Australian Racing Board Launches Assault on Betfair

2 September 2004

In its latest move to keep betting exchanges illegal Down Under, the Australian Racing Board filed papers this week with the Australian Federal Police in hopes of getting a formal investigation into British exchange Betfair's business model.

The action follows a mid August meeting in which the board devised a multi-pronged battle plan for the war against the exchange industry.

Andrew Harding, the chief executive of the ARB, said those in racing opposed to Betfair would be analyzing "every aspect of their operations."

The board is pushing for sanctions against Betfair, among them uniform state and territory laws to outlaw betting with a foreign wagering operator. The ARB's legal team is also looking into whether Betfair breached copyright laws by using local racing data on its site without proper permission.

The racing industry continues to argue it will not receive the same returns from Betfair as it does from TABs and that betting exchanges undermine the integrity of racing by allowing bets to be placed on runners to lose races.

The ARB at its August meeting considered a detailed submission from Betfair outlining extensive financial and integrity issues, but was not swayed.

"Betting exchanges present the greatest threat to Australian racing as we know it in the 170-year history of our sport," ARB Chairman Andrew Ramsden said after the meeting. "Betting exchanges have no place in Australian racing and threaten the very existence of the sport and its long-term sustainability."

Ramsden said the federal government forced the ARB's hand by opting out of amending the Interactive Gambling Act to outlaw betting exchanges (ultimately leaving the issue in the hands of the states and territories).

"For the past 18 months, we have been prepared to work within the federal government structures and await the outcome of their recent IGA review," he said. "Now that they have said this is a matter for the states, we will be taking the fight up at every level to make sure betting exchanges are shown the door and sent home."

Harding said the ARB looked over a two-volume report from the Racing Ministers' Betting Exchange Taskforce before hatching its plan of attack against the exchange industry. The beginning stages of the strategy, he said, are starting to play out. In addition to seeking help from the federal police, the ARB has started lobbying efforts through each state and territory to change the rules of racing to outlaw exchanges.

If the laws aren't changed in each state and territory, Harding said, the board will consider legal action against betting exchanges that operate in Australia.

"To date, we have expended a lot of our time working through this issue which we all acknowledge is complex and involves a number of layers of government and industry," Harding said. "There is no question about the way forward for racing; betting exchanges are an enormous threat to the industry and go to the very heart of the world-class integrity we have fought long, and hard to establish and we cannot sit by and let them erode our magnificent sport."

Betfair's local chief, Mark Davies, said the business is legal and complies with all Australian laws, including the use of intellectual property. He was unaware of any current investigation by the Australian federal police, but acknowledged that Australian police visited him at home after receiving a tip that he was running betting operation from there. Police left after questioning, accepting that there was no case to answer.

Activity in the United Kingdom

The ARB is also citing this week's major race fixing bust in the United Kingdom as a prime example of why exchanges must be stopped. The U.K. raids, which resulted in the arrests of 16 individuals (including a trainer and three jockeys), followed an investigation in which Betfair's records were the main source of evidence. Betfair said its cooperation with City of London Police was positive for racing, but racing officials in Australia argue that the betting exchange model is responsible for the outbreak of match fixing.

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