Alarm bells already ringing loudly over financial checks
We hate to say we told you so, but we did. And we weren't the only ones.
New data published by the British Horseracing Authority (BHA) appears to confirm the clumsy, heavy-handed nature of the Gambling Commission’s approach to background affordability checks. It seems that the checks have already caused frustration among players and is starting to damage the industry.
Background checks (also referred to as ‘affordability checks’ and ‘vulnerability checks’) are one of the most controversial components of the White Paper legislation review. The checks began in August 2024 at a threshold of £500 in losses within a rolling 30-day period. However, this figure was reduced to just £150 in February 2025, thus affecting a larger number of bettors and players.
New statistics
In its 2024 Full Year Report, the BHA expresses concerns over falling betting revenues. Average annual turnover from British racing has fallen drastically, by 16.5%, over the past two years. Here are a few additional key stats:
- Premier events were more strongly affected than core events, losing 7.5% year on year
- Major festivals suffered the most, losing 12.4% compared to the previous year
- Sunday evening fixtures performed only 3.6% better than midweek fixtures, compared to the expected 15-20%
The BHA report states there “are several factors impacting that decline”, and that “these are headed by the impact of affordability checks and the extent to which they have resulted in people either stopping betting or placing their bets with unlicensed operators where such checks don’t take place.”
Event attendance figures have remained relatively stable, which may lend support to the theory that people are still betting – they’re just betting elsewhere, on unregulated sites.
This comes after, in December 2024, several major organisations in British horse racing referred to the Gambling Commission as “unaccountable and out of control”, highlighting a £3 billion gap between expected turnover and actual turnover. These organisations have now elected to go over the Commission’s head, writing directly to the Prime Minister, and to Lisa Nandy, Secretary of State for Culture, Media and Sport.
Gaping revenue holes and mistrust
The BHA’s findings are not isolated and have since been reinforced by the Racing Post and the Department of Trust (DoT).
A Racing Post survey, published on 26 February 2025, revealed a decrease of 29% on betting on racing over a six-month period. This startling data was compounded by the response to a key question in the survey: more than 60% said they had refused to provide information required to carry a financial affordability check.
It doesn’t stop there. The Department of Trust (DoT) analysed banking data from 600,000+ consumers for the period January-December 2024. The DoT looked at people who had deposited with at least one online casino or gambling operator during that time. Factoring in the new monthly deposit limit of £150 (which came into force in February) the Department estimated that around 25% of those surveyed would be required to undertake financial affordability checks.
Why has the UKGC introduced these checks?
Problem gambling in Britain is stable, but significant. The actual figures vary a lot depending on the source and methodology, but they tend to land between 0.3% and 2.5%. The Gambling Survey for Great Britain is expected to provide more reliable statistics on this front.
The UKGC’s blunderous introduction of affordability checks is in fact well-intended. It is expected that background checks will help with the identification of at-risk individuals, and drive down problem gambling rates.
While safeguarding players is absolutely essential, the UK Gambling Commission’s responsibilities also include supporting a healthy industry. Affordability checks look to potentially threaten that.
Background affordability checks may yet prove themselves effective in deterring problem gamblers from overspending – at least on regulated sites. However, the Commission has so far refused to provide the data which informed its decision to set the Phase 2 threshold at a very modest £150.
This refusal to divulge key data has been criticised by the same group of racing organisations that called out the Commission in December. Ironically, the UKGC has long stressed the importance of data-driven decision making in recent years.
Resistance and concerns
In public statements, the UKGC is often keen to acknowledge the balance that must be struck between player protection and the viability of the industry. But, based on the BHA’s stats, the Commission isn’t putting its money where its mouth is.
Many individuals and organisations have resisted background checks since they were first suggested in the 2023 White Paper. Most notably, last year, the Racing Post took issue with the checks, as well as how the matter was handled. This spat even led to the revelation that the UKGC had suppressed anti-background checks survey data.
It’s safe to say that there was no shortage of pushback and warnings from the gambling industry when background checks were first mentioned. These warnings were not heeded.
Whilst the UKGC and government must act to protect players, the £150 threshold is astonishingly low. What one person can reasonably afford to lose is relative to many aspects of their personal circumstance, and any efforts to quantify this are doomed to be reductive.
It is unknown what – if anything – the UKGC gleaned prior to or in Phase 1 of the background checks that led them to decide on such a lower threshold for Phase 2. Perhaps they saw nothing, and elected to tighten the noose in the hope for some result, a result which they now have: a less viable gambling industry than before.
International warnings ignored
The BHA’s suggestion that background checks are driving players to unlicensed operators is precisely what the UKGC was warned about, from industry figures, and by data from its international regulator counterparts.
Examples come from Germany and the Netherlands. These countries, among others, have seen vast numbers of their gamblers take to illegal, black market casino and betting sites.
Danger to players
The risks to players of using illegal, unlicensed sites are many and varied. Illegal sites are not subject to British consumer protection laws. As such, when things go wrong, there tends to be no path of action that British legislators can take on behalf of the player.
Other dangers of illegal gambling sites include limited – if any – access to safer gambling tools, the use of aggressive and immoral marketing strategies, and a lack of protection for players’ funds and personal data.
In the black gambling market, scams and fraud are rife, and players are often exploited. But, if they feel that legal gambling requires invasive background checks, or if it too feels exploitative, then they have little incentive to remain on legitimate casino sites.
Industry and wider impact
As unlicensed sites often pay no taxes, the entire economy loses out, and the main culprit appears to be over-regulation. If legitimate operators cannot compete, jobs will be lost, businesses will close, less will be collected in taxes, and public funding will be diminished. And of course there’s the issue of player safety and security to consider.
The British economy is in many ways reliant on the gambling sector, which has, perhaps until recently, been internationally regarded as one of the most healthy and robust in the world.
Summary and what’s next
A sharp decline in British racing betting has prompted several high-profile organisations to speak out against the UKGC’s background checks, even firing some serious criticisms and accusations at the regulator.
The BHA’s stats refer to the results of Phase 1, and they point to a dire trend. As the DoT data signposts, racing betting revenue is likely to suffer a great deal more once the impact of the more recent £150 threshold is felt.
It also remains to be seen how other sectors of the gambling industry are faring under the Commission’s new regime. Similar patterns are likely to be observed in other areas of sports betting, and by casinos.
If the Commission is indeed following in the questionable footsteps of other European regulators, we can expect to see huge numbers of players flocking to illegal sites, a diminished gambling industry, and a depleted national economy.
These statistics are definitely worrying. It certainly seems that, despite warnings from various corners of the British gambling industry and abroad, the Commission has put its foot in it. We’d hate to say we told you so, but we did. The Commission needs to rethink its approach and ensure that the legal market remains a viable and attractive option.