Betting Exchanges Debated at US Symposium

Betting exchanges have stirred debate for the second year in a row at the RTIP Symposium on Racing in Tuscon, Arizona.

Racing industry officials opposed to betting exchanges had sharp criticism for the industry's leading site, Betfair.com, during Wednesday's sessions. An official with Betfair warned that the U.S. racing industry could miss out on a large portion of revenue if it turns a cold shoulder to betting exchanges.

Conversely, Andrew Harding, chief executive of the Australian Racing Board, and Maurits Bruggink, executive director of the International Federation of Horseracing Authorities, detailed during a panel discussion what they described as threats to racing from the exchanges.

Harding emphasized that exchanges threaten racing's integrity by allowing customers to wager on horses to lose. He also challenged suggestions that North America should establish a racing industry-owned betting exchange to support the sport, referring to such a plan as "an illusory option."

Officials with the Horsemen's Benevolent & Protective Association are creating an offshore betting hub in the Caribbean to keep the loss of handle to unauthorized operators in foreign countries to a minimum.

An exchange that would return sizeable income to racing could not compete with the current operations in England and Ireland, Harding contended.

Additionally, if North America supports the concept, it will extend legitimacy to other exchange wagering operations that return little income to racing while draining handle with features such as fixed odds and wagers on horses to lose.

Bruggink focused on the integrity issue. He also said that many exchanges are operating in violation of the IFHA's stand that wagers should only be allowed when racing authorities have approved an arrangement and only from residents of countries where such betting is legal.

"We don't have an official position on exchanges, but we want them to adhere to our basic standards, and that doesn't seem to be the case," Bruggink said. "Betting exchanges simply don't take no for an answer."

The IFHA is hoping to raise international awareness to protect racing's interest. They hope to develop a seal of approval for wagering sites that meet racing's standards to separate themselves from those that use racing data and images without permission.

After hearing the criticism of exchanges, Niall Wass, Betfair's director of marketing, strategy and business development, said that racing leaders should embrace betting exchanges.

Betfair, which generates $5 billion in handle annually, has said that it is willing to negotiate protections for integrity as well as an appropriate financial return to American racing.

Wass stressed that his company has drawn typically younger gamblers to the sport and meets consumer demand with a product that has proven to be highly popular--benefits that could help American racing.

"There is a huge opportunity here for the U.S. racing industry, and it's time somebody stepped up and grabbed it," Wass said. "We've said for several years we're ready to discuss it and find the right resolution."

Betfair's aggressive business posture was highlighted by comments from Jockey Club President Alan Marzelli, who noted that the company takes bets on U.S. racing when it is simulcast to England but returns no revenue to the American sport, and by Andrew MacDonald, director of business development for Woodbine Entertainment Group, who said Betfair takes bets from Canadians even though such activity is illegal in that nation.

Wass countered by saying Betfair has been advised that it can offer wagering to Canadians but may not advertise its service. He also said that Betfair has operated in Australia for two years without any accusations of integrity problems.

Betfair spokesperson Mark Davies told IGN that Wass' comments don't necessarily mean that Betfair is developing a plan to enter the U.S. market in the near future.