Multiple champion trainer John Gosden warned British horse racing Jan. 25 that the imposition of intrusive affordability and source-of-funds checks on bettors combined with the lure of the black market could prove catastrophic for the sport.
Gosden is the latest senior figure in racing to express grave fears about the controversial issue, which is estimated to be costing the sport tens of millions of pounds in revenue.
A 2019 estimate calculated racing’s income from betting via the levy and media rights at £262 million annually. However, that income is being hit by the introduction of affordability checks by bookmakers, which include requests for personal financial information such as bank statements and P60s. In response, many punters are either giving up betting or are being driven to the black market.
Arena Racing Company chief executive Martin Cruddace has estimated that affordability checks were the principal cause of a £280 million drop in digital betting turnover at the company’s 16 courses last year compared to 2019, which he claimed would equate to £800 million across the sport as a whole and a £40 million hit to racing’s finances.
The checks have been introduced as operators come under increasing pressure from the Gambling Commission before the publication of the government’s long-delayed gambling review white paper.
Now approaching his third season as joint-trainer with son Thady, five-time champion Gosden is deeply concerned about the long-term consequences for racing.
He said: “It’s very clearly the law of unintended consequences. These affordability checks are going to damage racing, that’s for sure.
“Obviously, it’s an invasion of privacy in the first place, even if it’s well intended and it will without doubt force a lot of gambling onto the black market, which is a very dangerous place to be.”
This week the Racing Post reported that Bernard Cullinane, the bloodstock agent behind Princess Zoe and a self-described serious bettor, had been driven to black market bookmakers—along with dozens of fellow big punters in his circle—by affordability and source of funds checks.
Gosden added: “Without doubt, people going in the direction of the black market to bet would spell disaster for both the betting industry and the British horse racing industry.”
John Gosden at Doncaster Racecourse
Those comments came as industry body the Betting and Gaming Council revealed research it had commissioned had shown the number of UK punters visiting unregulated online black market gambling sites had tripled during the World Cup in Qatar last year.
The research also discovered peaks in traffic to black market sites in March during Cheltenham and June during Royal Ascot, which the BGC claimed indicated horse racing was being targeted by unregulated gambling firms.
The analysis, carried out by U.S.-based research team Yield Sec, found that in December alone 250,000 people visited black market sites compared to around 80,000 during the same month the previous year, with a similar jump in November. Online traffic to sites advertising services to problem gamblers who had self-excluded from UK operators rose by almost 83%.
All betting operators licensed by the UK Gambling Commission are required to sign up for the online self-exclusion system Gamstop.
However, Yield Sec’s report said: “Non-Gamstop sites have generated 82.68% more visits from 26.88% more unique customers during Nov-Dec 2022 compared to the previous two-month period, spending on average 78% more time on site.”
The BGC said more than 64,500 players searched for black market sites offering betting which circumvented GamStop during that two-month period alone.
Yield Sec founder and chief executive Ismail Vali said: “This trend of increased illegal gambling activity during prominent sporting events reflects the ever-present threat that illegal operators pose to players and the audience.”
Overall, the number of visits to black market websites from the UK increased by 46% in 2022, with around 148,000 customers accessing such sites each month.
The research follows a previous report by PricewaterhouseCoopers commissioned by the BGC which claimed the number of customers using unlicensed sites more than doubled to 460,000 in 2020, with the money staked in the billions.
BGC chief executive Michael Dugher said the research exposed “the dire threat the growing unsafe, unregulated black market poses to punters.”
He added: “While the regulated industry was going to great lengths to protect young people during the World Cup and adhering to strict regulations and promoting safer gambling, black market operators were preying on the vulnerable.
“These unlicensed sites offer none of the safer gambling tools promoted by our members, they pay no tax and employ no one, they do not contribute a penny to sport or services tackling gambling harm, and they do nothing to protect vulnerable players.”
Dugher said there had been “too much complacency” about the threat of the black market. He added: “Rather than dismissing the problem, the regulator and the government need to tread extremely carefully and resist blanket, intrusive affordability checks at low levels that push even more punters to these dangerous sites.”
Responding to the research, a spokesperson for the Gambling Commission said it would be carefully looking at the report commissioned by the Betting and Gaming Council. The spokesperson added: “However, we would like to be clear that just because the black market exists, we will not scale back or stop some of the interventions we think we need to make in the regulated market to protect consumers.”