ARC Panelists Debate Betting Exchanges
by Amy Whitfield
Date Posted: 5/24/2005 1:24:23 PM
Last Updated: 5/25/2005 7:52:33 AM

Betting exchanges were a hot topic at the 30th Asian Racing Conference Tuesday as representatives from Australia and the United Kingdom went head to head on the issue of online betting sites and their impact on the future of horseracing.

Candid opinions, mostly critical of the UK's allowance of the betting site Betfair.com, sprung from a 15-member panel arranged to discuss the future relationship between wagering and racing in Asia and across the world. Twenty Asian countries are represented at the conference being held in Seoul, Korea this week.

The heated discussion resembled a similar debate on betting exchanges during the Symposium on Racing in Tucson, Ariz., last December, between those viewing betting exchanges as inevitable competitors to current wagering systems, and those who view them as an imminent financial and integrity threats to the sport.

Peter Fletcher of Tabcorp, an Australian gaming and wagering company, escalated the conversation Tuesday morning when he said the allowance of Betfair "is clearly the worst mistake in the history of government racing administration and the second worst mistake has been the refusal of the British administration to admit they actually made an error."

Fletcher's comment met a burst of applause from the audience.

Internet betting exchanges, which allow handicappers to bet on or against a horse to win or lose, are considered illegal in the U.S. and most countries besides the UK and Ireland. Betfair is the most popular of such Internet exchanges, which have been accused of accepting wagers from people in countries where exchanges are illegal and in some cases taking data and simulcasting signals without authorization. The main concern is these illegal sites don't financially contribute back to the industry.

Fletcher maintained betting exchanges pose a severe and direct threat to the wagering market, betray customer confidence in the product, and threaten the image of the racing industry.

Tristram Ricketts, secretary general of the British Horseracing Board, was the sole betting exchange advocate on the panel,who, minutes before Fletcher's inciting comment, said betting exchanges "were popular with the British punters, they're seen by the United Kingdom government at least as a form of competition to the bookmaker and they are here to stay."

Betting exchanges may have staying power in the UK if they are properly regulated, equitably taxed, and contribute adequately to the horseracing industry, as Ricketts pointed out they should, but the idea of sanctioning the sites elsewhere, like Australia, has been and will be met with much opposition if the ARC panel is a true representation of global interests.

Hong Kong journalist and panel member Murray Bell said he thinks the betting exchange debate is more about economics than the integrity issue.

"I think the integrity issue is much more a scare tactic," Bell said.

Maurits Bruggink, executive director of the International Federation of Horseracing Authority said that his organization is continuing its efforts to protect intellectual rights and the integrity of the sport through a three-prong action plan, including a racing trust mark.

"This racing trust mark aims to encourage betting Web sites to make contributions to racing," Bruggink said. "It gives those sites a tool to market their sites as ones that support the racing industry and respect our Good Neighbor policy. And it also shows consumers, the punters, that they are paying for an unpirated product. We hope to present this trust mark in October this year."

Last October Japan became one of the horse racing authorities of 50 countries which agreed with the IFHA's basic principles concerning the provision of cross-border betting services.

The provision on wagering is referred to as Article 28 or the Good Neighbor Policy. The two basic principles are: no one should be permitted to offer betting possibilities on races without having the express agreement of the racing authority staging those events or the rights holder of the racing data and pictures. Secondly, no one should offer betting possibilities to people living in countries where it is forbidden by law.

"It's difficult to enforce the Good Neighbor Policy on the Internet, but it's not impossible," Bruggink said.

Japan, like America, has taken other measures to prevent illegal betting exchanges by working with major credit card companies, like Visa, to notify bettors not to use credit cards on questionable betting sites.

When asked by an audience member what measures Asian racing countries could take toward protecting their wagering products, Bruggink suggested racing authorities should continue to work with credit card companies and representatives should educate their governments and racing authorities about new technologies like geo location software that could simply identify where bets are coming from and stop transactions accordingly.

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