The Racing Industry is awaiting the White Paper on the Review of Gambling

Both of the Companies, of which I am the Chair, have an interest in the Government’s much delayed Review of Gambling Legislation, the White Paper for which is due any day.

The Rugby Football League has Betfred as a main sponsor of its competitions and, as a governing body seeking to raise sponsorship revenues, we are watching how that might be impacted by restrictions on sponsorship of sports events by businesses in the gambling sector.

SIS, on the other hand, has a more direct interest. We have shareholders and business customers, all of which are licensed and so will be certain to be impacted by new regulatory measures.

So, like all of the industry, we have been waiting for some time for the White Paper to be published. This process has been going on for seemingly a couple of years. The gambling media tells us that publication is imminent. Some thought it was due to be published at the end of May. I was told at Ascot that it would be this week. All I know is that, at the time of writing this, on 17th June 2022, the White Paper is yet to be published.

A review of gambling legislation in the UK is long overdue. The legislative environment is a melange of Acts of Parliament and secondary legislation from the time when there was a distinction between land based and remote gambling, as it has been referred to. The regime  is crying out to be consolidated into one new Act and for the regime to be modernised and simplified.

Yet, of course, the issues that are attracting the headlines, and are the subject of the most vigorous lobbying on both sides of the debate, are the measures that might be brought in to help to reduce the incidence of problem gambling. These have been heavily trailed in Parliament and in consultations. The two most eye catching are rules that might restrict sponsorship and advertising by gambling companies- which might impact sports governing bodies and television companies- and the potential introduction of affordability checks for customers.

On both issues, it is clear that the focus of industry lobbying is for there to be industry codes of practice on both sponsorship and affordability, rather than having measures being fixed in primary or secondary legislation, making them cumbersome to amend. The view seems to be that industry codes of practice might be more palatable to a Conservative Government, provided that the codes have “teeth” and are enforceable by the industry.

With the White Paper not yet published, we obviously do not know what sort of affordability  checks and at what level the Government is going to recommend. Nor does there seem to be yet any draft of what might be contained in an industry code of practice on affordability.

And yet, anecdotally, it seems that betting and gambling companies, with the encouragement of the Gambling Commission, have been getting ahead of the White Paper and introducing their own affordability checks on customers. I have heard a number of reports of punters who have been asked to produce tax returns, statements of income and similar information,¬† before having a maximum monthly limit imposed. In other words, the industry has been introducing affordability checks on their own initiative, using their own interpretation of what might be required, without waiting for the White Paper to present its’ options.

This sort of pre-emptive action represents an interesting approach to political lobbying. It purports to show that the industry is taking the appropriate action voluntarily and need not be subject to legislation. In my view, there are pros and cons to this type of lobbying approach, that of taking action before the White Paper is published.

Among the advantages are:

  • It shows that that the industry is responsible and makes the need for legislation superfluous.
  • For publicly listed companies, it allows them to bake in restrictions to their share price so that there is not too negative a market reaction when the White Paper is published as the business has already taken the measures.
  • It allows consumer reaction to be tested so that there is real data that can be shared with regulators who might consult on where to set the levels and how to implement affordability checks.

On the other hand, there are some downsides:

  • The measures voluntarily introduced may be more or less comprehensive than the White Paper requires and so the measures may need to be adjusted.
  • Customers risk being irritated by numerous changes to measures and choose not to spend with the business.
  • It makes it more difficult to agree on standardised cross industry provisions if a Voluntary Code is the preferred solution.

It has been interesting to see the market taking these steps in advance of the publication of the White Paper and will be fascinating to follow how it plays out when the White Paper is published.