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In all the debate over the
licensing of betting exchanges in Australia, a constant cry has been the
terrible threat to integrity that they allegedly create.
But what is missing is any
indication of what, in the eyes of our stewards and racing officials, could be
done to reduce the integrity threat to what they might consider manageable
levels.
As a society we have any
number of laws which are designed to limit anti-social behaviour. In Australia
at least we have a society where most rules are observed most of the time,
however we do have jails full of law breakers indicating that that inevitably
they get broken.
Racing has a rule book too,
consisting of more than 200 Rules of Racing. This has evolved over 200 years of
racing and one would imagine that there are now provisions to penalise just
about every way that racing's integrity could be breached.
But the racing establishment
would have us believe that the introduction of betting exchanges would introduce
myriad new ways that races can be rorted, so diabolical and obscure that the
existing Rules of Racing could not be used.
So what are these new rorts?
I challenge the powers that be
to come up with 100 ways (if they can) that laying horses on a betting exchange
could be used to corrupt racing and then explain why the existing Rules could
not be used to stop it.
One would have thought that
the 5 years of UK experience would have exposed most, if not all of the novel
ways that an exchange could be used in this way. However we don't see any
indication that Australian authorities are seeking to learn from the UK
experience. More that they are wilfully avoiding applying the same energy to
regulating exchange betting as they are to banning it.
At least part of the attitude
of Australian racing authorities to exchange betting is tamely toeing the line
set by
that exclusive club,
the
International Federation of Horseracing Authorities,
membership of which entitles racing administrators to sip champagne in each
others committee rooms.
It is
interesting to note that in spite of IFHA's rhetoric, the British Horseracing
Board has not been drummed out of the Federation for allowing the heinous sin of
betting exchanges to exist in the UK. Could it be that it is the British
Government which issues the licenses and not the BHB? What then is different
about the Tasmanian government issuing a license to Betfair?
It is of great
credit to Betfair, the leading exchange worldwide that it has voluntarily moved
to tighten up its own procedures where fraud has been attempted and has shown
itself willing to work with sporting bodies to share information about untoward
activities. It is not Betfair's fault that in an Australian context, racing
authorities have refused to sign its Memorandum of Understanding, which would
permit Betfair to divulge information about account holders without they or the
authority breaching Australia's or the UK's Privacy laws.
For it is the
ability to identify account holders and link them to particular betting patterns
which is why exchange betting is less likely to be used to corrupt racing than
anonymous punters betting with cash through TAB's and bookmakers.
Betfair's first
line of defence in its own integrity controls is to ban trainers, jockeys,
owners and stablehands from holding accounts with it. Therefore, the only way
that an insider can use Betfair to lay a horse they think cannot win is to use
an account in another person's name. It has to be a real person because to open
an account a 100 point identity check must be provided. To prevent money
laundering Betfair take care also to ensure that the source and destination of
funds flowing into and out of the account match the account holder.
So a licensed
person wanting to use Betfair to lay a "dead un" has to find someone he trusts
implicitly with the large sums of money he will have to use to make the exercise
worth bothering with. He has to get his own money into that person's hands and
hope like hell that they will pay him back when the scam succeeds.
The second line
of defence is to look at the win profile of specific Betfair accounts.
Betfair know in
general what percentage of their clients are consistent winners. For those who
win mostly by backing horses, their position is little different from TAB
punters and Betfair and racing authorities would not be greatly concerned.
However, Betfair
account holders who consistently win by laying horses are immediately suspect.
It is however a
simple matter to scrutinise those accounts to see if any pattern emerges. If the
punter is acting on inside information, it will necessarily be from limited
sources. No one has intimate knowledge of what is going on in every stable.
So if Betfair
see an account holder laying horses from the same stables or ridden by the same
jockeys and they have an above average success rate, such activity immediately
raises suspicion.
Such analysis is
not dissimilar to that conducted by stewards today, where a sudden change in the
strike rate of a stable is likely to attract a "dawn raid" where evidence is
sought of drug treatments and so on.
In the UK,
Betfair's identification of accounts with abnormally high win ratios on lay bets
has led in some cases to Jockey Club stewards asking for the account to be left
open, in order for evidence to be gathered which will support charges being
laid.
Whether the
activity is tolerated for a time or not, the fact is that someone trying to
benefit from malpractice is being actively monitored by Betfair and the
information is freely shared with racing authorities subject to the appropriate
legal agreements being in place.
The only way
that this monitoring would not be available here is if Betfair refused to do so.
In the Australian context, Betfair have already said that they are prepared to
make it a condition of being licensed that they will not allow licensed racing
people to have accounts and they will also share information with racing bodies.
It will be interesting indeed
to see if TabCorp will agree that no licensed person should be able to have a
TAB account. We already know that they do not provide the details of individual
account holder transactions to racing bodies unless compelled by a court order.
And of course because a substantial portion of TAB transactions are in
untraceable cash, information about who placed the bet is impossible to obtain.
Much of the argument over lay
betting on exchanges centres around the fact that it provides, for the first
time, an incentive to "give a horse a run". In other words to run an unfit
horse, knowing that it cannot win.
The practice of "giving a
horse a run", has been going on for time immemorial however, the incentives
being to get the handicap down, to give someone else a better winning chance or
maybe to get better odds next time. The fact that a horse has been given a large
drink of water or missed a training gallop or chewed through a bale of hay on
the way to the track is not always readily identifiable, but that doesn't mean
that measures cannot be taken.
For instance
Australian stewards have Rule
of Racing 140,
which says:
(a) A trainer of a horse that is included in the
final acceptors for a race must ensure that such horse
is fit and properly conditioned to race, and
shall report to the Stewards as soon as practicable
any condition or occurrence that may affect its running in the
race.
Every day of the
week, horses are presented which are manifestly unfit to race and yet it is
impossible to recall a single incidence in living memory where stewards have
ordered a horse to be scratched because it is too fat.
Weighing horses
is one way to check on their condition, but the experienced eye of the stewards
ought to be able to detect an unfit runner. After all, there are any number of
bookies runners sending back reports from the mounting yard and betting moves
against unfit runners often occur.
If racing
authorities were really interested in maintaining the integrity of racing,
action against allowing unfit horses to race would be a very good starting
point.
© 2010 Published 20/07/05
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