ARF Hears About Illegal Betting Threat

Illegal betting continues to grow at an alarming rate, posing an increasingly complex threat to horse racing, according to Andrew Harding, executive director of the Hong Kong Jockey Club, Racing and Asian Racing Federation (ARF).

Mr Harding, who chaired a session titled “The Defence” last week, said at the 39th Asian Racing Conference in Melbourne, Australia, that legal betting on races “is in quite a good state and is actually growing strongly in some jurisdictions”. .

Andrew Harding of the Hong Kong Jockey Club

“But we must recognize the scale of illegal wagering, which the United Nations Office on Drugs and Crime estimates totals $1.7 trillion illegally wagered on races and all sports annually,” Harding said.

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

“The growth of illegal gambling is outpacing the growth of legal markets. So why is it important to racing and society? The obvious problem is the threat to the integrity of the sport. Aside from the integrity issue, there is a funding risk as the illicit market gives nothing back to the industry.

“There is also a risk of economic pain for the wider economy – the loss of jobs that racing creates and the loss of other economic benefits that racing creates, such as taxes and tourism. Then there are the social problems.

“Illegal betting is a license to launder money and a cash cow for organized crime, and as far as problem gambling goes, illegal operators generally don’t care about responsible gaming at all.”

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

“The ARF Anti-Illegal Betting Council was formed to better understand this threat and to help others better understand the size and scope of the unregulated markets and the negative impact it is having on sport and society in general,” said Mr. Robinson , Vice Chairman of the ARF Anti-Illegal Betting Council.

Mr Robinson noted that many illegal betting markets are becoming increasingly complex and difficult to detect, with up to two out of three betting sites not being fully licensed or regulated.

“The council has evolved into a think tank of experts to address these and other issues, growing from 14 to 24 council members spread across four bodies,” Robinson said.

Mr Robinson urged delegates to examine the ARF’s bulletins against illegal betting and financial crime.

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

“CITIBet is very big, especially in Hong Kong races. At a Hong Kong Jockey Club meeting last month, which saw a legal turnover of $250 million, CITIBet was not far behind in terms of the size of its turnover. Year-on-year growth was up about nine per cent at Hong Kong races last year,” Mr Chignell said.

“But it’s not just active in Hong Kong. It’s in Australia, in all the major racing areas around the world. While governments and law enforcement have really tackled the illicit market in Australia and certainly had success, it has bounced back. In Australia, CITIBet revenue from Australian racing really fell in 2019 but has since doubled and poses a serious threat to the integrity of Australian horse racing.”

Earlier, in a session titled “The Shift,” Mr. Gary Liu, Founder and Chief Executive, as well as Co-Founder and Chief Executive of Terminal 3 at Artifact Labs, challenged horseracing executives to look for ways to engage with Gen Z- to get in touch with customers.

Explaining the machinations of blockchain, NFTs and Web 3 and how new technologies can open up new horizons for horse racing, Mr. Lui said, “I am increasingly excited about the opportunities for horse racing in this new world.”

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“We all have a lot of Gen Z working with us who actually understand what this new world looks like through their own eyes, and we really need to invest more time in understanding it.”

Mr Liu was joined by Cricket Australia (CA) Senior Commercial Strategy Manager Ms Joan Norton and Ms Lisa Fitzgerald, corporate partner at law firm Lander and Rogers, both of whom spoke about exciting opportunities available outside of traditional channels of communication.

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