Financial Risk Checks for Gambling

George Freeman Excerpts

Monday 26th February 2024 Westminster Hall

[George Freeman (Mid Norfolk) (Con)]

They say that all good things come to those who wait, so I hope the Minister will listen to my words and then reassure me that I have not waited in vain. I am grateful for the chance to speak in this debate. When more than 40 or 50 colleagues turn up to Westminster Hall—for those listening, and who are not aware—we clearly have a problem. Actually, I suggest we have two problems that the Minister present has the great honour of helping us to deal with.

The first is the very serious problem of the increasing number of people in this country who find themselves in the turmoil of addictive online gambling. That is a real problem. The second is the fragility of the finances of racing, a sport that we all love. We need to be clear about those two problems and not to conflate them too much, as has been done, and to work out how to deal with them both, because both problems are real.

I have no particular interest in racing, other than a long family history and connection. I have been to the races many times, both before my time here and as a Member of Parliament, and occasionally as a guest of the BHA, which supported the work I did to create the Bridge of Hope charity. I was, with pride, closely involved with the 2013 Offshore Gambling Bill, promoted by my right hon. Friend the Member for West Suffolk (Matt Hancock), who represents Newmarket, to bring offshore betting within the purview of the levy to give racing a serious boost. I do not have a racetrack in my constituency yet; I have waited for the Boundary Commission to put Fakenham in my patch for many years, but it has refused to do so. I enjoy the little tracks as much as the big—a point that my hon. Friend the Member for Waveney (Peter Aldous) has just made. It is a great pleasure to follow him. My brother trains in California, and I have spent many hours as an underpaid hot walker, walking his hots around the track in both California and, in rather cooler weather, at Woodbine in the winter. I am a happy and assiduous attendee at Fakenham races, one of the country’s great regional tracks

I think the House will be aware that I really stand this afternoon because of my own family experience. My father was a jump jockey who rode through the ’40s and ’50s. He rode for Sir Peter Cazalet and rode Her late Majesty the Queen Mother’s horses. In 1958, he won the grand national on Mr What and the King George on Lochroe. With my mother, he bred Specify, who went on to win the national in ’71. However, my father’s is a tragic story. After many head injuries, head injury-induced depression and psychosis, alcohol addiction, gambling and bankruptcy, his life—indeed, that of my family—collapsed in 1967. It is a familiar tale for many sporting heroes, but a story that, thanks to the great work of the racing industry, we do not see any more because we are better at looking after jockeys and better at detecting head injuries.

It is in that context that I want to make clear that I rise today because I take the unintended consequences very seriously—the damage of great sport when not properly regulated, and the damage of gambling and bankruptcy. I am not at all relaxed about those dangers. I hope it is, therefore, all the more powerful when I join colleagues who have spoken today in saying how seriously I worry that this well-intended measure, designed to tackle the curse of online gambling, is in danger of not solving that problem, but exacerbating another: the deeply fragile finances of a great sport that all Members present, across all parties, have expressed our love for.

I am fearful that we are in danger of making a mistake that, in 15 years in Parliament and 30 years of watching, I have seen all too often, which is the mistake of do-somethingery: “Something must be done. This is something—let’s do it.” It is using a sledgehammer to crack a nut, with the law of unintended consequences, punishing the innocent and doing very little to tackle the real problem, and seriously damaging the financial resilience of this great industry. I think it would be a huge mistake, and a great shame on us as a generation and on the Government who allowed it to happen. In that spirit, I am here to try to give the Minister some helpful tips on how we might find the right way through this.

I thank the petitioners who brought us here today, as well as the Racing Post and the British Horseracing Authority, which have done such good work to raise the issues. I will highlight three important pieces of data shared in the British Horseracing Authority brief. The first relates to the impact of these measures. More than 15,000 horserace bettors took part in the Right to Bet survey in the autumn. Of those, more than half said they will stop betting, or bet less, if new checks are introduced, while one in 10 bettors is already using a black market bookmaker. Some 40% are prepared to use the black market if clunky enforcement affordability checks are implemented, 90% oppose postcodes or job titles being used to determine their ability to bet, and 26% have already experienced an affordability check ahead of the passing of any legislation.

Secondly, the briefing makes clear the full impact of these reforms if introduced as they stand. There will potentially be a £50 million cost to this industry, which, as my hon. Friend the Member for Waveney has just made clear, is already struggling. That is not something that we should accept lightly.

Thirdly, the briefing points out that a £500 a year upper threshold for frictionless checks works out at a net spend of just £1.37 a day. Are we seriously intending to damage the viability of this great sport and this great industry in order to look busy in monitoring a £1.37 risk? This is a disproportionate measure and I fear that it will have major unintended consequences.

I will not repeat or rehearse the arguments that have been made very eloquently by many colleagues. I will just highlight the fact that there are many who are not able to speak here today, including many peers in the upper House, whom I will not name but who have taken a very strong interest in the issue, and my right hon. Friends the Members for Stratford-on-Avon (Nadhim Zahawi) and for Witham (Priti Patel), and my hon. Friend the Member for Hexham (Guy Opperman), who is a Minister. He is also a distinguished amateur jockey who would have spoken today had he been allowed to do so. Many people from across the House have not been able to speak in this debate but would have done so very forcefully.

I will make one or two points that perhaps have not been made as fully as they might have been. First, as has been said, racing is a vital mainstay of the decentralised rural economy all round this country, and it is absolutely key to the levelling-up mission that the Government have set out. Yes, it is the sport of kings, as others have said, but it is also the sport of stable lads and ladesses, and the sport of small businesses all around the country. It is the sport that provides the pyramid at the bottom of which are the point to point races, the pony clubs and all the grassroots equestrian activity that we love and rely on.

From Yarmouth to Chepstow, from Wincanton to Kelso and from Cartmel to Catterick, many tracks are integral to their local economy. Horseracing touches on and is instrumental in 60 marginal seats, which is not a small number in an election year, creates 80,000 jobs directly and 100,000 indirectly, and 8,000 small and medium-sized enterprises are involved with it. This is not a fringe activity; it is a very key activity at the heart of our decentralised economy.

I will just make another point. An earlier speaker suggested that we do not need betting to support the boat race or one-off events. Horses are not machines and we cannot have an industry based on one race a year. The reason we can have the Derby is that we have all the other races that build up to it, and it is the same with the grand national. Those two races are the pinnacles of great pyramids of activity that start at small, windy tracks all around the country. Also, horses cannot just be parked for 364 days a year and then asked to run; the training and the conditioning of horses requires activity all through the year.

[Wera Hobhouse]

Throughout this debate, we have not really mentioned these beautiful creatures, the joy we get from watching them race, or all those people who work with, train and look after them. That is really important to all of us who have spoken today.

--- Later in debate ---

[George Freeman]

I am grateful to the hon. Lady, who makes a good point. They are beautiful and what a joy it is to watch them exercising, whether in Malton in Yorkshire or wherever else around the country. The sight of horses exercising in preparation for racing is part of the rural economy.

Secondly, I want to make the point that horseracing, as an activity and an industry, is a jewel in the crown of our global soft power. The truth is that, having grown up in Newmarket as a child, I have watched as that town and its horseracing have become very reliant—over-reliant, I would suggest—on a few very wealthy families. Those families have done an amazing service to our sport, but we have to make sure that we are not reliant on a very small number of individuals to maintain the viability of an entire industry. That point puts this debate in a wider context.

Crucially, I also want to highlight that there is a very serious problem in our society of addiction to gambling, particularly online gambling, and there is a growing body of evidence—I say this as the former Minister for Life Sciences and as somebody who has had a career in medical research—that the causes of such addictive behaviour and cycles of addiction are not simply based on repeat activity. They are a symptom of much deeper underlying causes, which are often genetic and nearly always neurological. There are a whole series of conditions that drive that underlying cycle of addictive behaviour. It is not that someone has a bet on a horse, then a second bet and it is entirely addictive. Indeed, in my own experience, betting on horses is quite the opposite; I have very seldom made much money doing it and I very seldom carry on doing it with that in mind. No, that is not what drives the addictive behaviour; it is underpinning neuroscience and wider conditions. As a society we really need to take those factors very seriously.

[Matt Hancock]

Is there not the more specific distinction, which the hon. Gentleman almost drew out, that the placing of a bet and then waiting many minutes as a minimum for a result is neurologically distinct from a bet that gives an immediate hit? Where the repeat bet would be based on the physiological immediacy of the previous result, horseracing breaks that and therefore has a different neurological impact in relation to addiction. Would it therefore not be right in law and in policy to completely separate the proposals for online games of chance from the wonderful sport of horseracing? It would be easy to do in law—let’s just split the two.

[George Freeman]

The right hon. Gentleman anticipates the logic of the argument I was building towards—he is exactly right. That is why if we are seriously thinking of tackling this curse of addictive online gambling, surely we should be looking at a whole range of other behaviours and products. The proposal seems to be a disproportionate way of tackling a real problem, if indeed that is what it is. Others have mentioned the logical consistency of extending these checks on alcohol, tobacco, car hire purchases and—dare I say it—mortgages, and all sorts of things that we might say people cannot afford. I worry that this could be the thin end of a very big wedge in which the state decides that it is its job not to regulate properly, but to start asking whether people can afford to do something. That is an Orwellian dystopia that I do not want to live in.

The truth is we have to think properly about the sustainable resilience of racing. I absolutely echo the comments of my hon. Friend the Member for Tewkesbury (Mr Robertson): prize money is falling fast, costs have risen fast and are stubbornly high, and competition is eating our lunch. If we look to Irish and French racing, we see that we are haemorrhaging from a serious industry. This proposal would not make a small reform to a healthy industry—the industry is struggling and it needs our help, but I am worried that the law of unintended consequences will make the situation worse.

I want to make a point about technology. It has often been asserted that we do not have the technology to do these checks properly. That is right at the moment, but would it not be an amazing thing if we decided to use technology properly—we are already an AI powerhouse—to start to analyse addictive behaviour and look at the trades on digital betting that indicate such behaviour? Over 70 markers of harmful gambling have been identified in studies, 16 of which really drive this activity. I suggest there might be an opportunity for us to use technology better to tackle those behaviours online that drive the problem we are trying to solve.

I echo the comments of the right hon. Member for West Suffolk on track racing, which I would go so far as to say is one of the best ways to introduce people to responsible gambling. I remember taking my two children to the 2000 Guineas and giving them £5 each, and they decided to put it together on an each-way bet. It was a smart move; they are clever children. Even more clever, my son decided to take my daughter’s advice, because she knows about horses, and he looked at the odds, because he knows about numbers, and they put £5 each way on Galileo Gold, who stormed to victory. They learned a lot that day about gambling. They saw people who had drunk too much and who were losing too much. They didn’t. I took the money and gave it to them. They discovered a lot, and on-track gambling is a fabulous way of getting people to realise that most of the decisions we take in life are a gamble one way or another, and it is how we deal with them that really matters.

I am not here in any way for the health of the gambling industry. I am interested in the health of UK racing and the real identification of the at-risk addiction that we see cursing so much of our society, in particular those games of chance that have driven such addiction. I simply say to the Minister that I know he has a difficult job on his hands. I have sat at that Dispatch Box with a packed Westminster Hall calling for reform. The Prime Minister, in North Yorkshire, understands the importance of the industry. The Secretary of State’s constituency is next to Newmarket—in fact, she has the breeder of Galileo Gold in her constituency—and understands it. It is not too late to change tact and come back with a serious package of measures designed for the twin problems of the sustainability of racing’s finances and the genuine opportunity for this country to lead in harnessing technology and smart regulation for the tackling of gambling addiction. If not, I urge the Minister to look seriously at the net loss provisions, which are too low. When an industry warns that something will cost it £50 million, we have a duty to listen.