Bettors Charter – punting on fairness?

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Bettors Charter – punting on fairness?

The Horseracing Bettors Forum, an independent body set up with the BHA to highlight issues relating to betting customers, has released a 10-point “Betting Charter”. The key points include:
  • The need for “advanced protection of punters’ funds”
  • The need to “deal appropriately with problem gambling”
  • The need for Terms & Conditions which are “helpful, concise and transparent”
  • The desirability of “minimum bet commitments”, at least in certain circumstances
  • The requirement that punters in return “comply with rules and obligations, providing they are fair, reasonable and transparent”
The HBF, supported by the BHA, is now seeking to have its charter implemented by UK-facing bookmakers.

Some of this is apple pie: no operator would question the need to “deal appropriately with problem gambling”, though many might be wary of joining a club which might start moving standards in a direction that might not be felt appropriate (one size does not fit all, though this can easily be fixed through clear terms of reference and an already consultative process).

Some of it is becoming a requirement anyway: T&Cs are a key area of focus of both the Gambling Commission and the CMA and we are likely to hear (much) more on this issue in the coming months.

However, some suggestions are likely to be more controversial. Giving ‘punters’ the right to ignore rules and obligations if they are decided (by whom?) to be unclear or unreasonable is one (although we doubt the clause was meant that way so can be easily fixed); enshrining minimum bet commitments (ie, a bookmaker will lay a bet at the quoted price up to a certain staking level regardless of who the customer is) is another. These sticking points could easily see a well-meaning and topical drive for customer-centric transparency wither on the vine: the RGA has already announced that it cannot formally support the Charter, while recognising its ‘good intentions’.

We ask, does this matter and can a solution be reached?

The purpose of the Betting Charter clearly matters and is very timely. The CEO of the Gambling Commission, Sarah Harrison, has made it clear on a number of occasions that gambling licensees, and the evolution of gambling regulation, should be putting the customer first, eg:

“we will use the full range of our enforcement powers to ensure operators put customers first and raise standards” in the introduction to the new enforcement strategy earlier this year, and; “We will push the industry to deliver a high quality and fair consumer experience” at the Raising Standards conference last month.

From a top-down perspective, the Betting Charter clearly attempts to do just that. A coherent case could be made that the HBF only represents some stakeholders of a very disparate and difficult to access group (in terms of underlying views), and only through the prism of one sport. However, with the absence of any other consumer groups, or trade bodies adequately “putting the customer first” (as evidenced by the growing list of industry issues on the matter), someone needs to get the ball rolling.

Equally horseracing is the ‘traditional’ betting sport of choice (with still over £1.1bn in GB betting revenue: only 4% smaller than football across channels) and it is arguably the behaviours of an adversarial niche a generation ago (wily bookies + racing insiders vs. sharp punters) that have translated so poorly into a world of mass market visibility and growing awareness of both consumer rights and integrity issues. This might not be the perfect place to start, but in the absence of anything better, but we believe it is a pretty good one.

Looking at the issue the other way around, given the urgent need to “put the customer first”, it is neither logical nor politic to ignore a consumer group’s attempts to do just that, in our view.

If engagement is a good idea in principle, how far apart might the two stakeholder groups be in practice?

A clause that could be read by those so minded as inciting customers to evade T&Cs they do not deem reasonable is possibly inflammatory, but this is a form of words which can be tidied and made acceptable: on first principles, an exhortation for customers to respect the commercial rights and terms of business of bookmakers is unlikely to be controversial and should add balance.

The requirement for bookmakers to accept bets up to a certain value limit regardless of how ‘sharp’ the customer is, is likely to be a far more significant issue. Philosophically, it represents the collision of two world views: the customers’ perceived right to bet at an advertised price on the basis that the bookmaker is in the business of ‘risk’, vs. a bookmaker’s right to make money through whatever liability management it deems fit, including not serving the demonstrably better informed. Here, the very use of the word right is something of a misnomer (however aggressively bandied about) – no human rights are involved in something as inessential as betting: this is about commercial logic. Here, we think commercial logic is shifting faster than more traditional bookmaker attitudes.

A generation ago, horseracing bettors knew what they were getting: imperfect information, high over-rounds, ‘managed’ SPs (with off-course bookies betting on-course), and a sport with its fair share of ‘integrity issues’; but that was part of the game, and a largely anonymous cash-based model was ripe for the determined punter to profit from. Ironically, the very things which should have improved the punters’ chances: more accessible information, betting exchanges, price competition; has just led to bookmakers restricting accounts more aggressively (managing liabilities, rather than risk), while a few have continued to engage with sharp practice with racing insiders (eg, the recent Ladbrokes – Evans case). Indeed, it is harder for a sharp punter to make money now with 20 accounts, the ability to lay, specialist information and over-rounds of 106, than it was with access to a landline, a few LBOs, a copy of the Sporting Life and over-rounds of 120…

The basic problem with this restrictive approach is that it plays by the old rules: cat and mouse works when the customer knows, accepts and even enjoys the notion that they are playing the role of mouse. In a niche environment (however large) where customers are brought into something approaching an exclusive club, this works fine. However, when the general public is subject to mass advertising and nearly 10 million Britons have online gambling accounts (there are nearly 30m active accounts across all products), this rule book needs to be re-written or it will confuse and put off customers (there were more new account registrations in the year to March 2017 than active accounts: a clear sign of inefficiency and customer engagement issues). Equally, recent experience in Australia suggests that minimum bet guarantees can work for both bettors and bookies alike, especially by building trust (and none of the UK bookmakers involved – Paddy Power Betfair, Labrokes Coral, William Hill – have warned on Australia performance because of these measures). Further, if trust is not improved and customers who appear even vaguely successful are made unwelcome at any price, then a commercial-regulatory backlash is more than remotely possible.

The Bettors Charter is therefore a useful signpost for an industry at a crossroads: it can seek ways to engage with consumers in an open and transparent way (however initially imperfect), or it can continue to focus on ‘losers’. However, if the industry chooses to behave as if it is dealing with a niche, then the regulatory environment is likely to make that wish come true…

Paul Johnson contributed to this blog, who sits on the HBF