Australia Could Open Wagering Industry to Competition

28 June 2004

Australia's federal government is beginning to indicate which direction it will take in dealing with betting exchanges and the interactive gaming industry.

The Australian reported Thursday that Prime Minister John Howard will likely announce soon that the government will allow international competitors and the licensing of betting exchanges.

It's not official, but industry sources are saying that Australia's bookmakers and TABs will lose their fight to prevent offshore bookmakers from competing against them.

The rumors come more than a year after a review of the 2001 Interactive Gambling Act (IGA) commenced. A host of groups and trade associations, from banking to casinos, have weighed in on both sides of the issue.

The policy move expected by the federal government would be particularly beneficial to the betting exchange industry, of which leading exchange Betfair has a market share of roughly 90 percent.

Despite the rumors, however, officials with Betfair aren't celebration yet.

"We haven't gotten any notification one way or the other, and I am not about to guess what they government will do even with these reports out there," said Betfair Communications Director Mark Davies. "We have said all along though that the only real argument against us is a competitive one. Hopefully the government realizes that our competition is good for them and good for the consumer."

A green light for betting exchanges would mean that an intense campaign from the TABs, led by the New South Wales TAB, will have gone for naught. The TABs recently ran ads in newspapers across Australia and placed commercials on various television programs encouraging the government to keep exchanges from legally entering the market.

Despite its public and vehement opposition to exchanges, including commercials stating that exchanges would "undermine the integrity of all sporting events," the NSW TAB has registered its own betting exchange trademarks.

Graham Cassidy, a spokesman for the TAB, said for competitive reason the company would have to launch its own betting exchange if the government gives the go ahead to Betfair and others.

"We are vehemently opposed (to betting exchanges)," Cassidy said, but if it becomes an issue of the federal government not banning them and they become part of the infrastructure of wagering in this country, then we'll be reluctantly joining the queue."

Davies and other executives with Betfair have been in talks with government officials throughout Australia and have offered to match license fees paid by the TABs in all states and territories. The TABs argue that giving Betfair legality would take away tens of millions of dollars from the TABs and effect what they pay back to racing and the government.

Betfair has said all along that it is willing to pay the same percentage of revenues-- believed to be 20-40 percent--as the TABs.

Betfair has also been in talks with officials from the Australian Football League, National Rugby League, Australian Rugby Union and Tennis Australia in an effort to set up a compensation structure in exchange for Betfair using league data.

The group also signed a memorandum of understanding with the Australian Cricket Board, giving the board access to betting records to help it investigate corruption.

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