Betfair Gains Access to Racing in Victoria

10 July 2006

Racing Victoria Limited (RVL), the governing body for thoroughbred racing in the Australian state of Victoria, has granted betting exchange Betfair permission to publish the racing fields of racing events in the state on its Web site, which effectively enables Betfair to begin matching wagers on racing in the state.

An amendment to Victoria's Racing and Gambling Acts in November 2005 required all wagering providers to first receive permission from RVL before publishing Victorian race fields, and integrity and product fee concerns were built into the amendment as chief considerations for approval. At the time, Tasmania's Legislative Council was in the process of approving legislation to permit betting exchanges to operate in their state, but Victorian racing officials stood out as the most vocal opponents of betting exchanges in Australia, and it, therefore, seemed that the race fields legislation may have been designed specifically to prevent Betfair and other exchanges from matching wagers on Victorian racing.

"We're delighted to have received RVL's approval to publish Victorian thoroughbred race fields," said Andrew Twaits, Betfair's director of corporate and business affairs. "The process we went through was certainly a rigorous one. It involved extensive due diligence of the systems, functions and procedures that make up our betting exchange model."

He added, "Betfair's integrity systems and audit trails are amongst the best in the world. The procedures we've put in place following consultation with RVL will help ensure that members of RVL's integrity services team have access to unprecedented amounts of information to help ensure the integrity of Victorian thoroughbred racing."

As it does in England, Betfair will allow Racing Victoria officials to access betting records in situations where race fixing is reasonably suspected. The company has also been known to alert racing and sports officials of suspicious betting patterns before the events in question begin. The company's betting records were instrumental in a massive City of London Police investigation into race fixing that culminated with charges being brought against 11 individuals earlier this week.

Said Racing Victoria's acting CEO Stephan Allanson, "They (Betfair Australia) have passed stringent criteria based on protection of integrity and economic contribution."

Although it has gained approval to publish Victorian race fields and, therefore, to match wagers on its betting exchange, Betfair is not required to pay a fee to RVL; however, RVL has accepted Betfair's proposal to contribute a product fee of A$1.1 million in back taxes for its coverage of Victorian racing from 2002 to 2005.

The general consensus is that the resignation of former RVL chief executive Robert Nason in April 2006 served as a turning point with regard to how Betfair was perceived by RVL. Nason has been one of the fiercest outspoken opponents of betting exchanges, but his leaving RVL for Tabcorp took him out of a decision-making position as far as the permitting of race fields publishing is concerned.

Although RVL seems to be satisfied that betting exchanges fulfill integrity requirements, there are still plenty of organizations and individuals in Australia who remain unconvinced. Betting and racing officials all over the country told reporters about their disappointment and disbelief that RVL had approved Betfair.

"Today's decision to allow a betting exchange to use Victorian race fields in an immensely disappointing outcome for racing, said Andrew Ramsden, Australian Racing Board chairman. "The integrity conditions that RVL has imposed have some merit, and RVL can be acknowledged for having achieved a significant change in position on the part of the betting exchange operator. Ultimately, however, I believe that these measures can at best be ameliorating influences. The basic problem remains that betting exchanges encourage people to make money out of horses losing races, and that, of itself, is fundamentally incompatible with racing's integrity."

A spokesperson for Tabcorp had similar statements. "Tabcorp believes there are serious integrity issues linked to the operation of betting exchanges," he said. "Betting exchanges are a serious threat to the proper conduct or racing and the integrity of betting because they allow punters to back a horse to lose. The Australian spirit is to celebrate backing a winner. There is no thrill in betting on a horse to lose."

Western Australia is now the state offering the most resistance to betting exchanges in Australia. On June 21 Western Australia's Minister of Racing and Gaming, Mark McGowan, introduced to the state's parliament a bill that if passed would prohibit the operation of betting exchanges in Western Australia. The legislation would also prohibit the publication of Western Australian race fields without appropriate approval and would make it a punishable offense for anyone in the state to place a bet through a betting exchange.

Betfair began publishing Victorian race fields on Saturday.

Bradley Vallerius

Articles by Bradley P. Vallerius, JD manages For the Bettor Good, a comprehensive resource for information related to Internet gaming policy in the U.S. federal and state governments. For the Bettor Good provides official government documents, jurisdiction updates, policy analysis, and many other helpful research materials. Bradley has been researching and writing about the business and law of internet gaming since 2003. His work has covered all aspects of the industry, including technology, finance, advertising, taxation, poker, betting exchanges, and laws and regulations around the world.

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