19/3/2004 edition

Betting Exchanges Doomed?

In Rod Nicholson's "Rails Run" column in the Sunday Herald Sun, March 14, 2004, Nicholson wrote, "Australia is set to ban betting exchanges, with enormous pressure being applied to the Federal Government to outlaw them immediately."

Rod Nicholson claimed that the Australian Racing Board has shifted its stance from previously being prepared to accept betting exchanges provided they paid the racing industry to one of opposition. He quoted chief executive Andrew Harding:

"Betting exchanges are entirely incompatible with the integrity of racing and should not be permitted to operate on our shores."

The TABs agree with the above. They take out 15% plus of the pools compared to a maximum of just 5% taken out by betting exchanges.

Remember the Fine Cotton affair in Australia? Did we have betting exchanges operating here all those years ago? The recent allegations of race fixing in England have come as a godsend to the vested interests. Blame the betting exchanges. Trainers running unfit horses and betting against them on betting exchanges - blame the betting exchanges. With correct policing of betting exhanges that can be controlled. Unlike with with TABs and at racetracks, no moneys transacted on betting exchanges is anonymous.

Rod Nicholson quoted Victoria's Racing Minister, John Pandazopoulos. Nicholson said John Pandazopoulos "insists exchanges are costing the state's racing industry millions of dollars a year". John Pandazopoulos said:

"It is a basic right for any great sport such as racing to control its intellectual property rights without being undermined by freeloading gambling operators."

We believe there seem to be some problems with that.

1. Betting exchanges such as Betfair have offered to be licensed and pay a turnover commission. That being the case they are hardly "freeloading gambling operators".

2. What license fees does the Victorian TAB pay all the other "great sports" other than racing? Does the Victorian TAB use their "intellectual property rights" and bet on them?

John Pandazopoulos' quote continued:

"...consumers need to be protected as well."

How are consumers being protected by being prevented from betting in pools where there is a maximum 5% deduction and instead betting in pools where there is a 15% plus deduction?

John Pandazopoulos, if you are serious about protecting consumers why do you still allow the TAB to:

1. Return $1.00 money back for a winning dividend but take the bet if it loses. Surely you must agree that is not fair to the the consumer? What have governments done about that?

2. Why do you permit the TAB to roun down. It is common practice elsewhere for 53 cents to be rounded up to 55 cents. Not with your TAB payout. 53 cents is rounded down to 50 cents. For everyone else 59 cents is rounded up to 60 cents. Not with your TAB payout. 59 cents is rounded down to 55 cents. Surely you must agree that the consumer is not being protected here? What have governments done about that?

We wonder whether the real issue is the belief, correct or incorrect, that racing and the government will get less revenue?

Assuming the national government is silly enough to ban betting exchanges, how will that ban be policed? Prevent banks from allowing credit card payments? That will do very little. You see, it is very easy to open an overseas bank account and transfer the money from there. The internet crosses national boundaries.

What about internet police? How about making it illegal for any Australian to even visit a betting exchange?

How about Ggovernment establishing a "Department for Online and Offline Gambling." All money to be bet online has to first be deposited with the Department for Online and Offline Gambling. This Government Agency will then look after you by depositing the money in authorised online gambling sites on your behalf. Should you wish to withdraw money from these sites the site operator will deposit the money with the Department for Online and Offline Gambling which will then credit your bank account.

Of course, because the Department is looking after you, a commission will need to be charged on all deposits and withdrawals. But there are other benefits as well. For example, the Department will be able to catch and tax as professionals any punters who win long term. The Department will also catch plenty of pension cheats - like your battling single mother with five children, who in reality is a professional gambler topping up her income with the pension.

It's also very easy to see how this idea can be transferred to the racetrack and casinos. After a full ID check punters are rewarded with their own VIP betting card which links into their betting account which is managed by the Department for Online and Offline Gambling. No more cash bets. No more laundering of money at the racetrack or casinos. No more theft of money in order to bet. Even problem gambling can be nipped in the bud.

Can you just imagine regular enquiries and visits from the Department for Online and Offline Gambling? "Mrs. Jones, you've lost $100 this week on the pokies. If that happens next week we'll stop your age pension.... Mr. Black, can you please explain where you obtained that $5,000 that you deposited into your betting account?"

Isn't it wonderful what Nanny Government can do for you when Nanny Government decides to look after you and protect you, the consumer.

This edition of Punt to Win:
Are betting exchanges doomed in Australia?
Night horse racing - should you bet on it?
Betting favourites in small fields
Money talks - Canterbury, Flemington betting tips from the track
Handicapping tips - weight and class
Future winners - unlucky horses
Punt to Win 12/3/2004
Punt to Win index

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