31/10/03
In a majority decision today, Australasia's Racing Ministers have called on the Federal Government to ban offshore betting exchange operators from access to Australian punters.
At the Australasian Racing Minister conference in Sydney today, Ministers voted five to two to ask the Commonwealth to legislate for the prohibition of the exchanges as part of a current review of the Interactive Gambling Act 2001.
The dissenters were the Northern Territory and Tasmania. New Zealand chose to abstain from voting on an Australian issue.
Western Australian Racing Minister Nick Griffiths said the conference regarded the offshore operators as a substantial threat to the future viability of the Australian racing industry.
"There is an urgent need to ban them because they are already siphoning off huge sums of money from the industry without paying a cent in tax," Mr Griffiths said.
"The conference today adopted the recommendations of a task force comprising representatives of each of the eight State and Territory Governments."
The task force's majority recommendations (the sole dissent coming from the Northern Territory membership) were:
- that no licence be granted in Australia for the conduct of a betting exchange (in any form) on racing or sporting events; and that -
- in the event that the Government and/or racing industry of a State or Territory decides to issue a licence for the conduct of a betting exchange on racing or sport, the operator is to be strictly limited to:
- operating on Australian racing or sporting events in that jurisdiction only, with coverage of events in any other State or Territory limited to instances where formal consent and agreement is obtained from both the government of the other jurisdiction and the racing or sporting body conducting the race or event;
- opening accounts for and accepting bets from only residents of or persons physically present in that State or Territory or residents of or persons physically present in other Australian States and Territories only in circumstances where formal consent and agreement is obtained from the government and the racing industry of the other jurisdictions; or -
- overseas persons, provided that it is lawful in the country concerned and appropriate controls are in place to prevent the acceptance of bets from persons overseas under circumstances where arrangements have been entered into with persons in Australia for the primary purpose of circumventing the spirit of this agreement.
In a majority decision, the conference also agreed to prohibit licensed Australian wagering operators dealing with betting exchanges, not properly authorised in Australia, for the placing of bets or laying off of bets on Australian racing.
The Ministers also resolved to prohibit the operators from referring or transferring customers or business to overseas betting exchanges, regardless of whether or not those exchanges are licensed in the overseas country.
Mr Griffiths said the conference clearly saw no place for betting exchanges in Australian racing.
"Betting exchanges provide an effective and efficient opportunity for individuals to profit from directly backing a horse to lose and that would bring the Australian racing product into disrepute," he said.
"These operators contribute nothing towards the infrastructure of racing and their business would have a negative impact on revenue streams for the industry and the Government.
"Betting exchange turnovers consist of transfers from existing wagering operators, TAB agencies and the bookmaking profession, which are among the best-managed and most effectively regulated in the world.
"Their revenue contributions has resulted in a world-class racing industry which provides employment and recreation for a large cross-section of the Australian community and the industry must be protected."
The conference voiced its concerns, in particular, at the operations of the UK-based betting exchange, Betfair, which has been targeting Australian punters by betting on major Australian race meetings and sporting events.
Betfair does not hold a gambling licence within Australia, does not pay any local betting taxes on Australian-sourced bets, nor any product fees or contributions to the Australian racing industry.
Betfair's Australian operations are largely exempt from the Interactive Gambling Act 2001 because it is deemed to be an excluded wagering service under section 8A of the Act.
Internationally, regulators in jurisdictions such as Hong Kong, Japan, a number of European countries and the USA, are taking steps to seek to prevent interactive gambling being offered to their residents by operators not licensed in their jurisdiction.
The conference today reached an in-principle agreement on a national blanket prohibition on bookmakers in all three codes basing payouts on the dividends of a totalisator.
It resolved to implement the ban by placing additional conditions on bookmakers' licences and making amendments to the racing rules and relevant legislation covering bookmakers.
The conference also unanimously endorsed the principle of a product fee being imposed on all bookmaker race betting throughout Australia.
The conference will ask the Australian racing industry to negotiate with licensed Australian bookmakers on the framework for the fee.
A response from the racing industry is expected before the next meeting of Racing Ministers scheduled for March 12 next year.
Minister's office 9222 8950
