John Gosden said it best.
“They’ve let a quango in the Gambling Commission set the rules and force it through without a parliamentary debate.”
The legendary trainer and six-time British champion did not hold back when discussing the tightening of financial risk assessments, commonly referred to as affordability checks, in the UK.
“We’ve a wonderful industry but the government seem to pay no attention,” Gosden said.
“This bizarre rule will send punters to the black market. It is the most ridiculous policy.”
Strong words, but Gosden has gone directly to the heart of an issue that should concern racing administrators, governments and punters well beyond Britain.
Racing is at an inflection point.
Certainly in the UK and Australia, and arguably across much of the racing world outside the more tightly controlled jurisdictions of Hong Kong and Japan, the sport is facing enormous challenges.
Wagering turnover is under pressure, the cost of participation is rising and racing is fighting harder than ever for eyeballs in a crowded entertainment market.
At exactly the wrong time, governments and regulators continue to make it more difficult or expensive for people to bet through legal, regulated wagering operators.
The UK Gambling Commission’s decision to push ahead with mandatory financial risk assessments is the latest example.
The Gambling Commission says the vast majority of assessments will be frictionless, but British racing clearly does not share its confidence that punters will avoid intrusive requests for personal financial information.
The British Horseracing Authority believes the policy could cost racing up to £250 million over five years, a significant blow for a sport heavily reliant on betting turnover and the levy it generates.
The warning signs are already there.
Online betting turnover on British racing fell to £8.37 billion in the year to March 2024, down from around £10 billion just two years earlier. Racing industry figures have described the real-terms decline over that period as a £3 billion black hole.
At the same time, research from H2 Gambling Capital estimates offshore betting turnover in the UK has surged from around £5 billion in 2019 to £16.6 billion in 2025.
It is impossible to say every pound disappearing from the regulated racing market is finding its way offshore, but the direction of travel should terrify governments and regulators. Regulated racing turnover is falling while the illegal market is growing rapidly, yet the response is to place more barriers in front of people wanting to bet legally.
As Gosden put it: “If someone wants to have a bet, you’re not going to stop them, they’ll just go to the black market, which is terrible for the industry, terrible for the government, no return, but also no protection for the person having a bet.”
That last point is critical.
The entire justification for affordability checks is consumer protection, but there is no meaningful protection for a punter who moves to an illegal offshore operator. There are no effective responsible gambling controls, no guaranteed withdrawal process, no tax return to government and no levy flowing back to racing.
Betting is legal, and most people who put money on a race or a game do it responsibly. It’s social. It’s a night out, essentially, another way people spend their leisure time and money.
Think about it: a group of mates having a punt on Saturday isn’t really different from going to the movies, grabbing concert tickets, or splitting a few bottles of wine over pasta. All of it costs money. The one quirk with betting is you might actually walk away with more than you started with.
None of this means gambling harm isn’t real. It is, and we need proper consumer protections, targeted intervention where it’s needed, and support services that are funded well enough to do their job.
But there’s a world of difference between protecting people who are genuinely vulnerable and treating every punter as a problem gambler waiting to happen.
Policy makers also need a better handle on how people actually respond to regulation. There’s an old idea in economics, the Laffer curve, that says beyond a certain point, higher tax rates can actually shrink government revenue, because people change their behaviour in response. Tax something hard enough and you eventually choke the legal market you were trying to tax in the first place.
Affordability checks aren’t a Laffer curve scenario in the technical sense, but the lesson underneath is the same one. Add enough cost or friction to a legal market, and you can’t assume people will just keep behaving the way they always did.
Australia should be watching Britain closely.
I have previously written about the offshore drain threatening Australian racing’s funding model. Research cited in that piece found the Australian illegal offshore betting market had doubled since 2019, with Australians losing an estimated $3.9 billion a year to operators that pay no local tax, offer no meaningful local consumer protections and contribute nothing back to racing.
Almost half of the punters surveyed about their reasons for betting offshore pointed to better odds.
That matters when discussing taxation.
Over the past eight years, Point of Consumption Taxes have spread across Australia and, in several jurisdictions, increased sharply. Licensed wagering operators also pay race field and product fees, GST and carry an ever-growing regulatory cost burden.
Governments seemingly assume the legal wagering market will simply absorb each additional cost and continue as before.
But markets don’t work like that.
Higher costs influence the price offered to the customer, putting pressure on odds and promotions while making it harder for smaller bookmakers to compete.
Keep making the regulated market more expensive and less competitive, and the illegal market becomes more attractive. Add excessive friction or intrusion and you give punters another reason to look elsewhere.
The comparison with tobacco is often dismissed, but I believe there is a warning in Australia’s experience with cigarettes. As taxes and prices continued to rise, the illegal tobacco market became an increasingly serious problem.
Different product and vastly different health consequences, but the behavioural economics lesson is relevant.
Make a legal product sufficiently expensive, intrusive or difficult to access and a section of the market will seek an alternative. The black market is more than happy to provide one.
That is why Gosden’s comments should resonate in Australia.
Racing needs sensible regulation, wagering operators must meet high standards and vulnerable customers need genuine protection. But government overreach on taxation and wagering reform represents one of the greatest threats to the future funding of the sport.
Pleasingly, the Australian Government appears to have taken a more pragmatic approach with its proposed wagering advertising reforms.
Its decision to recognise the fundamentally different context of racing compared to other sports, with dedicated racing channels and programs exempt from the proposed restrictions, is common sense. The government’s own impact analysis acknowledges the intrinsic commercial link between racing and wagering.
It shows regulation does not have to be a blunt instrument and legitimate community concerns can be addressed without pretending racing and wagering exist independently of one another.
Britain’s experience should serve as a warning.
Gosden said it best.
The inflection point for racing is here. Hopefully, in Australia, we haven’t already passed it.
