Revenue, Integrity and Risk in Anti-Illegal Betting

Revenue, Integrity and Risk is how horse racing’s heavy reliance on legal betting for revenue and integrity funding makes it particularly vulnerable to the rise of illegal betting.

‘Long-term sustainability depends on leveraging technology to deliver more engaging, data-driven, and personalised experiences to retain relevance with the next generation.’

‘Every bet placed with an illegal operator represents not only a legal breach but a direct and immediate cost to racing: revenue lost and integrity management funding impacted.’

“The whole racing industry is in danger of having its customer base undermined and illegal operators,” said IFHA Chair Winfried Engelbrecht-Bresges.

“They are specifically targeting customers aged 18-25, so the impact is both immediate and massive going forward. They are spending billions on advertising,”

“Some of it directly targeted at what we do, and we must do much more as operators to get a global united front and compete in this threat to the future of racing.”

‘If illegal betting operators successfully target, hook and hold this younger generation of racing fans then they are lost to the legal market.’

‘This scenario has significant implications for the future funding model of racing, which would collapse with the loss of younger customers from legal betting markets.’

‘Legal betting revenue flows into racing through product fees and race field fees paid by licensed wagering operators, totalisator and pari-mutuel returns, and government levies.’

‘These revenues fund prize money, breeding and welfare infrastructure, grassroots participation, and integrity programmes, and this economic model differs from country to country.’

‘In Australia, each state and territory has enacted race field information legislation requiring wagering operators to obtain a licence and pay fees for using Australian race field information.’

‘Licensed betting operators are required to pay race field fees that are either 1.5–3% of turnover or 10–20% of gross gambling revenue dependent on the jurisdiction and product.’

‘These contractual arrangements that accompany product fee agreements involve licensed operators that are required to share suspicious betting data and cooperate with integrity units.’

‘The global digital distribution of live racing coverage and real-time data has dramatically increased the reach of illegal operators, and consequently has increased integrity risks to racing.’

‘Racing has an economic unlike other sports where legal betting revenue flows through fees paid by licensed wagering operators, totalisator and pari-mutuel returns, and government levies.’

‘Global Illegal betting markets are a direct threat to racing and its integrity, and although it cannot be fully eliminated it can be managed so that the legal markets prevail at a higher rate.’

‘A multi-stakeholder approach is required in every racing jurisdiction as racing authorities should deepen and formalise intelligence-sharing arrangements with licenced betting operators.’

As Winfried Englebrecht-Bresges warned “racing is at an existential moment where it has to decide what its future is and illegal betting is the most common enemy at the gates.”

“Expanding faster than regulated market and targeting younger customers, and with the worst yet to come as racing risks losing our future customers.”