P2P in the Spotlight Down Under Again

Racing ministers from all eight Australian states and territories as well as New Zealand will converge in Sydney Thursday and Friday at the 2003 Australasian Racing Ministers' Conference, and online betting exchanges look to be the hot topic of discussion.

At last year's conference, the group formally established a betting exchange taskforce to look into the rising popularity of the P2P industry and its possible effects on racing.

The taskforce issued the first volume of its report in July 2003, and its members will give a formal presentation at this year's event.

At the center of the debate is how much revenue the racing industry is losing as more and more punters turn to exchanges for betting. Ministers are also concerned about punters' ability to anonymously bet on horses to lose and profit from it. The situation has opened a Pandora's box of possibilities, including tampering and the throwing of races by jockeys, trainers and owners.

Many of the same concerns were raised two years ago by British racing officials when Betfair.com, the leading betting exchange, came to prominence.

U.K. regulators and racing officials decided the best way to deal with the rise of betting exchanges is to license and regulate them. Betfair and its competitors have revenue agreements with U.K. racing industry groups and are regulated by gaming authorities.

Australian punters can access betting exchanges even though P2P betting isn't licensed or regulated in Australia. Betfair instead targets Aussie punters through its offshore servers. Company officials say they want to be regulated and have asked the government to grant the group the country's first betting exchange license.

Meanwhile, a report detailing a review of Australia's Interactive Gambling Act, which has been ongoing this year, is expected within a month.

Individuals and institutions have recommended everything from imposing more limitations on I-gaming activity to abolishing the Act and legalizing all forms of Internet gambling.

Racing ministers have been split on how to deal with betting exchanges. Officials in the Northern Territory have given their support to Betfair and have encouraged others to follow suit. But Damien O'Connor, the racing minister for New Zealand, is concerned that exchanges are sapping much needed revenue from the industry and worries that "unscrupulous" people could benefit from the defeat of a horse.

Discussions at this week's conference could play a major role in how Australia's P2P policy is shaped.