Betting exchanges are 'the biggest worldwide threat to racing's integrity' and racing jurisdictions around the globe should pressure their governments to outlaw them, the Hong Kong Jockey Club said yesterday. Jockey Club director of racing Winfried Engelbrecht-Bresges said even the issue of turnover piracy was secondary to the threat posed to racing's image by betting exchanges. His comments came as it emerged that a second betting exchange, Spinbet, was set to follow Betfair by launching operations on the Hong Kong market. 'For me, this is the biggest threat to racing's integrity, and it is a worldwide threat,' said Engelbrecht-Bresges. 'I admire the idea of the exchange - it is very clever - and I don't question the integrity of the people running them. In fact, I can see that the idea may have some merit on sports where integrity is not a central issue. 'However, their growth in relation to horseracing is very negative and will place racing control in an impossible position. Every jurisdiction in the world should work with government to ban this.' A betting exchange is radically different from a traditional Internet bookmaker in that it is not an odds-setting organisation. Punters establish cash accounts and then offer each other odds via the betting exchange's Web site. The betting exchange acts as a go-between to match the backer with the layer at whatever odds they agree and then takes a small percentage from the winning side of any 'matched' bet. Betfair started regular operations on Hong Kong racing with last week's Happy Valley meeting, joining overseas and illegal bookmakers in the lucrative SAR market. Engelbrecht-Bresges went on: 'People might say that we are overreacting, that the temptation or the capability to make money from a losing horse has always been there in the past. But what I am saying is, yes, it may have been there as an illegal act but now it has a legalised platform.' Commentators have likened the exchanges to trading on the stock market but Engelbrecht-Bresges was at pains to dispel the notion. 'This is nothing like the stock market, or even like operating race betting in an environment of licensed bookmakers,' he said. 'Every investor on the stock market has stringent registration requirements before they can invest, so there is the capability of monitoring actions. Exchanges are ideal vehicles for illegal bookmakers to balance their books, too, so their operation assists that area of gambling. 'I understand the people at Betfair have been very willing to co-operate with authorities in England but even with their assistance, it is very difficult to be sure of who is doing what.' Engelbrecht-Bresges said an insider with knowledge that a horse could not win a race, perhaps for reasons of health or fitness, should not be presented with the easy opportunity to profit from it. 'What of the owner who knows his horse has some problem and can't win, but he can profit from it losing? There is already an example in England of a horse being laid on a betting exchange, its odds moved out from 7-1 to 67-1 and it broke down in the race. 'What about the unfashionable jockey with just a couple of no-chance rides who finds he is drawn next to the favourite? He has the opportunity to hamper the favourite and prevent it from winning and now has a way to make money from it.' Engelbrecht-Bresges added: 'In the past, our only concern would have been if someone had a link with an illegal bookmaker. Not everyone is in that position, but anyone can gain access to a betting exchange. For the first time, there is access for anyone to bet on and to profit from a horse losing. 'I don't want to suggest that racing has an integrity problem, but this kind of operation creates a situation that is very high risk. Suddenly, racing control authorities will have to worry about everyone involved in racing.' Engelbrecht-Bresges said the job of the stewards would become a nightmare. 'Every time an incident happened in a race, everyone would be asking themselves the same question - was it an accident? There are many accidental occurrences every race and they each have their effect on the final result but overwhelmingly they are accidental. 'How does racing anywhere deal with the alternative perception? And we are especially concerned in Hong Kong, where there is so much attention on everything that happens in racing.' With Betfair commencing full-time Hong Kong operations and Spinbet ready to follow suit in the coming weeks, Jockey Club director of betting Henry Chan Shing-kai is preparing a letter to the Home Affairs Department to advise it formally of the latest development in the Internet gambling scene. 'Obviously, it will be up to the government to decide if the existing Internet betting legislation is adequate but it cannot be aware of everything. The government is normally aware of something when it is on their desk and I think it is our duty as the experts in the field of betting to keep them informed,' Chan said. 'Now there is a legal platform allowing people to lay bets against a horse, anyone can be a freelance bookmaker. We have to encourage the government to monitor the situation here and through its offices in the UK.' British bookmakers have been operating via the Internet on Hong Kong racing for some time, and it is illegal for SAR residents to place a bet with them, but few experts regard them as a threat to Hong Kong turnover as they are 'risk averse' and hold interest for only the smallest punters. A betting exchange, however, takes no risk and therefore has no limit to the scope of its holdings.