ARF Hears About Illegal Betting Threat

One of the most significant challenges facing racing

Illegal betting continues to grow at an alarming rate and poses an increasingly complex threat to horseracing, according to Hong Kong Jockey Club Executive Director, Racing and Asian Racing Federation (ARF) Secretary General Mr. Andrew Harding.

Chairing a session titled ‘The Defence’ last week, Mr. Harding told the 39th Asian Racing Conference in Melbourne, Australia that legal wagering on racing “is in reasonably good shape and indeed in some jurisdictions is growing strongly.”

The Hong Kong Jockey Club’s Andrew Harding

“But we have to appreciate the scale of illegal betting which the United Nations office on Drugs and Crime estimates to be a total of $US1.7 trillion illegally bet annually on racing and all sports,” Mr. Harding said.

“We are a sardine in a swimming pool full of sharks who are growing and multiplying.

“The growth in illegal gambling is outstripping the growth in legal markets. So why does it matter to racing and society? The obvious issue is the threat to the integrity of the sport. Apart from the integrity issue, there is a risk to funding as the illegal market returns nothing to the industry.

“There is also the risk of economic pain to the broader economy – the loss of jobs that racing generates and the loss of other economic benefits which racing creates such as taxation and tourism. Then there are the social problems.

“Illegal betting is a licence for money laundering and it’s a cash cow for organised crime, and so far as problem gambling is concerned, axiomatically the illegal operators care not at all about responsible gambling.”

Mr. Doug Robinson, Hong Kong Jockey Club Executive Manager, Due Diligence and Research said the threat of illegal betting and associated financial crime risk is one of the most significant challenges facing racing.

“The ARF Anti-Illegal Betting Council was established to better understand that threat and to help others better understand the size and scale of the unregulated markets as well the negative impact on sports and wider society,” said Mr Robinson, who is deputy Chairman of the ARF Anti-Illegal Betting Council.

Mr. Robinson noted that many illegal betting markets were increasingly complex and difficult to detect with as many as two out of three betting websites not fully licensed or regulated.

“The Council has evolved as a think tank of experts to tackle these and other issues and has expanded from 14 to 24 council members spread across four contents,” Mr. Robinson said.

Mr. Robinson urged delegates to examine the ARF’s Anti-Illegal Betting and Financial Crime bulletins.

Mr. Tom Chignell, Hong Kong Jockey Club Executive Manager, Racing Integrity and Betting Analysis, outlined the size of illegal betting with reference to the CITIBet exchange.

“CITIBet is very big, especially on Hong Kong racing. At a Hong Kong Jockey Club meeting last month which had a legal turnover of US$250 million, CITIBet was not far behind that in terms of the scale of their turnover. Year on year growth, it was up about nine per cent, last year, on Hong Kong racing,” Mr. Chignell said.

“But it’s not just active in Hong Kong. It’s in Australia, all the major racing jurisdictions across the world. While government and law enforcement agencies really did take on the illegal market in Australia and certainly had success, it has rebounded.  In Australia in 2019, CITIBet turnover on Australian racing really dipped but since then it’s doubled and it provides a serious integrity threat to Australian horse racing.”

Earlier, in a session titled ‘The Shift,’ Artifact Labs Founder and Chief executive and Co-Founder and Chief Executive of Terminal 3, Mr. Gary Liu urged horseracing’s leaders to explore ways to connect with Gen Z customers.

Explaining the machinations of blockchain, NFTs and Web 3 and how new technology can open fresh horizons for horseracing, Mr Lui said: “I am increasingly excited about the opportunities for horseracing in this new world.”

“We all have plenty of Gen Z that work with us that actually understand what this new world looks like through their own eyes and we really need to invest more time in understanding.”

Mr. Liu was joined on a panel by Cricket Australia (CA) Senior Commercial Strategy Manager, Ms. Joan Norton and Ms. Lisa Fitzgerald, corporate partner in legal firm Lander and Rogers, who both spoke of exciting opportunities available outside of traditional communication streams.

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