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SCMP Reporter

HK body says that the Internet gaming system threatens the integrity of racing

The British gambling firm that has alarmed the Jockey Club and the government with the global success of its high-technology betting exchange  system has offered to pay a 10 per cent levy on profits from Hong Kong bets.

Mark Davies, Betfair'sThe director of  communications directorof Betfair, Mark Davies, said in Hong Kong last week thatthe promise had been made to the Jockey Club.

He said  if laws were changed and Hong Kong-based punters were allowed to lay wagers with Betfair, it could even boost Jockey Club profits.

But he stressed the firm was rejecting bets from Hong Kong residents as it wanted to stay within Hong Kong law.

The offer was immediately rejected by the Jockey Club.

At present, because it wanted to stay within Hong Kong law

'We're  a registered bookmaker and a limited company. We're open and transparent and we want to work with sporting authorities all over the world,' he said.

'We're not out to steal Hong Kong revenue. We're not freeloaders. If we do increasing business on Hong Kong sports, then the turnover increases and the profits that we pay in a levy to Hong Kong - either to a government agency or the [Jockey] Club - will increase.'

But the offer was rejected by the Jockey Club.

The club's chief executive, Lawrence Wong, maintains the club's long-held policy of opposition to offshore gaming. 'It is not in Hong Kong's interest because it channels the money away from the government's tax system,' he said.

The Jockey Club has said that the betting exchange system is problematic as it allows a punter to bet to lose. This has obvious implications in a sporting business like racing, where insiders may have an influence on honest outcomes.

Mr Wong added: 'We fundamentally object to betting exchanges because they threaten the integrity of racing.  It provides opportunities for insiders with privileged information - such as owners, trainers and stable staff - to bet against their own horses.  This poses a global threat to legal and clean racing operations.'

Under the Gambling Ordinance, it is illegal for punters in Hong Kong to gamble overseas using the Internet or telephone.

The system used by the company is radically different from traditional bookmaking. Instead of betting on an event with a bookmaker laying the odds, Betfair acts as a middle man. One punter uses his Internet account to outline his bet, saying how much he wants to wager and at what odds. Another customer who wants to bet the other way also lodges his offer with Betfair. The company's sophisticated computer system then marries the two customers and takes a small commission,  - typically between 1 and 2 per cent, from the winnings.

Government officials did not answer e-mailed and faxed questions on the issue.  The Post revealed last week how the government had asked police to investigate the betting exchange system.



Jockey Club rejects betting exchange firm's 10pc offer