The growing threat of illegal betting and the pressing need for stakeholders to build successful relationships with governments came under scrutiny in a plenary session entitled 'For Racing's Integrity, and Engaging Government Agencies: The Anti-Illegal Betting Taskforce' at the 38th Asian Racing Conference (ARC) in Cape Town, South Africa on Thursday.
The session was led by Mr. Douglas Robinson, Senior Due Diligence and Research Manager for the Hong Kong Jockey Club (HKJC) and Deputy Chairman of the Asian Racing Federation (ARF) Anti-Illegal Betting Taskforce, who stated from the outset that racing “faces a war against a rampant illegal betting market.”
An international taskforce now comprising 14 members was set up in 2016 to help the ARF mitigate illegal betting and Mr. Robinson cited evidence from Hong Kong, Australia, New Zealand, South Africa, South Korea and Singapore to show that “illegal markets across the six territories are large - often larger than regulated markets - and expanding faster than regulated markets.”
He continued: “Illegal markets are also associated with criminality such as loan sharking and money laundering and they also have a comparatively larger negative social impact on customers than regulated operators.”
Mr. Robinson recalled “a depressing scenario” outlined at the 2018 ARC whereby illegal activity leads to reduced punter confidence and “a vicious downward spiral for the sport itself” before stressing the need to engage with multiple stakeholders - notably governments - to tackle the issue.
“The scale of illegal betting is now so huge, and its operations spread across so many different countries, that horse racing and sports organisations alone cannot effectively combat the threat,” he said. “Instead, sports must now engage with multiple stakeholders and at the top of this pile are governments, primarily because they control and direct policy.”
Mr. Robinson conceded that persuading governments to support measures to tackle illegal betting is difficult and argued that it is therefore “essential to show how and why illegal betting has a larger negative impact than legalised betting and that it causes widespread social issues.”
He identified loss of tax revenue, money laundering and infiltration of crime groups as policy areas of particular interest to governments around the world and cited the Hong Kong government's betting policy as an example of positive action for recognising that “unregulated gambling activities can lead to a number of social problems - fraud, underage gambling & loan sharking - and become a potential source of income for organised crime and criminal activities.”
The Anti-Illegal Betting Taskforce will publish a handbook of good practices for combatting illegal betting later this year with market analysis, intelligence gathering, law enforcement collaboration, external stakeholder engagement and future threats of illegal betting set to be examined.
Mr. Robinson concluded by reiterating the importance of “understanding how government priorities mesh with those of racing to build a successful and ongoing relationship.”
Meanwhile, fellow Taskforce member Mr. Tom Chignell, the Hong Kong Jockey Club’s Executive Manager, Racing Integrity & Betting Analysis, addressed the growing threat to racing's integrity posed by illegal Asian betting operators such as Citibet.
He said: “Citibet and other illegal horse racing operators are a significant threat to horse racing integrity. The greatest betting threat to racing is jockeys or trainers stopping horses from winning, and betting on those horses to lose. Citibet has no obligation to report suspicious betting or breaches of the rules. They also have insufficient Know Your Customer processes and this is not helped by the agent network structure which means customers are not betting directly with the betting operators.”
Mr. Chignell also warned of the emerging threat posed by illegal crypto-currency betting operators who use racing as their primary product and identified bet monitoring (of legal and illegal markets), whistleblower channels and the ability to investigate and disrupt integrity threats as key ways in which ARF racing authorities can mitigate against integrity threats.
“As betting becomes more global, regulators are not keeping up with changes in betting markets,” he added. “With cryptocurrencies and virtual banking becoming increasingly popular, greater collaboration is key to upholding integrity. Sports can do a certain amount themselves to mitigate the threat from illegal betting, but the role of government is essential.”
Also addressing delegates on the subject of illegal betting in the ARC’s fifth plenary session were Mr. Brant Dunshea, Chief Regulatory Officer of the British Horseracing Authority, and Mr. Tim Robinson, General Manager Intelligence and Integrity Services at Racing Victoria.