By Stewart Kenny and Matt Zarb-Cousin
When betting shops had Fixed Odds Betting Terminals (FOBTs) at £100 a spin, offering high-speed roulette, the machines changed the atmosphere of betting shops. Punters were enticed onto the machines with free spins and 'tournaments' to cross-promote the more addictive content. This in turn had a detrimental impact on racing, as it reduced turnover which sucked cash out of the levy.
It was clear that the commercial model of the betting shop had shifted as a result of the presence and promotion of highly addictive machines offering high stakes, fixed margin slot and casino games. FOBTs eventually became responsible for way over half of bookmaker revenue despite having nothing whatsoever to do with bookmaking.
In recent years, the same has been happening online through the cross-promotion of online slots and casino content. Punters might sign up to a betting site to bet on racing, but within 48 hours of opening their account they are then bombarded with incentives and free offers that lure them into the online casino. Those under 25 are most susceptible to developing an issue with gambling, particularly when confronted with high-speed casino content, which has a much higher rate of addiction than the low risk of betting on horse racing.
Forty-five per cent of those engaging with slots and casino online are either problem or at-risk gamblers, and it's the revenue growth associated with this side of the betting industry that is powering the demands for regulation from the public and reform campaigners, who quite legitimately want to curtail the harm these products can cause.
This is what has led to policies like stake limits for (previously unlimited) online slots, recently confirmed by the government to be going ahead in line with what the gambling White Paper initially set out.
Following the £2 limit on FOBTs being enacted in 2019, operators were keen for lucrative online slots not to befall the same fate. In the process of resisting this their chief executives and representatives proposed 'affordability checks', claiming they had the technological capability to tailor limits to customers without the need for a uniform stake cap.
However, we have ended up in a worst-of-all-worlds situation where the type of affordability checks being carried out by operators are not effective enough to reduce the harm associated with the slots and casino product, but are too intrusive for ordinary horse race gamblers. Information from racing punters is obtained via invasive processes that lack uniformity across the sector, due to insufficient guidance and oversight from the Gambling Commission. This has led to the completely illogical situation where source of funds checks are carried out by some operators when someone tries to make a withdrawal.
There is a way for racing to get out of this mess, saving itself from the reputational risk of being associated with a highly addictive product that derives no societal benefit. And that's for racing's representatives to argue for separate wallets and platforms for betting on lower-risk horse racing, extricating it from the highly addictive online slots and casino. This would enable racing to argue for an exemption from affordability checks, and keep more money in the sport by curbing operator cross-promotion of their more harmful content.
It would also provide the basis for government, which has promised a review of gambling tax, to reduce the tax on horse race betting in exchange for taxing online slots and casinos more. Instead of arguing for a harmonisation of gambling taxes, as the government has mooted, racing needs to delineate itself from other more harmful forms of gambling.
Horse racing should be as far away from online casinos as possible, but its representatives have allowed it to be used as a tool by the gambling lobby to argue against more regulation of the sector, and to protect a commercial model that is not in its interests, nor in the interests of punters. One that is geared towards the cross-promotion of online casino and slots to the detriment of racing, which in turn has fuelled gambling harm and therefore the demands for more regulation.
But the interests of those calling for reform of gambling regulation in order to reduce harm, and those who want a fair deal when they bet and to protect horse racing, should be in alignment. It has not served racing's interests to throw their lot in with the betting lobby and its outdated, falsifiable pretence that all gambling is the same and addiction results solely from faults with individuals rather than addictive products and the practices of the sector.
Racing's representatives should be arguing the very opposite: that betting on the sport carries a lower degree of risk than online casino, and should therefore be regulated differently. That means different wallets, licenses and platforms that wouldn't need to be subject to the same degree of oversight that online slots and casino require. It's time for racing to stand up for itself against the corporate bookmakers.
*Matt Zarb-Cousin is a co-founder of Gamban, director of Clean Up Gambling, a senior government affairs advisor to YieldSec, and a spokesperson for the Campaign for Fairer Gambling (CFG).
*Stewart Kenny is a co-founder of Stop Gambling Harm. He was also one of the three co-founders of bookmaker Paddy Power, of which he was CEO for 15 years and non-executive director for a further 15 years.
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