How Gambling Reform Is Reshaping Cheltenham Betting?

Financial risk assessments, black-market migration, levy funding, sponsorship dependency, bookmaker regulation, and racing governance all intersect during those four days in March.

The difficult part is that both sides of the argument have a point. Stronger protections for vulnerable bettors are arguably necessary. After all, the 2023 Gambling White Paper^[1] didn’t emerge in a vacuum.

At the same time, racing’s fears aren’t irrational either. Punters could be pushed to the black market and that move could spell disaster for the racing ecosystem.

That tension between the push and pull of the two sides has been what defines the debate. But lately, cracks are beginning to show from within both sides. The racing industry is pulling apart, as are members of parliament. 

Affordability Checks or Financial Risk Assessments?

You can’t scroll through a gambling news roundup without seeing something about affordability checks at the moment. While the UK Gambling Commission is keen to point out that we ought to be calling these ‘financial risk assessments’^[2], these checks are the same as the originally piloted affordability checks.

However, the UKGC continues to stress that they’re:

• Targeted
• Proportionate
• Frictionless

The aim of them is not to assess whether gambling is affordable for that person, but to identify potentially vulnerable, high-spending customers. Whatever the UKGC calls the checks, British horse racing is concerned.

There’s a distinct lack of confidence that checks will be able to remain frictionless during betting events as huge as Cheltenham. Plenty of UK punters will bet more than normal during festival week, potentially triggering checks.

If the checks become too intrusive, there’s a valid concern that consumers might leave the regulated market altogether - instead opting for the less intrusive, but also far less safe black market. Not only this, but with every consumer that leaves the market, racing’s already pressured finances get a little tighter.

MPs Write Open Letter to Lisa Nandy

Amid growing concern over financial risk assessments from the Betting and Gaming Council, a cross-party group of 19 MPs has also waded into the debate. The MPs all represent racecourse constituencies and wrote to Lisa Nandy urging the government to reconsider the rollout of financial risk assessments.

Though the MP for Cheltenham Racecourse was not part of the letter, the sentiment is the same as the anxieties surrounding Cheltenham betting reform:

‘Growing numbers of people are already choosing to bet illegally rather than be subjected to intrusive checks more appropriate for securing a mortgage than engaging in a legal pastime enjoyed by millions of Britons.’

‘Research by the Betting & Gaming Council estimates that the drift of bettors to the illegal market will cost the Treasury £300m a year in lost revenue… Ultimately, this will result in a significant reduction in betting turnover on racing, with a potential loss to the sport of £250m in the first five years alone.’

Every regulated gambling market faces the same balancing act. Consumer protections only work effectively if consumers stay within the regulated system in the first place. But, Cheltenham magnifies that concern because:

• It attracts high-engagement gambling activity (the sort that attracts FRAs)
• Horse racing employs skilled workers living rurally
• Might be particularly badly affected by these checks

Cracks Within Racing

Not only has Cheltenham got reform from the UKGC to deal with, it’s come at a turbulent time for UK racing.

Ascot Racecourse recently confirmed it intends to leave the Racecourse Association at the end of the year, unless significant governance reform takes place^[3]. The Jockey Club has also said it will not renew its membership without significant reform.

This dispute followed the resignation of former BHA chair Lord Allen and wider disagreements over how British racing should be represented moving forward.

This question of who gets to shape the future of British racing is one that’s hardly ever been debated until recently - and it comes at precisely the moment the sport needs unified leadership.