Betfair, ABA Voice Opposing Views to DCITA

9 May 2003 and officials with the Australian Bookmakers Association haven't exactly seen eye to eye on betting exchanges.

Naturally, the views expressed in their submissions to Australia's Department of Communications, Information Technology and the Arts (contributions for the mandatory review of the Internet Gambling Act) are on opposite sides of the spectrum.

The ABA's maintains that the IGA is "effective" legislation, but acknowledges that the act could be improved "to increase the efficacy of its operation."

Betfair, meanwhile, would like to see, at a minimum, the IGA left alone and recommended that an exemption permitting "in-the-run" betting should be added.

In-game betting, one of the most popular features offered by Betfair, is ideal for sports like cricket, which is huge in Australia.

It is this feature that has caused great discord in Australia between Betfair and betting industry leaders.

Betfair officials spent time in March in Australia meeting with various betting industry groups and regulators. Much of the time was spent spreading the message that Betfair is hoping for a day in Australia when it could be a licensed operator.

While in-game betting was the primary focus of Betfair's submission, the ABA weighed in on a host of other subjects.

Officials with MasterCard International submitted a report to the DCITA suggesting that it would be costly and ineffective to rely on coding practices to distinguish between legal and illegal gambling transactions.

The Australian Bookmakers Association isn't on the same page.

"We disagree and say that it is both feasible and appropriate," said Tim Ryan, who was appointed CEO of the Australian Bookmakers' Association on May 1. "Further, we believe that the bankers' submission is misleading and fails to contribute fairly and reasonably to the debate."

Ryan said he did feel that the MasterCard submission on the whole was both balanced and fair in "explaining the issues and its preparedness to assist the implementation and operation that assists the government to achieve its policy objectives."

The card schemes already have transaction coding methodologies and rules that can be used simply and effectively to block transfers to interactive gambling service providers, Ryan said.

"The bookmakers' submission clearly supports a non-onerous regime where the card scheme coding systems can be used effectively to block offshore online gambling transactions," he said.

A bone of contention for both the banks and the credit card companies is separating what is a legal online gambling transaction from what is illegal. The IGA calls for numerous carve-outs for various types of betting.

Ryan feels that is a legitimate complaint and said the key to utilizing the existing systems in a way that is not onerous on either the banks or the card scheme operators themselves is to remove any grayness in the application of processing rules.

"There is no ability to segregate different forms of gambling, even if there was it would be pointless," he said.

To achieve this, the bookmakers association suggests a plan that would reject all requests to transfer funds associated with illegal online gambling. The only way to do this, the group feels, is for any exemptions to apply only to Australia-licensed gaming providers, in which case the card-processing rule exempts transactions where the merchant acquirer is an Australia bank. Ryan said it is card-scheme policy that merchant transactions must clear through a local bank and no third-party transactions are permitted.

MasterCard indicated in its report that trying to "regionalize" its processing and coding system, which is currently set-up for a global system, could be costly and inefficient if certain jurisdictions allow for transactions and others don't.

Betfair and the Bookmakers Association do agree on one thing: For the IGA to be most effective, it must require gaming licenses for any offshore operator doing business in Australia.


Australian Bookmakers Association


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