PGA Deal Advances Betfair's Integrity Campaign

20 November 2006

Betfair and the PGA Tour of Australasia on Wednesday announced an agreement granting the PGA Tour a share of the revenue Betfair generates from wagering activity on PGA events and access to tools to help maintain the integrity of the sport.

The arrangement follows a bold move by a coalition of major sports organizations in Australia that asked for a cut of the revenues generated by their respective sports.

The Coalition of Major Professional Sports (COMPS) consists of seven organizations: Cricket Australia, the Australian Rugby Union, the National Rugby League, Football Federation Australia, Tennis Australia and the PGA Tour of Australasia. In November 2003, the organizations assembled to discuss sports betting in Australia. Over the following 18 months, the groups formed an alliance and set out to lobby the government for better regulation of sports betting.

COMPS wants to ensure that all sports receive a fair share of the revenue wagered on its members' respective events and to implement a more effective regulatory regime for sports betting in Australia.

Betfair was one of a few companies that backed COMPS's position.

"Betfair has long held the view that Australian sporting organizations are entitled to a fair share of the revenue we derive from betting on their events, and we're delighted to be contributing directly to the ongoing prosperity of golf in Australia and New Zealand," said Andrew Twaits, Betfair's director of corporate and business affairs in Australia.

The Australian Competition and Consumer Commission issued a draft ruling in September 2006 denying COMPS the opportunity to collectively bargain with Australian wagering operators.

"What that means, simply, is that the sports need to individually negotiate with the wagering operators for product fees and access to betting records," Twaits explained.

And that is what Betfair and the PGA set out to do.

The revenue-share agreement between Betfair and the PGA is confidential, but it is based on a percentage of the gross revenue Betfair earns from covering events in Australia and New Zealand, Twaits said.

Otherwise, Betfair will provide the Tour with access to all betting records in relation to betting that occurs on their events.

"The integrity aspect of the agreement was very important to them (the PGA)," Twaits said. "Importantly, this agreement also gives the regulators of professional golf in Australia complete access to our audit trail of betting transactions, including customer details, should they ever need to investigate betting transactions on a tournament played under their auspices."

Betfair prides itself on standing up for integrity. The company has information-sharing agreements in place with sports authorities throughout the world. Betfair has current memorandums of understanding (MOU) with most major sporting regulators, including the U.K. Jockey Club, the International Cricket Council, the South African and U.S. horseracing authorities, the English Football Association, UEFA and the AFL, giving the associations access to the company's audit trail. Betfair is also in discussions with other COMPS members.

"All of the major professional sports in Australia are seeking a share of revenue from betting on their events and access to betting records to help them manage integrity issues." Twaits said. "Betfair is the only wagering operator in Australia (if not anywhere in the world) to have publicly supported the sports' efforts in that regard. We have been in discussions with all the sports in Australia about giving them a share of our revenue and access to betting records (the two issues are not tied together – at least as far as we're concerned) for well over a year. We're confident that we'll reach product fee/integrity agreements with other Australian sports in the near future."

Golf is one of the more lucrative professional sports (Tiger Woods, for instance made US$90 million in 2005) and runs on a year-round schedule of weekly tournaments played all around the world.

"Golf's popularity as a betting product is increasing rapidly, particularly in Australia as a result of the success of the Australians on the U.S. and European tours," Twaits said. "We look forward to building a strong relationship with the PGA Tour of Australasia and helping to drive interest in Australasian golf throughout the world."

Ben Sellenger, the CEO of the PGA Tour of Australasia added, "We're delighted to have entered into this arrangement with Betfair, which reflects the principles that the major professional sports in Australia are seeking to establish for all wagering operators who transact on Australian sporting events."

The PGA Tour of Australasia was established in 1973 as the PGA Tour of Australia. It adopted its current name in 1991 and is affiliated with the International Federation of PGA Tours. Golf's five leading professional Tours -- the European Tour, Japan Golf Tour, PGA Tour, the PGA Tour of Australasia and Southern Africa Tour -- reached agreement in 1996 on several key elements of professional golf, designed to create a series of new international events that began in 1999.

Emily Swoboda is the senior staff writer at IGamingNews. She lives in St. Louis, Mo.