The volume and growth of illegal betting and the increasingly complex threat it poses to the integrity of racing and other sports – along with its potentially dire economic impact – were among key issues raised at session nine at the 39th Asian Racing Conference in Melbourne on 17 February.
The session was chaired by Mr. Andrew Harding, Secretary General, Asian Racing Federation (ARF) and Executive Director, Racing, The Hong Kong Jockey Club.
“Wagering on racing by legal means is in reasonably good shape and indeed in some jurisdictions is growing strongly,” Mr. Harding said. “But we have to appreciate the scale of illegal betting which the United Nations Office on Drugs and Crime estimates to be as much as US$1.7 trillion illegally bet annually on racing and all sports. We are a sardine in a swimming pool full of sharks who are growing and multiplying.
“The growth in illegal betting 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. Michael Phelan, former Chief Executive Officer, Australian Criminal Intelligence Commission (ACIC), outlined the volume of organised crime in Australia and spoke of the links between illegal betting and organised crime and money laundering.
“The proceeds of organised crime are estimated to be up to $62 billion a year in Australia with an estimated 25 per cent laundered by professional facilitators and betting is major source of that money laundering,” he said.
Mr. Phelan said the creation of the Australian Sports Intelligence Unit, housed at the ACIC, had broad reaching powers which enabled it to make significant progress in the fight against money laundering and threats to integrity.
“Australian sports integrity remains intact, for the moment. By and large our systems are working but the threats are likely to increase in the future,” he said.
Mr. Doug Robinson, Deputy Chairperson, ARF Council on Anti-Illegal Betting and Related Financial Crime (ARF Council) and Executive Manager, Due Diligence and Research, The Hong Kong Jockey Club, said the threat of illegal betting and associated financial crime risk is one of the most significant challenges we face today.
“The ARF Council was established to better understand that threat and to help others better understand the size and scale of the unregulated markets as well as the negative impact on sports and wider society,” said Mr. Robinson.
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 and Regulated. “The Council has evolved as a think tank of experts to tackle these and other issues and has expanded from to 21 - and soon to be 24 - council members spread across four continents,” Mr. Robinson said, adding that this increase in Council members was needed to tackle increasingly- intricate and technologically-savvy illegal betting operators.
Mr. Robinson urged delegates to examine the ARF Council’s Quarterly Bulletin. “A compendium of them has been published and they are also available online,” he said. Details below.
Mr. Tom Chignell, ARF Council member and Executive Manager, Racing Integrity and Betting Analysis, The Hong Kong Jockey Club, 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 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.
“But it’s not just active in Hong Kong. It’s in Australia, and other 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,” Mr. Chignell said.
ARF Council members, Ms. Catherine Ordway, Associate Professor (Sports Management), University of Canberra, and Ms. Sally Gainsbury, Director, Gambling Treatment and Research Clinic, University of Sydney, also joined the panel discussion which closed the session.
"Cheating, of course, is not new to sport," said Ms. Ordway, "but betting has absolutely ramped it up. Sports groups can learn much from horse racing which has been combating illegal activity for decades."
Ms. Gainsbury noted that any research into users of illegal betting sites was a "delicate subject" and complex. "Most people prefer to bet with domestic operators but it doesn't matter to them where it's licensed if it appears to be legitimate and many people have multiple accounts," she said.
"We need a balance between commercial needs and the need to be a sustainable and safe industry, particularly if we're trying to show that we're better than the offshore, unregulated and illegal markets."
* The ARF Journal is accessible on the website.
ARF Council research papers and videos can be found at https://www.asianracing.org/aib/resources.
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