Australia's Betting Exchange Task Force Speaks

10 July 2003

Considering the prohibitive stance toward online gambling taken in Australia, officials with Betfair aren't surprised with the final version of a the report of the Betting Exchange Task Force commission.

The report, released today, strongly recommends the banning of betting exchanges in Australia.

The commission, assembled in February during the Australasian Racing Ministers' Conference, was made up of state and territory racing ministers from all eight Australian States and Territories.

The task force found that there is no "cost-effective or proven control mechanism to deal comprehensively with the racing integrity concerns that have been identified" when a betting exchange is used.

Over the course of four months, the task force heard from government officials, the racing industry and from P2P site, which has a market share of more than 90 percent of the betting exchange industry.

Betfair and a host of bookmakers have applied for a betting exchange license in Australia, but the commission recommended that no such license be granted and that the Interactive Gaming Act of 2201 be amended to include a ban on exchange betting.

It also recommended that legislative measures be taken up sooner rather than later.

Denis Harvey, the chairman of the task force, warned, "The development of a strong presence in the Australian wagering environment by betting exchanges will exacerbate difficulties associated with the implementation of any subsequent decisions to curtail their operations in Australia."

The concerns raised by regulators are not new to Betfair; the same concerns, related to the integrity of racing, have been raised in the United Kingdom since P2P betting began getting popular in the late '90s.

Betfair has received the OK from U.K. regulators, thanks in part to measures taken to preserve the integrity of racing. Nevertheless, there are still problems.

This week a blacksmith who shoes horses at an English racetrack came under investigation for his betting habits through the exchanges.

According to reports Steve O’Sullivan, 32, is believed to have made a rare error and lost between £100,000 and £120,000 when he laid another Berry-trained two-year-old, Nearly Before Time, at Wolverhampton the week before Hillside Girl was pulled up lame by apprentice Paul Bradley approaching halfway in a five-furlong event at Carlisle on June 15.

Last month Betfair announced it had signed a Memorandum of Understanding with the U.K. Jockey Club by which the group would turn over information about users if a situation warranted it.

Despite the recent scandal and concerns over the possibility of similar situation in Australia, Betfair wants to proceed with a betting exchange license granted by the Australian government.

"Betfair is committed to the development of a business in Australia, to work within a regulated framework, to pay appropriate federal and state taxes and to direct substantial funds to Australian horse racing for the development and the enhancement of the industry," Davies explained said.

Others in the industry were supportive of the findings form the task force.

Traditional gaming and wagering companies have strongly opposed betting exchanges, saying they pose a threat to the integrity and viability of the racing industry.

While the task force reached numerous agreements in its report, it didn't have the support of the Northern Territory.

The NT relies heavily on the sports betting industry, and its representative on the task force, Malcom Richardson, said the NT government couldn't support any of the recommendations in the report.

NT Minister for Racing Syd Stirling agrees and feels prohibition is the wrong approach.

"The fact is that some very big overseas betting organizations, such as Betfair, are now beginning to target Australian racing, and we cannot expect them to simply go away; nor can we expect legislation, federal or state, to be able to effectively stop their activities in Australia," he said.

Click here to read the full copy of the task force report.

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