A report released last week by the Asian Racing Federation (ARF), “The State of Illegal Betting,” provides a present-day assessment of a variety of troublesome issues impacting racing worldwide.
The report “is intended to assist government policy-makers, regulators, law enforcement officers and those involved in the governance of horse racing and other sports, as well as people in the racing and betting industries, to comprehend the present scale, scope, and harm to society of illegal betting and related financial crime,” writes ARF Chairman Winfried Engelbrecht-Bresges in the publication's foreword.
The ARF, whose membership includes racing jurisdictions across Asia, Australasia and South Africa, has taken the lead in raising industry awareness while presenting a variety of recommendations on the widespread problem. Its Council on Anti-Illegal Betting and Related Financial Crime (ARF Council), established in 2017, published the report.
“Examples of illegal betting's influence on North American racing abound and it should concern every stakeholder across the sport,” said Patrick Cummings, Executive Director of the Thoroughbred Idea Foundation (TIF).
In 2021, TIF's white paper “Wagering Insecurity” highlighted incidents of pari-mutuel pool manipulation at one U.S. track and worked with regulators to take action to minimize its impact going forward.
“Since those initial findings, TIF has conducted its own research, while also being approached by concerned horseplayers, identifying more cases of pari-mutuel pool manipulation, including some in the last few weeks. These are spread across Thoroughbred and Standardbred racing, and while often on races which have smaller pool sizes, bigger circuits might not be exempt either,” said Cummings.
ARF Council member Thomas Chignell added insight on pool manipulation in a bulletin released concurrently with the Council's recent report.
“The bets placed into the tote are placed upon selections which are highly likely to lose and not on the most likely winning selection. The bets are large relative to the tote pool size and significantly shorten the odds on those selections, and in doing so, inflate the final dividend of the most likely winning selection which is subject to much larger bets with illegal betting operators.
“Incidents of dramatic, and often unexplained market movement, can cause confusion with regular bettors and undermine the public's confidence in the sport and the betting markets. Even if a racing authority does not operate the local tote betting, it is in the interest of the sport that customers believe the betting markets are fair and transparent.”
As the illegal market evolves rapidly, Cummings notes, legal betting operations have not kept pace and are susceptible, not just to haveing pools manipulated, but to having customers poached outright.
“The legal offerings to North America's racing wagering customers are practically unchanged for the last two decades,” Cummings said.
“A stagnant betting menu is not attractive and illegal operators are offering far more options to potential customers through online channels where their platforms are pitched adjacent to the most well-known legal brands,” Cummings said.
“And the long-standing issues of funding illegal accounts, or getting paid, is gradually being eliminated as cryptocurrencies become a preferred option.”
ARF Council members James Porteous and Douglas Robinson highlight the state of cryptocurrency funding in the new report. The Council also published a May 2021 paper on this specific topic.
While legal sports betting evolves rapidly in North America, agile illegal operators “will take the opportunity to capitalize on new US betting customers by marketing their online betting portals which are indistinguishable from legal Licensed and Regulated betting operators,” wrote ARF Council Chair Martin Purbrick.
Cummings added: “It can be easy to ignore the problems created by illegal betting when our own legal markets lack modern technology, protocols and oversight. Massive upgrades are necessary to protect customers, strengthen legal markets and build revenue.
“There is much to be done.”
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