BGC chief: 'The government has brought this on itself. It's not a neutral observer - it's the architect'

The British government proposed "frictionless" affordability checks in its gambling white paper, despite the technology for those checks not existing, and only a "ferocious backlash" from punters has prompted sincere work on delivering a system that fulfils that promise, Betting and Gaming Council (BGC) chief executive Michael Dugher has said. 

Dugher said the betting industry body had been working closely with industry regulator the Gambling Commission to deliver a "system that does not interfere with the vast majority of people who enjoy a bet, while also keeping customers in the safety of the regulated industry".

His comments come ahead of Monday's parliamentary debate on affordability checks, prompted by a petition signed by more than 100,000 people calling for the checks to be scrapped. Affordability checks have already wiped millions from British racing's revenues according to the sport's leaders, who estimate that if the formal checks in the government's white paper are introduced in their proposed shape racing could lose an incremental £50 million a year.

"If any good has come out of this, it's that we now have a better understanding and relationship with the Gambling Commission," Dugher said.

"The government thought it could announce frictionless checks even though such a thing doesn't exist. It then kicked the can down to the Gambling Commission to sort it out in the hope the politics would go away but the opposite has happened and there's been a ferocious backlash from punters."

The Gambling Commission on Thursday said it would conduct a pilot scheme for affordability checks based on the principle they would be "frictionless for the vast majority of customers who undergo them". However, many customers are already being asked for personal information by bookmakers, which has been blamed for a decline in betting turnover on the sport. The latest Gambling Commission figures showed betting turnover on racing plummeted by £900m in 2022-23.

"A system evolved in the last few years through the outcomes of enforcement actions by the Gambling Commission," said Dugher. "You now have a system that can be inconsistent and appear arbitrary. We need to put in place a consistent framework across the industry with transparency about what the checks are and at what levels.

"Every effort must be made for them to be genuinely frictionless. We're working really hard with the Gambling Commission on that framework. Its chief executive Andrew Rhodes is trying to lead on a more consistent, transparent, robust and, as much as possible, frictionless system that does not interfere with the vast majority of people who enjoy a bet, while also keeping customers in the safety of the regulated industry.

"The nature of the checks is more important than the thresholds. Frictionless is a good concept and we've argued all along, when it comes to online racing betting, you need to use technology to make sure that when you're making interventions it's done in a targeted way using the industry-wide markers of harm.

"You're never going to have frictionless checks for all customers, it couldn't happen, but you have to make sure it's genuinely frictionless for the overwhelming majority."

Michael Dugher: Betting and Gaming Council chief executive

Dugher said the government, including culture secretary Lucy Frazer and gambling minister Stuart Andrew, were aware of the impact checks are having on the racing industry and punters but blamed them as the "architect" of the current situation.

"The government is clear in its white paper and even quotes a figure as to what the negative impact could be on racing's funding. It has brought this on itself. It's not a neutral observer watching events unfold, it's the architect.

"I'm certain Stuart Andrew and Lucy Frazer are genuinely sympathetic and understand the impact this is having on punters and on racing, and are encouraging the industry and the regulator to do what they need to do to fix this problem."

The Labour Party is odds-on to form a majority government after this year's general election but Dugher, a former Labour MP who served as shadow culture secretary, said he did not believe that would lead to major changes around the gambling review.

"I think Labour supports enhanced spending checks for online gambling and wants the government to get on with a lot of this work but they are equally conscious you need to get the changes right, keep people in the regulated market and not wreck the funding of horseracing."

The BHA is planning a campaign to bring prospective Labour MPs up to speed with the needs of the racing industry after coming in for criticism over its failure to forge links with the party. Last week, the BHA's policy and advocacy manager Jack Barton said it can be more of a challenge to engage Labour MPs, who mostly have seats in more metropolitan areas, given racing's status as a predominantly rural industry.

"It would be lazy to just dismiss them as metropolitans who don't understand," said Dugher. "I think most racecourses will have a new MP by the end of the year, which is a seismic change for racing. I'm not sure its leaders have done the work yet to build those relationships. What has been done to identify candidates standing in seats with racecourses? We're doing that in advance at the BGC. You have to put in the work."

'There are some who view levy reform as a giant, lazy sticking plaster'

This month, BHA chief executive Julie Harrington reiterated British racing's view the planned implementation of affordability checks made levy reform necessary. However, Dugher warned this should not be viewed as a solution to the economic challenges facing the sport.

BHA chief executive Julie Harrington: affordability checks have meant levy reform is essential

The government committed to reviewing the levy, the sport's central funding system, following the publication of the white paper last year in recognition of the financial impact the proposed affordability checks would have on racing's finances.

Ministers encouraged the BHA and bookmakers, through the BGC, to come up with a solution without the need for the government to become involved, but an agreement has not been reached despite the deadline for the decision being set for late April.

"There are some who view levy reform, and what they mean is a hike in levy, as a big lazy sticking plaster, rather than face up to the fact, and I say this with great sadness as a racing fan, that this is a declining sport facing huge economic challenges," said Dugher.

"Rather than do the heavy lifting by having a proper collaborative conversation about how we can all work together to increase betting turnover to the benefit of racing and bookmakers, and modernise the sport, they default to sticking the taxes up on the betting industry."

In a submission to the Culture, Media and Sport select committee, British racing argued the target for the amount it should receive from the levy is £133 million, rather than the most recent yield of £100m, citing the rising costs facing the sport. Its leaders have called for the levy to be extended to all betting on global racing by British punters.

"If you put the levy up by a couple of per cent then you're going to make this sport unprofitable for bookmakers, in which case you put at risk all of the money that goes into racing from betting," Dugher added. "Why would they spend money on advertising, sponsorship and everything else if you've destroyed the profitability of the product? You can only tax it so much without knocking it over and there's a danger of that.

"We're genuinely engaged in constructive talks with the BHA on this. In recent months that has required a great deal of compromise from the major betting operators. We continue to want to negotiate in good faith. However, for any voluntary deal to work there has to be give and take on both sides. I have a lot of sympathy for the BHA because when it comes to their members they are herding cats, to put it politely.

"The whole of the sport should be working with the BHA and betting industry to ask how we can truly address the decline in the sport, using the discussion about levy reform as a once-in-a-generation opportunity to work out ways to grow the product. If you just whack a plaster on the problem we'll be back here in a couple of years."

Read more: 

'These proposals risk sending a rocket to the core of what makes British racing tick' 

'Please, please, carefully consider the damage you are going to do to the racing industry' - Middleham's plea to Rishi Sunak 

BHA plans to get Labour on board after criticism of failure to forge links with party 

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