regulator plans to use credit reference agency information. This aims to reduce unnecessary document requests for customers who do not show signs of financial risk. Sarah Gardner, acting chief executive of the Gambling Commission, stated:

"We are confident that our approach, using high-quality data, will enable support for high-spending customers in financial difficulties, while reducing friction for customers who are not in financial difficulties by removing the need for unnecessary and unpopular document checks to understand financial risk."

She added that the Commission had listened to feedback during the pilot process. This led the regulator to proceed carefully. The BHA cited independent modeling after the 2023 Gambling White Paper. This estimated that the policy could cost the horseracing sector around €293 million (£250 million) in lost revenue over five years. The Betting and Gaming Council estimated that approximately 120,000 racing bettors could face enhanced checks, and about 96,000 might refuse to provide documents. A Gambling Commission survey of over 12,000 respondents found that only 14% would be willing to share personal financial information. It also found that 66% would feel uncomfortable or very uncomfortable with credit reference agencies accessing their personal information. Shadow gambling minister Louie French MP called for greater parliamentary scrutiny.

Background

The debate on player protection and regulation in the UK is not new. Similar discussions have taken place in other European countries. The measures planned by the Gambling Commission are part of a broader strategy to combat problem gambling and protect vulnerable players. However, implementing such measures always carries the risk that honest players will be disproportionately restricted or turn to providers in the black market.

BHA Managing Director Julie Harrington also sharply criticized the proposals. Speaking at a BHA-hosted reception at the Houses of Parliament, she stated that a "blanket approach to affordability" was not appropriate. This is especially true for horseracing as a sport with broad appeal across different socioeconomic demographics. Harrington emphasized that British racing is working with relevant stakeholders to formulate a response to the Gambling Commission's consultation. They look forward to further discussions with the DCMS and the Gambling Commission on how the impact on racing fans and the industry as a whole can be mitigated.

Industry representatives have raised doubts about the reliability of credit reference agency data. Melanie Ellis of Northridge Law noted that the issue of different agencies producing different results for the same customer remains unresolved. Chris Elliott of Wiggin expressed concern that a reduction in Gross Gaming Yield (GGY) would come not only from players in financial distress. It would also come from customers who simply do not wish to provide documents or use open banking checks. Elliott believes that the commission's announcement does nothing to assuage that concern.

Why it matters for German players

The debate in the United Kingdom once again highlights how sensitive the issue of player protection and financial scrutiny is. For German players, the affordability check mechanisms discussed here are not directly relevant, as the German State Treaty on Gambling 2021 (GlüStV 2021) provides its own strict rules. In Germany, there is no credit check in the British style, but there are deposit limits and a central player blocking file (LUGAS).

German players at GGL-licensed providers can deposit a maximum of 1,000 euros monthly. This limit applies across all providers and is monitored via the LUGAS system. Additionally, the stake per spin is limited to 1 euro, which also serves as a player protection measure. These national regulations are intended to help prevent problem gambling without disproportionately burdening players. Whether the German measures are more balanced in their effect than the British ones remains to be seen in the long term. Important to note: In Germany, players do not have to provide detailed income statements or similar documents to legal providers as long as they adhere to the general limits.

What it means for GGL-licensed casinos

For casinos holding a German license from the Joint Gaming Authority of the Federal States (GGL), the debate in the United Kingdom reinforces their own, albeit strict, but differently designed player protection measures. They are not required to conduct affordability checks similar to the British model. Instead, the legally stipulated deposit limits of 1,000 euros per month and the stake limit of 1 euro per spin are central to player protection. GGL casinos are connected to the LUGAS system, which prevents multiple registrations and cumulative deposits exceeding the set limit.

The discussion surrounding British affordability checks underscores the necessity of finding a balance between player protection and safeguarding legitimate business models. For GGL casinos, this means that they must continue to focus on adhering to national regulations. There is currently no indication of adopting British-style checks. However, German regulations are regularly evaluated and adjusted as needed.