We are now one year on from the publication of the landmark gambling White Paper and the Government continue to take important steps in implementing their key policies and recommendations.
That White Paper recognised the significant contribution that racing makes to not just British sporting culture, but our wider economy. It is second only to football in attendance figures and constitutes a major part of various different rural economies across the country. According to a study, submitted by the British Horseracing Authority, the racing industry has direct revenues in excess of £1.47 billion and makes a total annual contribution to the UK economy, including induced effects, of £4.1 billion.
As the regulator for the sector, the Gambling Commission has a pivotal role to play in the implementation of reforms. Today the Gambling Commission published its decisions on four key measures from the White Paper: stronger age verification in premises, improving customer choice on direct marketing, safer remote game design, and financial risk checks. I am pleased to say that its plans for these measures remain entirely consistent with the objectives of our White Paper.
In its consultation response, the Gambling Commission set out its plans to implement a proportionate new system of frictionless financial risk checks. This system contains two different financial risk checks. The first are frictionless, light-touch vulnerability checks that will use publicly available data and do not require any information from punters.
The second are enhanced frictionless risk assessments. As set out in the Gambling Commission’s recent blog post on this issue, the consultation response makes clear that these enhanced risk assessments will only be introduced after a pilot period and at the point when we are certain they will be frictionless, meaning customers will no longer have to provide documents. The pilot will be used to test the best data to use and how operators and credit reference agencies will share this data. Credit reference agencies collect a range of data that could be used in an assessment, such as information on missed or late credit payments or how much credit is available. Gambling operators will never have access to raw account-level data so, for example, they would not be able to look at customers’ bank accounts and nor will the Government or Gambling Commission. The pilot will also assess the impact these risk assessments will have on the industry as well as consumers.
While this pilot is under way, an interim code will deliver progress on resolving the issue of existing ad hoc and onerous document checks. The Betting and Gaming Council has announced today its new industry code on consumer checks. For operators who adopt this interim solution, these measures will bring much-needed consistency across the regulated sector until the frictionless financial risk assessments can be developed, tested and fully implemented.
The interim code and the new system of frictionless checks are a major step towards transforming the current system of ad hoc and onerous document checks that are negatively impacting customers, the betting industry and horseracing. Even when this new system of frictionless checks is in place, we recognise that these measures are likely to have an impact on betting yield. The Government are working with racing, and refining estimates of this impact, and, as committed to in the gambling White Paper, we started a review of the horserace betting levy in May 2023 to ensure a suitable return to the sport for the future. This review has been taking into account the impact of the wider reforms in the White Paper on horseracing to ensure the proposed levy delivers an appropriate level of funding for the sector. We recognise the importance of the levy to the horseracing industry, and we have strongly encouraged racing and betting stakeholders to work together to come to a consensus in the best interests of the sport. We recognise that a huge amount of hard work has been undertaken over the course of the last year, but we are disappointed that this has not resulted in an agreement to date. I and the Minister for Sport are undertaking an intense period of engagement with all parties to resolve this issue, and we continue to encourage all parties to engage and come to an agreement voluntarily. As we have always said, if no agreement is reached we will consider legislative options. We will update the House on the progress on these talks on or before 22 May 2024.
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