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13.
ARF Nations Vow To
Combat Illegal Gambling
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03/03/2003 |
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Asian
Racing Federation (ARF) members today called for the signing of the Good
Neighbour Policy to form the basis for dealing with the threat of Internet and
offshore operators encroaching on the regions' betting income that amounts to
66% of world turnover.
The danger posed to racing by unlimited, unregulated and uncontrolled (3U)
gambling formed the central theme to the wagering business session at the 29th
Asian Racing Conference in Auckland, New Zealand.
The problem was comprehensively discussed and potential solutions were proposed,
and the point was made consistently that something must be done - and done fast
- if racing in its known form is to survive.
Lawrence Wong, Chief Executive of the Hong Kong Jockey Club and the incoming
Chairman of the ARF, chaired this morning's session and opened by outlining the
challenges faced by racing's governing bodies against pirate betting
organisations and the hefty edge they possess.
Wong said:
"They pay no taxes and face minimal costs. This wagering takes away from
our governments' tax base and in many cases, such as with Hong Kong, takes away
from the charities that need our support."
John Schreck, the Hong Kong Jockey Club's Senior Racing Consultant and former
Chief Stipendiary Steward, said that betting exchanges posed the greatest threat
to the integrity of racing ever faced.
Betting exchanges are Internet-based third parties that facilitate the bettors
to "back" or "lay" - ie. play the role of bookmaker - at
generally more attractive odds than legal bookmakers.
Schreck said the only way to combat this menace was to make these exchanges
illegal. If this is not possible, then he said a structure should be established
to follow the money trail and make what is a covert and anonymous modus operandi
into an open operation.
"The racing industry must get on the front foot and take positive action to
run, regulate and control any type of betting on the races it organises. It must
not stand back and allow an unknown group of faceless bootleggers to rape our
sport."
Christopher Foster, Executive Director of the British Jockey Club (racing’s
regulatory body in the UK, with no control over betting) said his organisation
is currently engaged in dialogue with the betting exchanges "with the
object of cutting right across the privacy issue to allow us access to the
identity of people who lay horses. We believe this ability to get at the audit
trail will provide a very strong deterrent against malpractice."
Sir Geoffrey Palmer, a former Prime Minister of New Zealand, and currently a
partner in the Wellington-based law firm Chen and Palmer, strongly endorsed the
Good Neighbour Policy, signed by Hong Kong and Japan last December, as the basis
for co-operation to counter the threat posed by illegal offshore organisations.
Vice chairman of the world racing's governing body, the International Federation
of Horseracing Associations (IFHA), Mr Hans Stahl, stated that it was paramount
that the global racing industry has a strong Federation and that with the Good
Neighbour Policy as a foundation, countries should successfully work together in
the future.
"No country alone can solve this problem but building international
co-operation will give some opportunity to improve this situation," said
Sir Geoffrey, who proposed that individual racing bodies first reach a consensus
on this issue, and then request that their respective governments negotiate a
treaty that would lead to uniform legislation throughout the countries of those
nations in agreement.
Sir Geoffrey pointed out that this treaty would need to be compliant with
statutes enshrined in the World Trade Organisation (WTO) and the General
Agreement on Trade in Services (GATS), but said it was achievable if racing's
bodies willed it.
He said that if betting turnover continues to be eroded at its present rate,
"serious political and social implications will result" with the
turnover from racing, a major revenue producer for governments, going to the
pockets of those who contribute nothing to the sport or its upkeep. Sir Geoffrey
stressed that the ARF nations must be absolutely united before lobbying
governments for their assistance.
Dr Teruyuki Imahara, Presidential Counsellor for Foreign Affairs of the Japanese
Racing Association (JRA), informed delegates of the extent to which the JRA is
losing out heavily to illegal operators. Japan is the world's highest grossing
nation in terms of betting turnover but that income is now sliding.
He referred to bilateral Good Neighbour Policy recently signed with the Hong
Kong Jockey Club and expressed a desire for all ARF countries to sign it.
Foreign websites, Dr Imahara said, are reaping HK$934.8 million (US$120 million)
per annum. However, he said the most effective measure of countering this
problem is by blocking financial transactions thanks to the strong assistance
from the Japanese Government. As most transactions are carried out via credit
cards, the JRA has met with the major credit card companies to preclude their
customers from becoming involved in illegal activities. The majority of these
companies in Japan have agreed to stop such transactions. The JRA has also
sensitized other racing industries in Japan – motorbikes, powerboats and
cycling – to the threat of Internet wagering and established a unity of
purpose with them.
Secretary General of the British Horseracing Board (the governing authority for
racing in the UK, with no jurisdiction over betting in that nation), Mr Tristram
Ricketts, explained how betting tax in Britain shifted towards the Gross Profits
Tax (GPT) adopted in 2001, and how betting turnover has since soared "with
rises of up to 50% being widely reported." However, one of the reasons the
British Government was persuaded to introduce the GPT was that the radical
change in the tax structure would enable British gambling operators to compete
for business internationally. Therefore, this legislation has provided the
platform for offshore betting organisations to tackle markets overseas, where in
many countries it is illegal for them to do so.
As Mr Bob Charley, Chairman of the Australian Racing Board, later asked:
"Does the UK Government wish for its companies to actively encourage
citizens to go out and break the law?"
This, allied with the fact that British racing has up to half a dozen separate
entities controlling the sport, would make it difficult for Britain to sign up
to the Good Neighbour Policy, Mr Ricketts said.
Mr Tony Smurthwaite, News Editor of the Racing Post in London, explained the
mechanism of betting exchanges, and estimated that one exchange website is set
to generate turnover of between HK$116 billion and HK$155 billion (US$15
billion-$20 billion) this year.
One site, he added, has begun operating on Hong Kong racing and is achieving
turnover of approximately HK$3 million (US$384,000) per meeting, a figure that
is increasing almost weekly.
This equates to tax income of about HK$420,000 (US$53,000) that the Hong Kong
Government misses out on per race meeting, and HK$33million (US$4.2 million) per
annum.
Finally, in a speech entitled "The Protection and Development of Racing's
Intellectual Property,"
Neville Fielke, CEO of Racing Victoria in Australia, said racing must quickly
recognise its intellectual property (IP) to get to know its customers better. He
said IP was the key to addressing unavoidable issues, the potential consequences
of which, if ignored, will amount to the marginalisation of the sport.
Lawrence Wong, Chief Executive of the Hong Kong Jockey Club and the incoming
Chairman of the ARF, chaired this morning's Wagering session at the 29th Asian
Racing Conference in Auckland, New Zealand, and opened by outlining the
challenges faced by racing's governing bodies against pirate betting
organisations and the hefty edge they possess. "They pay no taxes and face
minimal costs. This wagering takes away from our governments' tax base and in
many cases, such as with Hong Kong, takes away from the charities that need our
support," he said.
John Schreck, the Hong Kong Jockey Club's Senior Racing Consultant and former
Chief Stipendiary Steward, said that betting exchanges posed the greatest threat
to the integrity of racing ever faced. "The racing industry must not stand
back and allow an unknown group of faceless bootleggers to rape our sport,"
Schreck said.
HKJC News
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