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Work of Asian Racing Federation Anti-Illegal Betting Taskforce

Mr Martin Purbrick, Director, Security & Integrity at The Hong Kong Jockey Club, provided an overview of the enormity of illegal betting and its threat to the integrity and financial health of the racing industry at the 37th Asian Racing Conference Seoul 2018.

Mr Purbrick, in his HKJC role since 2009 overseeing a department of 220 people conducting investigations into organised crime and corruption threatening the Jockey Club, chaired the session on Anti-Illegal Betting and Money Laundering, and pulled no punches when he warned that illegal betting was growing twice as fast as legal betting and that left unchecked illegal betting could “kill” the sport of racing. 

“Understanding that risk prompted the formation of the Asian Racing Federation’s Anti-illegal Betting Taskforce after the last Asian Racing Conference and we are making progress. The involvement of law enforcement agencies is critical and we have established close ties with key bodies in Australia, Hong Kong and China,” Mr Purbrick said. 

A measure of that progress will be documented in the coming months as part of a three-tiered focus in 2018. 

“To produce a tangible strategy going forward we will do three things; firstly, in the next few weeks the Taskforce will publish a substantive white paper with the full results of our research into illegal betting; secondly, we aim to expand the Taskforce to include representatives from law enforcement agencies, academics, and representatives from the northern hemisphere to widen the impact of action against illegal betting; thirdly, we will convene the expanded Taskforce in the second half of 2018, to formulate and deliver a long-term strategy for racing,” he said.

Mr Douglas Robinson, the HKJC’s Senior Manager, Due Diligence and Research, Security and Integrity, provided the current update on the taskforce.  He outlined a summary of the current state-of-play of illegal betting markets in Asia, how they threaten the integrity of racing and sports and how they are the prime cause of a number of associated social issues.

“Our main findings can be broadly synthesized into the following,” he said, “The illegal betting markets are increasingly large and growing rapidly; illegal betting corrupts sports and facilitates money laundering; illegal betting fosters gambling disorder, which can cause a large number of associated social issues. Together, these three all represent a large cost to society.

“Illegal betting is increasingly large and growing rapidly in Asia. It threatens the integrity of sports and facilitates money laundering. It causes gambling disorders and other associated social issues. It generates volume which eclipses legal operators. Solving the problem requires the cooperation of multiple jurisdictions, stakeholders and governments and greater cooperation with law enforcement agencies,” he said. 

Mr Robinson said an estimated $140 billion is laundered via illegal betting markets each year.

Associate Professor Ms Stacey Steele, Associate Director of the Asian Law Centre, Associate General Counsel, University of Melbourne, updated the conference on recent developments on anti-money laundering in Australia, Japan, Korea and beyond. 

“There is a simple reason behind the current phenomenon of greater money laundering regulation. That is because of the increase in sports wagering on-line. The potential returns from wagering are now greater and it’s cheap to launder money through wagering,” she said. 

Professor Steele warned that anti-money laundering regulation was an issue in all sports including the racing industry - aside from the obvious reasons including links to criminality - because incurred scrutiny could lead to increased compliance costs, possible penalties and litigation.

Recent law enforcement actions in Australia demonstrated the interaction between financial services and gaming regulation, she said; while the emerging challenge of dealing with increased betting on eSports was examined. 
Professor Changhun Lee - Police Administration, Vice Provost of Foreign Affairs, Hannam University; detailed the magnitude of illegal betting in the horse racing industry in South Korea and outlined counter-measures for the illegal horse racing betting activities.

He also questioned the accuracy of current estimates of illegal betting around the world. “We need to spend the time and money to more accurately estimate the size of illegal betting turnover,” he said. 

Professor Lee then presented a summary of his academic endeavours and statistical approach in his bid to produce an accurate estimate of the illegal betting on South Korean racing when he puts it at $US11.1 billion  - much higher than previous estimates. 

He examined the cost-benefit analysis of controlling illegal gambling activities and the likelihood of betting migration from off-line betting to on-line betting when the on-line betting system is legalized and implemented in Korea. 

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