Account closures and restrictions are making racing bettors angry, but there is an answer

RAcing secured its biggest win for many years in last month’s budget. The threatened harmonization of tax rates for betting and gambling was not simply averted, but thwarted, with the difference between the two rates becoming significantly larger. Meanwhile, as an added bonus, racing was excluded from the small increase in the excise rate for betting on football and other sporting events.

Now that we’ve celebrated victory, the next step is to ensure the benefits are maximized. And since racing has, relatively speaking, just become a more attractive product for bookmakers, there’s no better time to tackle one of the biggest hurdles many punters face when looking to bet on horses.

That barrier consists of account closures and restrictions on gamblers who are (or appear to be) smart enough to make a profit from their bets in the long run. A gambler tries to take an advertised prize, sometimes for as little as £10 or £20, but the computer says no and instead offers a ridiculous alternative bet of a few cents.

Everyone in racing knows this has been happening for years. It makes a mockery of the Gaming Commission’s mission to ensure gambling is “safe, open and fair.” And yet many of the sport’s biggest fans and students are told every day that their money is not wanted – at least in the regulated market.

All this despite the fact that a potential solution – a minimum betting rule (MBR) – has been in place in most Australian jurisdictions for a decade or more. In Victoria, for examplehome of the Melbourne Cup, operators are of course required to set an advertised price on ‘metropolitan’ (i.e. major) races to lose a minimum of $2,000 (£995) on a win bet, while the minimum for non-metropolitan – or ‘bush’ races – is $1,000.

Ladbrokes and Bet365 are among the well-known gambling brands that are successfully active in Australia with an MBR. Yet bookmakers have always opposed the introduction of a similar rule in Britain, claiming it will impact the bonuses and offers available to punters, such as “Best Odds Guaranteed” when a punter takes a prize and the final SP is greater.

However, if this statement sounds strangely familiar, it could be because a similar argument was put forward as a reason why excise duties in general – and rates on gaming products such as online gaming machines in particular – should not be increased in the budget. Michael Dugher, the chairman of the BGC, said it was “simply naive” to think it would escape a major increase in online gaming duty unscathed, or that the black market would not benefit from a subsequent rise in margins in the regulated sector.

However, as other voices, including former Prime Minister Gordon Brown, have noted, the multinational gambling companies are willing to pay 50% or more taxes on their gambling winnings in some US jurisdictions. And despite all the dire warnings, not to mention the BGC’s banter with Rachel Reeves and Labor MPs at the conference, the Chancellor has effectively doubled the tax on online gambling, from 21% to 40%.

It appears the wheels of the gambling industry’s once well-oiled lobbying machine have come loose. Predictions of impending doom no longer carry much weight, not least when there are case studies elsewhere proving them wrong. This is certainly the time for the Gaming Commission to take a closer look at the restrictions.

This does not mean that the black market is not a problem, but it is in everyone’s interest – including the treasury – to maintain gambling turnover in the regulated sector. The budget also included £26 million for the Gambling Commission over the next three years to tackle the threat from the unregulated sector. Either way, nothing has done more to push gamblers into unregulated businesses over the past twenty years than gamblers being told their business is not welcome.

The MBR model is there for all to see in Australia, and the Gambling Commission needs no reminder of the continued dishonesty of bookmakers refusing to take a bet. It’s been a long time coming, but perhaps the right time for the MBR has finally arrived.