Australian Racing Threatens to Ban British Horses

21 October 2004

The Australian racing industry's next move in its ongoing battle against betting exchanges could be to ban English-owned horses from racing events.

Officials with Racing Victoria posed the idea this week as fans, trainers, jockeys and bookies geared up for the annual Melbourne Spring Festival. A proposed ban wouldn't be in place for this year's event, but Robert Nason, Racing Victoria's chief executive, said he would ban all foreign horses from racing if Betfair isn't outlawed in Australia.

Nason knows that the ban is a drastic measure, but he's willing to follow through with his intentions even if it leads to the cancellation of entire races.

"Just be clear on this," Nason told the Daily Telelgraph Wednesday. "If it meant getting rid of Betfair, I would shut down the (Melbourne) spring carnival."

Nason said Betfair is a "threat" to racing and that unless others in the industry realize the severity of the situation, his group was prepared to take the lead.

"It's that big an issue to Australian racing," he said. "If that's what it took, we would do it. We would take whatever action is necessary to eliminate this threat to our racing. Whatever action is necessary. We are not going to give up. We are not going to go away."

Betfair was riding high in Australia after the federal government opted not to amend the Internet Gambling Act to address betting exchanges. Instead of banning them, the government has left the decision in the hands of the individual states and territories.

Betfair accepts wagers from Australian punters through its U.K.-based hub, and is not allowed to advertise its service throughout Australia.

Even without advertising its services, Betfair took in more than $1.5 million in matched bets on Saturday's Caulfield Cup meeting.

The company has said it would like to open up a technology base in Australia and actively pursue the Australian market. It has even said it would back-pay a portion of its revenues to the racing industry from the time it started accepting wagers from Australian punters.

That isn't good enough though for Nason and others in racing who argue that the exchange model is conducive to corruption because it enables people to bet on horses to lose.

Betfair appeared to be making progress last month in its efforts to gain a license in Australia when it announced a partnership with Publishing Broadcasting Limited that could produce a PBL-branded betting exchange created and operated by Betfair. The two companies would get a 50/50 split on the profits from the operation, but won't be launching such a site unless Betfair is granted an Australian betting license. Some observers said that with PBL and Kerry Packer in its corner, Betfair could finally be able to get its long-awaited license.

Nason isn't impressed with the PBL/Betfair partnership.

"Betfair can wheel in Kerry Packer," he said. "They can wheel in the Queen if they want to, but we will not be backing away from this stand."

For its part, Betfair has remained above the recent fray. Mark Davies, the company's managing director in Australia, feels that banning foreign-owned horses as an end-around to Betfair is a leap.

Davies doesn't see why owners should be dragged into the middle of a dispute between Betfair and racing regulators.

"English racehorse owners have one thing in common with us (other than a love of racing) and that's that they're English," he said.

Australian Racing Board Chairman Andrew Ramsden said that a ban is a "strong possibility" by next year if Betfair isn't outlawed.

ARB chief executive Andrew Harding said the measure would be aimed at getting international cooperation in Australia's battle against Betfair.

"We're not in the business of punishing owners and trainers, so it would be a last resort," Harding said. "But when it comes down to it, you can't just pretend we're good friends. You have to show we are. If they're not sufficiently interested to help us, why should we help them?"

Betfair said that it is providing a service with a far lower commission than TABs and that it is prepared to provide authorities with a betting audit trail enabling them to identify corrupt activity.

The ARB released figures this week saying that if 20 percent of current wagering with Australian TABs and bookmakers was lost to betting exchanges, racing would lose $100 million.

The industry received 32.6 percent of the $587 million bet on the Victorian TAB in 2003-04.

Davies said the only legitimate argument against Betfair is a commercial one, and it holds little water.

"Betfair is a wagering operator which operates absolutely in line with the law, both in the United Kingdom and in Australia," Davies said. "Owners of English race horses are not part of the battle that we're having on a commercial basis with some sectors of the Australian industries."