|The Australian Harness Racing Industry is in an uproar following the decision by UK betting exchange agency Betfair to begin operating on last Tuesday's Harold Park meeting -- part of a one month trial.|
Betting exchanges on the Internet have existed since the mid-1990s, with the market dominated by the London-based Betfair agency, which operates a betting exchange web site under the Betting, Gaming & Lotteries Act 1963 and holds a bookmakers permit in England and Wales. Betfair indicated they currently earn commissions of around 5 million pounds per month.
In the simplest betting exchange model, customers are charged a commission by the exchange operator -- normally on net winnings on each event. A betting exchange is 'risk-free' for the operators as the revenue stream is no way dependent on the outcome of events on which the betting exchange is operating. Punters can also place a wager with Betfair that a horse cannot win a particular race.
While Harold Park Chief Executive Peter V'Landys claims that Betfair’s offshore operation ‘threatens the viability of racing in Australia” as “at least 80 per cent of race club income comes from TAB distribution, enabling race clubs to not only conduct race meetings, but also to provide prize money”, Betfair has repeatedly claimed that their model offers the choice of bets that punters obviously want, and has been repeatedly denied to them.