Racing ‘a sardine in a swimming pool full of sharks’ as illegal betting grows

The illegal betting market continues to grow at almost twice the rate of legal gambling, with unlawful websites accounting for almost two-thirds of online wagering options.

Unlawful behemoth Citibet, an online exchange experts have previously claimed turns over north of US$50 billion a year, has rebounded in recent times after authorities had some success in curbing its presence.

“The Hong Kong Jockey Club last month had one racing meeting that turned over about US$250 million. Citibet were not far behind that in terms of the scale of their turnover on Hong Kong racing,” Tom Chignell, the Jockey Club’s executive manager of racing integrity and betting analysis, said on Friday’s final day of the Asian Racing Conference in Melbourne.

“Year on year growth, it was up about 9 per cent last year on Hong Kong racing. While Hong Kong racing is a big product of Citibet, it’s [also] Australia, it’s all the major racing jurisdictions across the world, and whilst law enforcement and other Australian government agencies really did take on the illegal market and certainly had success, it’s rebounded.

“In 2019, Citibet turnover on Australian racing really dipped. It’s since doubled, and while it’s not as big as the Hong Kong turnover, it provides a serious integrity threat still.”

Jockey Club executive director of racing Andrew Harding said the Asian Racing Federation Council on Anti-Illegal Betting & Related Financial Crime continues to work on educating governments about how restrictions on legal operators can drive punters to unlawful betting websites.

“The Asian Racing Federation’s council on anti-illegal betting and related financial crime did a study where they scraped data from 50 global betting sites, and it’s their assessment the growth in illegal gambling is outstripping the growth in the legal market,” he said.

“The United Nations office on drugs and crime puts the total illegal market annually at US$1.7 trillion. That’s not just racing – that’s everything from US college football to British darts – but it gives us perspective.

“We’re a sardine in a swimming pool full of sharks, and the sharks are multiplying and growing.

“There are jurisdictions in this room where the taxation of wagering is at such punishing high levels customers are driven into the arms of illegal operators.

“There are jurisdictions in this room where controls on offering new bet types and the capacity to bet online are so restricted as to be asphyxiating, while the illegal operator has no controls whatsoever. The council is playing an important part in educating governments about this.”

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Chignell added continued education of gamblers themselves is also crucial.

“I do think there’s some sort of element about educating the gambler about the risks of betting illegally. Not being paid by agents is quite a common thing,” he said.

“But really what it comes down to is price and product. Can the legal market compete on odds with Citibet and other illegal operators, and can it compete on product? Can it offer the same betting options Citibet are offering? If the legal market cannot compete they’re two key incentives to encourage people to bet illegally.”

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