Betfair Seeks Deal with Cricket Australia

28 July 2004

Wasting no time in laying the groundwork for doing business in Australia, Betfair is looking at the country's leading sports leagues as potential partners.

Australia's federal government on July 12 published the results of its yearlong review of the Interactive Gambling Act--ultimately opening the door for regulated betting exchanges--and Betfair, the market leader, has already made some key moves in preparing to enter the Australian market.

The company spent the last two years lobbying the government to keep the Interactive Gambling Act intact, thereby leaving policy regarding exchanges in the hands of the states. With that accomplished, their focus has turned to seeking potential business partners.

Last week Betfair announced a joint venture with Kerry Packer's Publishing and Broadcasting Limited in which the two parties will launch a betting exchange if and when Betfair obtains an Australian license.

This week Cricket Australia, the National Rugby League, the Australian Football League and Australian Rugby Union are being mentioned as potential Betfair partners.

Cricket Australia said it is considering whether it should accept money from Betfair in exchange for allowing the betting operation to match bets on the league's contests. The league confirmed today that officials met with Betfair to discuss a possible deal and that its board is considering a proposal in which Betfair would pay the body a six-figure fee every year in exchange for betting rights.

Betfair acknowledged that discussions have taken place, but the particulars are under wraps. It is believed that similar offers have been made to interests representing rugby and Aussie Rules football.

Cricket Australia officials said any deal with Betfair would be treated as an endorsement agreement, similar to its contracts with broadcast and merchandising partners. The league would in no way become a bookmaker or betting operator.

But anyone following the sport in Australia would think twice about any deal pitting Cricket Australia with an official bookmaker, much less a betting exchange. CA has been rocked by match fixing scandals that have damaged the sport's image in Australia over the last decade.

Additionally, opponents of betting exchanges argue that services like Betfair are bad for sport because it is easy for insiders--jockeys, players, managers, trainers, ect.--to bet against a team or horse and ensure that it comes out on the losing end.

A CA spokesperson told the Australian Broadcasting Association that the scandals of the last 10 years are weighing heavy on the board as it considers Betfair's offer.

"We have welcomed the approach but we are still thinking where we stand on the issue," CA public affairs spokesman Peter Young said. "We have a long standing view that anyone who is taking commercial benefit from the use of our intellectual property should pay us some form of compensation. But there is no way Cricket Australia would be involved in an arrangement unless we had bullet-proof satisfaction that corruption was not going to be a problem. "

Young also said that many of the cases over the last 10 years involved illegal bookmakers based offshore, where it's hard for Australian law enforcement to control such activity.

"The only corruption in cricket has related specifically to illegal bookmakers in the sub-continent," he said. "We are comfortable so far with what we know of Betfair's operations."

Former test captain Greg Chappell said he's shocked that the league is even considering the agreement.

"I find it ironic, and I'm surprised that they are considering it because it sends the wrong message," Chappell said yesterday.

The Australian Cricketers' Association, meanwhile, said it will get all the details on the agreement before it weighs in on it.

The Betfair/CA deal probably won't be opposed by the International Cricket Council, which has signed a memorandum of understanding with Betfair through which the council will be given access to Betfair's betting records if there are match fixing claims or suspicious betting activity. CA and Betfair have signed a similar agreement.

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