Joe Saumarez Smith: 'If you overregulate, you drive your biggest customers to the black market'

BHA chair Joe Saumarez Smith has spelled out the multiple difficulties facing British racing on the eve of financial risk checks being introduced by the UK government and the Gambling Commission. 

Saumarez Smith was speaking at the 40th Asian Racing Conference, held in the Japanese city of Sapporo, during the opening session dedicated to the "State of Play" in racing across the world. 

Friday will see the introduction of 'light touch' background checks on customers who deposit more than £500 a month in an online betting account – a figure that will fall to £150 a month next February – as well as the launch of a six-month pilot scheme to test whether more intrusive financial risk checks for higher levels of spend can be made frictionless for the majority of customers.

The Gambling Commission gave an update on both schemes in two blog posts on Tuesday, but many stakeholders in racing and betting have already expressed a desire to see greater transparency about what will count as success or otherwise for the pilot scheme

The racing industry estimates that millions of pounds in income have already been lost due to additional checks on punters introduced by betting firms, while the figure it puts on the cost of the two layers of official affordability checks is up to £250 million over the next five years. 

"It's difficult because we as racing don't want to be seen to benefit from problem gambling," said Saumarez Smith. "We're looking for a proportionate response. The conversations with the government have been difficult as there hasn't been a lot of nuance. Working with operators, we've spent a lot of time trying to explain the massive impact that affordability checks will have on racing."

The Asian Racing Conference's council on illegal betting activity are world leaders in the fight against the black market and Saumarez Smith will have found a receptive audience to his message.

He added: "It's naive to believe that if people can't bet with a regulated operator that they won't find somewhere else to bet, which has massive integrity issues. There are in theory frictionless checks coming in but there will ultimately be a large proportion of bettors who don't want third parties seeing their financial transactions and I have a lot of sympathy with that.

"We have to make the case to the government that if you overregulate, you drive the biggest customers to the black market. We're not able to trace where that money goes, so from an integrity point of view it's a growing problem and it's something we're worried about."

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