"High Stakes, Low Understanding: Why Ministers and Civil Servants Misjudge Betting and Racing"

Imagine an orchestra led by someone who can’t read music. The conductor confidently waves their baton, oblivious to the cacophony they’re creating. That, dear reader, is how ministers and civil servants often seem when meddling with horseracing and betting markets. Well-meaning but woefully uninformed, they’re trying to reform a world they clearly don’t understand—and the cracks are starting to show.

The Minister’s recent speech at the GambleAware (6th December 2024) conference showcased a carefully balanced tone: tough on gambling harms, sympathetic to industry concerns, and keen to preserve the charm of a “flutter on the horses.” But beneath the polished rhetoric lies a glaring truth: the Government doesn’t fully grasp how betting markets work or why high-stakes gamblers are vital to racing’s survival.

High Stakes, Low Risk: The Misunderstood High-Rollers

Let’s start with the high-stakes gamblers—the big bettors who might wager thousands on a single race. These individuals are often the lifeblood of betting turnover, and by extension, horseracing itself. They are also the group most alienated by the Government’s intrusive affordability checks, which now require punters to submit payslips, bank statements, or other proof of income to justify their spending.

To civil servants drafting these policies, a five-figure bet seems reckless, a red flag screaming “problem gambler!” But the reality is often far more nuanced. Many high-stakes bettors are wealthy, financially stable, and fully capable of managing their risks. They treat betting as a calculated investment, not a reckless punt, and their losses are well within their means.

Yet the current regulatory framework treats every high bet as a potential danger, throwing up barriers that drive these bettors away—not just from betting, but from the horseracing ecosystem that relies on their turnover. The result? A significant decline in revenue for both bookmakers and the sport itself.

Betting Markets: A World of Complexity

To fully understand the damage being done, you need to grasp the symbiotic relationship between betting markets and horseracing. Bookmakers set odds based on a complex interplay of form, public sentiment, and market liquidity. High-stakes bettors play a crucial role here, providing the liquidity that sharpens the odds and ensures markets remain competitive.

When these bettors are pushed out by excessive regulation, the ripple effects are profound. Liquidity dries up, odds become less competitive, and the betting experience suffers for everyone—from the casual weekend punter to the lifelong racing enthusiast.

Do ministers and civil servants understand this delicate balance? Judging by the policies they’re implementing, the answer appears to be a resounding no. Instead of recognising high-stakes gamblers as a stabilising force in the market, they’re being treated as liabilities to be managed out of existence.

Horseracing’s Unique Dependence on Betting

Unlike other sports, horseracing’s financial ecosystem is uniquely intertwined with betting revenue. The Horserace Betting Levy ensures that a portion of bookmaker profits flows back into the sport, funding prize money, infrastructure, and grassroots development. This means that anything impacting betting turnover—like the exodus of high-stakes punters—has a direct and immediate impact on racing’s viability.

Yet, this crucial relationship seems lost on policymakers. The Minister’s speech was full of platitudes about balance and collaboration but offered no concrete solutions to the existential threat facing horseracing. Instead, the focus remains on measures like stake limits and affordability checks, which may work for online casinos but are ill-suited to the nuanced world of betting on horses.

A Case of One-Size-Fits-All Regulation

The core problem lies in the Government’s one-size-fits-all approach to gambling reform. While it’s true that online slots and high-stakes casino games pose significant risks, betting on horseracing is a fundamentally different proposition.

For one, racing bets are often driven by knowledge, analysis, and strategy—traits rarely associated with problem gambling. High-stakes bettors aren’t feeding coins into a faceless machine; they’re studying form guides, tracking odds, and making informed decisions. Treating them as if they’re addicted slot players is not only misguided but actively harmful to the sport’s future.

The Consequences of Misjudgment

The result of these regulatory missteps is a perfect storm of declining revenue, alienated punters, and a horseracing industry struggling to stay afloat. Attendances at flagship events like the Cheltenham Festival are already down, betting turnover is shrinking, and prize money is stagnating. Meanwhile, the high-stakes gamblers who could help reverse these trends are being driven away by policies that fail to distinguish between risk and responsibility.

This isn’t just bad for horseracing; it’s bad for the Government’s own goals. After all, a thriving horseracing industry generates jobs, tax revenue, and cultural value. But you can’t have a thriving industry without the bettors who keep it going—and right now, they’re being treated as an afterthought.

What Needs to Change?

If the Government is serious about creating a balanced and sustainable gambling environment, it needs to rethink its approach. That starts with acknowledging the unique role high-stakes bettors play in horseracing and designing policies that reflect this reality.

Affordability checks, for instance, could be tailored to focus on genuine signs of problem gambling—like erratic spending patterns or escalating losses—rather than arbitrary thresholds that penalise responsible high-stakes bettors. Similarly, more nuanced market research could help policymakers understand the ripple effects of their decisions on betting liquidity and horseracing’s funding streams.

Final Thoughts: A Gamble Without Understanding

The Minister’s speech may have been well-intentioned, but it underscores a worrying lack of understanding about the complexities of horseracing and betting. By lumping high-stakes gamblers and strategic bettors into the same category as at-risk slot players, the Government is undermining the very ecosystem it claims to support.

Horseracing isn’t just a sport; it’s an economic and cultural institution. But without the bettors who make the markets tick, it risks becoming an empty shell—a shadow of its former self.

The question is whether ministers and civil servants will take the time to truly understand the industry they’re regulating, or whether they’ll continue to gamble on policies that risk breaking the system altogether. Right now, the odds don’t look good.