Financial Risk Checks for Gambling

Philip Davies Excerpts

Monday 26th February 2024 Westminster Hall

[Philip Davies (Shipley) (Con)]

It is a pleasure to see you in the Chair, Sir Edward. I am not renowned for brisk speeches, but I will try my best. I am sure the people of Market Rasen are delighted to see you taking such an interest in this debate.

I start by referring people to my entry in the Register of Member’s Financial Interests: I have occasionally accepted hospitality from the betting industry and the horseracing industry; I am an unpaid board member of the Racehorse Owners Association; and as I always mention on these occasions, I am the modest owner of racehorses and the owner of modest racehorses.

I thank the hon. Member for Neath (Christina Rees) for opening the debate and the Petitions Committee as a whole for allowing it to take place. I particularly thank Nevin Truesdale from the Jockey Club for launching this petition and everyone who signed it, enabling this debate to take place. I the Racing Post, which not only did a tremendous job getting behind the petition but has done sterling work in highlighting the damage that the proposed affordability checks could do to punters and the sport of horseracing. I also commend the Minister, my constituency neighbour, who inherited this policy and whose engagement with all stakeholders has been exemplary.

Let me make it clear at the outset that I am speaking up for two groups today: one is the horseracing industry, but first and foremost I am speaking up for punters—the people who have been largely ignored in this long-running debate and tug-of-war over affordability checks. They often get caught up in the crossfire of the arguments between the well-funded betting industry and the well-funded anti-gambling campaigners.

I have no intention of speaking up for bookmakers, partly because most of them in the industry are big enough to speak up for themselves, and partly because their position on stake restrictions is inconsistent—that is the kindest word I can use. On the one hand, bookmakers say it is wrong for the state to restrict how much people can gamble; on the other hand, though, they are the most guilty of all of restricting the stakes of punters who have the audacity to back too many winners, often to pennies rather than pounds. I have warned them time and again that trying to have their cake and eat it on punter restrictions would backfire. Until they abandon that anti-punter mentality, what they say on this issue will always be subject to some level of ridicule.

The principle that people should only bet what they can afford is not a controversial one. It is the first piece of advice that any of us would give to anyone who starts betting. However, what the Government and the Gambling Commission are proposing is completely unacceptable. They propose frictionless checks for people who have a net spend of just £125 over a rolling 30-day period, or £500 in a year, with enhanced checks taking place for anyone with a net loss of £1,000 in 24 hours or £2,000 over 90 days.

I have a number of concerns about that approach, both practically and in principle. I find it somewhat offensive that the Government and the Gambling Commission believe that there is something inherently distasteful about betting. If that is not the case, why are the Government proposing that type of affordability check just on gambling? Why do they not ask every retailer in the country to carry out similar checks on customers to ensure that they can afford to buy whatever they come to the counter with? Is the Minister really claiming that nobody spends more on alcohol than is good for them, more on shoes than they should, or more on holidays than they can actually afford?

[Sir Julian Lewis (New Forest East) (Con)]

My hon. Friend does not even need to talk about products that are that addictive. As one of my constituents has pointed out, no one checks on him if he spends £150 on a dinner for two people. Would he accept that, even if the principle is conceded that there should be some checks, the level at which this has been set is far too low?

[Philip Davies]

I very much agree with my right hon. Friend, as I happily do on most things. Of course people spend more than they should on all those other things, but the Government are snobbishly only treating punters as some kind of pariah, which I do not appreciate.

In Parliament, we should stand up for people’s freedoms. I was not elected to Parliament to stop everyone else doing all the things I do not happen to like myself, but some Members seem to think their job is to do nothing other than that. It is unacceptable that the Government, the Gambling Commission and the bookmakers will basically, between them, decide how much each individual punter can afford to spend on their betting, and the punter gets virtually no say whatsoever. It is completely outrageous. The Conservative party used to believe in individual freedom and individual responsibility, and some of us still do.

If we asked how much responsibility each group should take for determining how much somebody can afford to spend on betting, I doubt anyone would say that the individual concerned should have 0% responsibility, but that is the route down which we are in danger of going. It is absurd to think that bookmakers and regulators should be able to decide how much each individual person in the country should be allowed to spend on betting. When people open an online betting account or the next time they log in, perhaps they should be forced to enter how much they want to limit their spend over a fixed period. The responsibility for ensuring that they do not go over that should rest with the bookmaker, but not the decision as to how much they can afford in the first place.

[Adam Afriyie (Windsor) (Con)]

Does it not strike my hon. Friend that there is a degree of hypocrisy, when a large proportion of problem gamblers who really are in great difficulty are just using national lottery scratchcards? The figure is about four times higher than that for those who gamble on horseracing.

[Philip Davies]

I know that my hon. Friend is a big supporter of Windsor racecourse in his constituency. I will come on to that later. I hope you will think about the interventions I am taking, Sir Edward. I do not want to get in trouble.

[Sir Edward Leigh (in the Chair)]

You can have injury time if you want, Mr Davies.

[Philip Davies]

Thanks.

Thankfully, readers of the Racing Post and punters still believe in the timeless Conservative principle of individual responsibility. In a recent poll of punters carried out by the Racing Post, when asked who they thought was best placed to assess whether their betting is affordable, 96.6% said that they were, 1.8% said the Gambling Commission, 1% said bookmakers and 0.6% said the Government. If that is not a giant raspberry to the proposed affordability checks, I do not know what is.

Everyone knows that the problem gambling rates in the UK are extremely low, and certainly do not justify anything remotely close to what is being proposed. However, it is also pretty obvious to most people with common sense that the affordability checks are likely to make things worse for people with a gambling addiction, rather than better. Does anyone seriously think that anyone who has a serious gambling addiction, if and when they are told by online bookmakers that they are no longer allowed to bet with them, will just stop betting completely? It is pretty obvious that those people will do all they can to carry on with their addiction, and that will mean going to the black market where there are no controls on people’s behaviour.

[Ronnie Cowan (Inverclyde) (SNP)]

Will the hon. Gentleman give way?

[Philip Davies]

The hon. Gentleman will have the opportunity to have his say later, and I am anxious about Sir Edward’s strictures.

The Gambling Commission has always said that the threat from the black market is overstated, while at the same time, like most quangos, telling the Government that it needs more money to tackle it. I hope the Minister will make it clear that he does not underestimate the threat from the black market. Only today, the front page of the Racing Post shows the results of a special investigation into The Post Bookmakers—an unregulated firm with 1,300 customers—which said it was expecting a ridiculously busy Cheltenham and recommended that a customer deposited as much as they could. How on earth can making it more likely for people to go to firms like that possibly help to tackle problem gambling?

The wonderful sport of horseracing derives much of its income from the gambling industry, so the more people go to the black market, the less money there is for the sport of horseracing. British racing is the best and most prestigious in the world. It is the second biggest spectator sport in the UK after football, brings a huge amount of foreign investment into the country and is a huge part of the rural economy. It also provides a huge amount of pleasure to millions of people across the country. The Government cannot possibly allow themselves to introduce measures—however well meaning —that will have a devastating effect on this great sport.

Some 24,000 racehorse owners in the UK invest more than £500 million into the rural economy. They pay £32 million a month in training fees, employing over 350 racehorse trainers who employ some 80,000 people. The least they should be allowed is to have a bet on their own horses as well. We cannot allow decisions to be made that put that investment at risk.

However much I would like the Government and the Gambling Commission to abandon the affordability check policy, I have not been here so long without accepting that some battles are impossible to win. I therefore accept that the Government may feel that they have invested too much in the affordability check debate to be able to abandon it completely. I have suggestions for the Minister that might help make the policy less bad, and I hope he will consider them.

The Government have said that they want financial checks to be frictionless, but as envisaged the checks would be anything but. First of all, will the Minister pledge to ensure that any checks will be based on net deposits, not gross deposits? That would make a material difference. Secondly, it is envisaged that enhanced affordability checks will be based on current account turnover, or CATO, data. That is used primarily by loan industries to determine whether a customer can afford a loan. It focuses on money flowing in and money flowing out of an individual’s account. That is precisely the wrong kind of test, as it second-guesses in a subjective manner what someone can afford.

CATO does not consider financial vulnerability and is extremely unhelpful when it comes to people with irregular money flows such as the self-employed, entrepreneurs and individuals with high wealth but low income. Will the Minister pledge not to use CATO data for those reasons? If he insists on going ahead with affordability checks, will he use SCOR data instead, from the Steering Committee on Reciprocity? SCOR data is much more appropriate as it shows if someone is showing signs of financial vulnerability and distress. It flags people who are falling behind on the rent or those with missed mortgage payments, defaults on loans and so on. Crucially, the checks are entirely frictionless and do not discriminate against any group, such as the self-employed.

When the Government envisaged affordability checks, surely that is what they had in mind—checking that people were not resorting to gambling to try to win the mortgage payment that they had fallen behind on, rather than trying to second-guess what each individual could afford to spend on gambling. I look forward to the Minister’s response to that suggestion. Will he also make clear where anti-money laundering checks will fit in with the affordability check regime?

If the Government insist on affordability checks, I have another suggestion: to differentiate between games of skill and games of chance—that is, to separate sports betting from online slots and roulette. Horseracing is not a game of chance and in my view should not be treated as such. Incredibly, as my hon. Friend the Member for Windsor (Adam Afriyie) made clear, the Government envisage that some games of chance will be treated more favourably than games of skill. I do not think that the national lottery will be subject to affordability checks—it cannot possibly be right that people who bet on horseracing will but people who bet on the lottery will not. Will the Minister confirm that that will not be the case or give an explanation of why it will?

Not including the national lottery in such measures would indicate a disregard for the people losing money and an interest only in the people winning money. If the concern is about problem gamblers, why is it okay if they have lost all their money to the lottery, just because that money goes to good causes rather than bookmakers? The national lottery must be included in all the measures in the White Paper.

I end, Sir Edward, where I began: by urging the Minister to look after the interests of all punters to ensure that nothing is done to threaten the horseracing industry, which will never forgive the Government otherwise, and to stand up for the key Conservative principle of individual freedom and individual responsibility. It is not too late to snatch victory from the jaws of defeat.

--- Later in debate ---

[Paul Blomfield]

I thank the right hon. Member, my friend in this context, for his intervention. He has done such good work on this issue, and on this point he is absolutely right.

I have become involved in gambling reform only in the past six years or so, following the death of one of my constituents, Jack Ritchie, as a result of gambling addiction. What I learned from the tragedy of Jack’s death was that often when people take their own lives it is because they are overwhelmed not by gambling debt, but by the addiction itself. When I talked to Jack’s parents, they were very clear—this echoes a point that the right hon. Member has made—that if there had been checks, balances and preventive measures in place at an early stage of Jack’s journey into addiction, it could have transformed the tragic outcome when he took his life.

Jack is not alone. According to Public Health England, over 400 people take their lives each year as a result of gambling. A recent Gambling Commission survey, which I think has been mentioned, found that 2.5% of the population—over 1.5 million people—score over eight on the problem gambling severity index.

[Philip Davies]

The hon. Gentleman has repeated this line that over 400 people a year die of suicide as a result of gambling—a figure that has been discredited many times and with which the Gambling Commission certainly would not align itself. Can he tell us how he has arrived at that figure? What methodology has he gone through? I think that when he does explain it, he will realise that it is a discredited figure.

[Paul Blomfield]

I was happy to take an intervention, in contrast with the hon. Member’s approach earlier, but I was simply citing the figures provided by Public Health England. I respect Public Health England, as I am sure—

[Philip Davies]

Will the hon. Gentleman give way on that point?

[Paul Blomfield]

No, I will not.

[Philip Davies]

The figures have been discredited, and it does not accept them any more.

[Paul Blomfield]

I am prepared to accept the figures from an established, respectable national body.

[Philip Davies]

But it does not accept those figures any more.

[Paul Blomfield]

I do not think that this is—

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[Mr Robertson]

My hon. Friend is absolutely right that the black market is a real threat. The tobacco industry may have made a lot of it, but it was because people were turning to the black market. That cannot be denied. A committee I chaired years ago looked into that in some detail. Of course, people did go to the black market, and they are likely to go to the black market because they want to have a frictionless bet that does not cause them a load of trouble. They are already doing it, and we are getting evidence of that regularly.

[Philip Davies]

As ever, my hon. Friend speaks up very well for the racing industry. Was he, like me, surprised to hear the SNP appear to argue that it does not want any income for racecourses from the gambling industry? Does he agree that people at Perth, Musselburgh, Hamilton, Ayr and Kelso will be very interested to hear that that seems to be the view of the SNP?

[Mr Robertson]

My hon. Friend tempts me to go down a road that I am not quite sure I want to go down. The SNP is capable of speaking for itself.

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[Conor McGinn]

I am delighted to have given the right hon. Gentleman that opportunity.

I want to be emphatic about this so that we are very clear: I am here to speak on behalf of Haydock Park racecourse in my constituency in St Helens; I am here to speak up for the 100,000 people who signed this petition—decent, honourable, good taxpayers in this country who have a concern about this issue and a love for horseracing; and I am here to say emphatically that the whole of the horseracing industry, which, if I might cheekily say so, is not widely known for its unanimity on issues, speaks with one voice about its concerns on this issue. I am co-chair of the all-party parliamentary group with the hon. Member for Tewkesbury (Mr Robertson), and this is an interest and an issue that unites people in all parties and across the House.

I want to step back a little and look at the bigger issues. Many of the points that I wish to make have been made already. I furiously agree with the hon. Member for Shipley (Philip Davies) on this—as I do, I fear, on too many issues—and he made a lot of the points that I wish to make.

[Philip Davies]

That admission is far more damaging to the hon. Gentleman’s reputation than it is to mine.

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[Kenny MacAskill (East Lothian) (Alba)]

It is a pleasure to serve under your chairmanship, Sir George.

As is clear from the speeches that have been made so far, there are two aspects to this debate: the question of the regulation of gambling, and the question of the protection of horseracing. The first, I think, requires action, because there is a significant social problem, which is a point that I will come on to and that others, especially the hon. Member for Neath (Christina Rees), made so eloquently.

The second question is that of a debate between the gambling industry and horseracing. We have to differentiate there. After all, the gambling industry, or much of it, is now online, and much of it is now based in Gibraltar, so it is not even paying taxes, whereas the horseracing industry is indigenous, although it is also partly—this inference was made about horseracing—funded by the gambling industry. Yes, that is to some extent a historical anachronism, but it was no doubt done deliberately so that people would not see gambling going to the black market, with other unregulated aspects, whether that was pitch and toss, dogfights or illegal boxing matches. That ensured that a revenue stream went from gambling into horseracing, and that is fundamental.

As the hon. Member for Tewkesbury (Mr Robertson) said correctly, people might think that horseracing is flush. It is not. I, along with others, declare an interest in having horseracing within my constituency, because I represent Musselburgh. Musselburgh has had its challenges, Musselburgh had to be sold and has now been bought by Chester.

At one stage, it even looked like there might not be a buyer, because it is not as if people are lining up as they are for English Premier League—or even Scottish Premiership—football teams. There were redundancies there—I had to intervene and speak to the management about them—but they were done reluctantly, and we have had to accord to that. There are challenges in that sector. Some of this—this is the subliminal aspect—is about the gambling industry reducing the amount of money that it puts into horseracing, because it does not have the same involvement in funding football or anything else, other than the money that it makes from it.

Returning to the primary issue, there is a problem with gambling. We must recognise that people suffer. I am not some libertarian who thinks it is all just free market, with people deciding according to their free will. It is a social problem, exactly the same as alcohol and drugs. We do not un-regulate them and say, “Consume what you like.” We ensure that we know what the product is, and supervise, tax and regulate it. We can argue—I certainly do—that we sometimes go too far on drugs and not far enough on alcohol, but we must ensure that we regulate.

We must recognise that gambling has transformed. I am a child of the ’60s, when gambling was basically done in a bookies. They were foreboding and intimidating places where working men—perhaps in a flat cap—went, where women would not be seen, and that respectable men would probably not wish to be seen going into. They kept very limited hours. When I was young, they always seemed quite intimidatory. I now have a flat in Dunbar, and I can look across the high street and see a bookies. It is open early in the morning until late at night. People of all ages, genders, ethnicities go in—far too many, I must say, much as I am not opposed to people enjoying a flutter.

The whole nature of the industry has changed. As Justice Secretary in Scotland, I remember being briefed by Dr Reith from Glasgow, a world expert in gambling and how gambling has changed. People can now literally lose not just their shirt, but their house overnight if they have multiple credit cards, so there must be regulation. The nature of who gambles has also changed, because ethnic minorities who might not have gone into the working-class, working man’s bookies are now going elsewhere. I remember hearing that in Scotland we had significant difficulties with Polish people and eastern Europeans who were working in the casinos. They socialised in the casinos and therefore developed a gambling problem, because that was where they hung about. Since women and other people who would not have otherwise have gone into a bookies are doing so, we must target and address gambling. We must address the demand, which is why we must look at regulating the sponsorship of football teams and some of the television advertisements that are basically pushed in our faces—we want to watch the football but are inconvenienced by being told to to cash in by betting on the number of corners, and all these things.

That is entirely separate from horseracing. Yes, gambling is an inextricable part of horseracing. If people go to a horserace, they wish to gamble. Some will probably gamble too much and regret it, but most will not. It is a day out in Musselburgh, much as it is in other constituencies. It is an event for people; the ladies day at all racecourses is very colourful, with all hats, dresses and whatever else. People come from far and wide, and it is part of the local economy. I said there had been redundancies, but it still provides employment there and for the hotels, guesthouses and hostelries on race days. People make money, and there is a supply chain of those who provide for the horseracing industry. If we cripple it, we face not only the risk that the likes of Musselburgh will close, but the risk that people will continue to watch and bet on races, albeit those in Ireland, France, Hong Kong or wherever else, as I think the hon. Member for Tewkesbury said. That is why we must protect it and get the balance right.

As Justice Secretary in Scotland, I remember bringing in quite firm legislation on the sale of alcohol. I think it was correctly done. Equally, I remember being criticised at some stage because I gave the licence back to Murrayfield stadium. People asked, “How can you be cracking down on alcohol and yet allow an alcohol licence in Murrayfield?” I answered that we are not against alcohol, in exactly the same way that we are not against gambling; we are about ensuring that it is carried out in a safe and secure manner, that it is regulated, and that people can be protected—sometimes even from themselves. That is why I believe action has to be taken on these social problems. We are our brother’s and our sister’s keeper.

The result on Saturday may not have gone the way most Members here, other than the two of us from Scotland, wanted, but the match will have been enjoyed. It was better that people went to the stadium and had a few drinks consumed safely and under supervision, rather than sitting in a park drinking cans or bottles and then rushing to the game late. That is why, in alcohol legislation in Scotland, when I was Justice Secretary we were always very supportive of the on-trade. We much preferred people to go to a public house where the alcohol industry wants to sell a premium product—at a premium price for them—in a manner that is safe and secure and from which they can benefit. That is much better than people being sold almost unlimited supplies of high-strength, low-price alcohol from supermarkets or elsewhere.

There are corollaries with gambling. What we have to do is stop people losing their shirt, never mind their home, through games of chance or puggy machines—or whatever sophisticated name they have now—sitting in betting shops. People can go online and, as I said, get a credit card and literally see their savings disappear. What we cannot do is undermine where people can go and have a flutter and enjoy themselves as part of a day out.

[Philip Davies]

The hon. Gentleman is making a very interesting speech. May I refer him to the comments made by the hon. Member for St Helens North (Conor McGinn)? He made it clear that without the levy income that horseracing generates from online betting, Musselburgh and other racecourses would not exist for having a nice day out and a bet at the ring. The income the horseracing industry gets from online gambling is absolutely critical for horseracing to continue in this country.

[Kenny MacAskill]

I said at the outset that I am conscious that Musselburgh and other racecourses have to get income from the gambling industry. If people now gamble more online as opposed to going to the betting shop, even the one opposite me in Dunbar, that has to be accepted. We have to separate the gambling that is being sold in every shape or form, as it is, and entertainment, because that is what horseracing is. Gambling is a legitimate part of it and sustains it. Obviously, the industry seeks to make more money out of encouraging people to bet and gamble on football; it does not put the same money in, except in terms of shirt advertising or whatever else, and it does not benefit the grassroots game or any club. The Government have to make sure they take the necessary action against gambling, not those who are at the turf in such places.

I fully accept the point made by the hon. Member for Shipley that people now place bets not by going into a betting shop, but on their phone—not even on their computer. However, we should provide protection for what is an industry. It may be an anachronism; one could argue that other sports should get the benefit, but we are where we are, and we have to recognise that as a society. On that basis, we have to differentiate horseracing, which needs to be protected and which we want to encourage people to participate in because their gambling will be supervised, moderated and part of a culture, and other gambling—as I said, it is like drinking in a pub as opposed to drinking in a public park.

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[Stephanie Peacock (Barnsley East) (Lab)]

It is a pleasure to serve under your chairship, Sir George. I refer to my entry in the Register of Members’ Financial Interests.

The fact that over 100,000 people have signed the petition on financial risk checks in less than a month shows the strength of feeling on the topic. I pay tribute to my hon. Friend the Member for Neath (Christina Rees) for leading this important debate. This issue is important to everyone who offered their signature, as well as to the gambling and racing industries, which want to be sure that the checks are truly frictionless before they are rolled out. It is also crucial for organisations and families who are concerned about gambling harms and want confirmation that the updated regulation in the gambling White Paper will be going ahead. The Government must be able to strike that balance, as they have promised.

I would like to set out the context for introducing financial risk checks as part of the gambling White Paper more broadly. Half of adults across the UK gamble each month. The vast majority do so safely, moderately and in a way they enjoy. I remember my nan going to bingo every week when I was growing up, and I have always enjoyed going to the races—I was pleased to attend the St Leger last year. For some, however, gambling can become a more serious problem: 300,000 people across the country experience problem gambling, and 1.8 million are considered to be at elevated risk.

The last time gambling laws were updated was back in 2005. Since then, the landscape has changed dramatically. Thanks to our tablets, laptops and phones, most people now have the potential to carry a casino in their pocket, meaning that they can gamble anywhere and make huge losses in a very short time, as my hon. Friend the Member for Swansea East (Carolyn Harris) outlined; I really appreciate the work that she has done over many years in this area. Because of that rapid growth in technology and our growing awareness of the impact of gambling harms, changes to our gambling regulation are now long overdue.

In my time as shadow gambling Minister, I have met those who are recovering from addition, as well as family members who have suffered the unimaginable pain of losing a loved one. For those people, it is absolutely clear that gambling harm has the potential to be devastating, and that more must be done to ensure that families are protected, as my hon. Friend the Member for Sheffield Central (Paul Blomfield) spoke powerfully about.

Affordability checks form part of the new, modernised system of gambling regulation that is fit for the future. Accompanied by other measures such as online stake limits, data sharing between gambling firms and a crackdown through the regulator on black market activity, they will ensure that the law does more to protect children and adults who are vulnerable to harm.

The right hon. Member for Chingford and Woodford Green (Sir Iain Duncan Smith) spoke about how early intervention in the form of checks can make a difference and change the course of addiction. That may well be the case—it is important to make early interventions if we can—but it strikes me that there is a piece missing, because it is not clear what intervention will take place as a result of the checks. This is perhaps not an issue that we can solve here today, but it needs to be considered in the wider context of the White Paper.

As colleagues have outlined, it is also important that our regulation recognises that many people enjoy betting safely and without harm; the hon. Member for Shipley (Philip Davies) outlined that point robustly, as always. The Government must therefore be clear on how they will actually go about ensuring that affordability checks are accurate, frictionless and non-intrusive for consumers, as they have promised. I will conclude my speech with a number of specific questions for the Minister, but I will first speak briefly about why, in this context, the racing industry in particular is concerned about the nature of the checks.

Many Members have spoken about the impact that racecourses have in their constituencies, and I will try to list them. We had the hon. Member for Bath (Wera Hobhouse), the right hon. Member for West Suffolk (Matt Hancock) with Newmarket, the hon. Member for Windsor (Adam Afriyie) and the hon. Member for Tewkesbury (Mr Robertson) with Cheltenham. The hon. Member for St Helens North (Conor McGinn), who is a huge champion for the industry, spoke about his racecourse, Haydock. The hon. Member for East Lothian (Kenny MacAskill) spoke about Musselburgh, and the hon. Member for Waveney (Peter Aldous) spoke about the economic benefit of racecourses in such areas. Apologies if I missed anyone out.

Last week, I hosted a roundtable with representatives from the racing sector, including those who started today’s petition. They shared their thoughts on the potential unintended consequences of the checks, which the hon. Member for Mid Norfolk (George Freeman) spoke about very powerfully. Racing and gambling have a naturally symbiotic relationship, with the success of each industry somewhat dependent on the other. With more than 5 million spectators enjoying a trip to the races each year, it is clear that many people enjoy the combination too, making it the country’s second favourite sport. However, as a result of the partnership, the Government predict that the White Paper will cost the racing industry £14.9 million, with the British Horseracing Authority saying that that could rise to almost £50 million a year when considering the impact of the levy, media rights deals and overall funding.

In turn, as we have heard today, such losses could lead to lower prize money, decreasing participation, job losses in the rural economy and an overall decline in the sport. It is important for racing that the Government and the Gambling Commission work with the industry to ensure that financial risk checks are truly frictionless, targeted and accurate.

[Philip Davies]

The hon. Lady is being very generous, and I commend her on being knowledgeable on the subject. I have a lot of time for her, as she knows. Based on what she said, would she support the calls that we have heard from many hon. Members today that perhaps a distinction should be made between games of skill and games of chance? I took from what she said that that would probably deal with the two separate issues she referred to.

[Stephanie Peacock]

I understand that argument, and I have some sympathy for it. However, I do not think that we can carve out horseracing in particular as being free of harm; I simply do not think that is the case. Of course the harm for the horses is less than some, but it is greater than others. We need to strike a balance. I am sympathetic to the argument made by the hon. Gentleman, and I am sure that the Minister will pick it up when he speaks. That is also why it is right that we should work to find a future-proof settlement on the horseracing betting levy, which contributes about £80 million to £100 million to the sport. I hope therefore that the Minister can update us on how the review into that is progressing.

Let me move on to the specifics of how the checks will be conducted. The Minister must be clear on how friction will be removed from the system. Indeed, in those rarer cases where it is proposed that bank statements or payslips might be needed as part of an enhanced check, it is unclear just how frictionless the process could possibly be. Concerns have also been raised with me about the value of using net losses alone without combining them with other markers of harm to prompt an affordability check. As a result, it would be helpful if the Minister could set out in full the latest thinking on how the checks will be conducted, so that they are accurately targeted and have limited user input. In the absence of that, can he let us know when we might expect a full response to the consultation?

The Gambling Commission confirmed late last week that the lower-level checks will use only publicly available data and will run on higher thresholds to start with. It also said that for enhanced checks there will be a pilot to test the details of data sharing. Can the Minister confirm the pilot to the House today and outline how the Department will work with the commission, credit agencies and the gambling industry to ensure its smooth running? Further to that, it would be reassuring if the Minister could set out how the pilot and higher threshold period will be evaluated. For example, what issues will the commission look out for, and what criteria will define success? It is important that we get that right. If the checks are not frictionless or are more disruptive than genuinely useful to those who are at risk, there is a risk that customers will be driven from the regulated industry to the black market, where there are no safer gambling protections whatsoever. That is a real concern, as has been spoken about today.

There is consensus on the need to update our regulation so that vulnerable people are better protected from gambling harms in the modern age. However, at the same time the punters, racing and the gambling industry deserve some clarity about how the Government will ensure that affordability checks are carried out with accuracy and in a way that does not cause unnecessary friction for those gambling responsibly. I look forward to hearing from the Minister how the Department plans to strike that balance.