Betfair Gets It's Gambling License

Published: Thursday, November 03, 2005 Online-Casinos.com

BETFAIR GETS ITS GAMBLING LICENSE

Tasmania comes in for criticism, but it's a yes

The Australian press was all over the much awaited story this week that the Tasmanian government had awarded UK betting exchange giant Betfair with a license. Some of the comment was not very friendly, as some heat has been generating in the racing industry by the lomngstanding and much debated application.

The Sydney Morning Herald led with "Tasmania was on Thursday branded a pariah after announcing it will license the British online gambling agency Betfair, in a move the racing industry fears will threaten the sport's integrity."

Tasmnian premier Paul Lennon said the decision will provide more choice for Australian punters, as he approved the controversial 50-50 joint venture between UK-based Betfair and Kerry Packer's Publishing and Broadcasting Limited (PBL) in Hobart.

The deal has faced tough opposition from the Australian racing industry, but Mr Lennon dismissed the prospect of backlash from other governments and racing authorities.

"I believe reasonable people will be more than satisfied with what we've done," he told reporters.

"This is providing choice and opportunity for the people who keep racing alive in the country - punters. And this is the best deal that punters could have - more competition in the marketplace."

Betfair has operated on Australian racing and sports for three years, but an Australian licence will allow the company to advertise and promote locally.

PBL executive chairman James Packer said Betfair's introduction to Australia would help improve racing's prosperity by attracting new punters to the sport and providing more benefits for existing punters.

"It's the best company in the world operating in the betting exchange space," he said in Hobart.

Pundits have voiced concerns of financial losses to the racing industry, which gets its income via a percentage of takings from TAB betting.

They also raised integrity and probity issues, based on Betfair's policy to allow punters to back horses to lose.

But Mr Lennon said Betfair would operate under strict regulatory guidelines and the licence was expected to boost the Tasmanian racing industry by up to $40 million a year by 2009-10.
Under the deal, Tasmania will earn 35 percent of the gross racing profits on all Australian racing events, 15 per cent of the profits on other sporting events and 10 per cent of the profits on international events.

The state government will retain five per cent from each category as tax revenue and distribute the rest to the racing industry, through state gambling agency Tote Tasmania.
Betfair co-founder Edward Wray said the Tasmanian government had subjected Betfair to a "rigorous and fair" consultation process. "It is important that the racing industry prospers," he said.

"Our proposal to establish Betfair Australia offers tremendous opportunities for Tasmania, will introduce much needed competition into the wagering market and will provide significant support for sport and racing across the nation."
Mr Lennon said the challenge for other states was now to bring their gambling agencies into line.

"This service ... already operates. It was operating on Melbourne Cup day. The problem with it from my point of view was that it wasn't operating under Australian regulations and it wasn't paying commissions to the Australian racing industry," he said.

Legislation to allow the licence will be introduced to parliament next week.

The legislation, if approved by the state's Upper House, will allow Betfair to establish its second global hub in Tasmania, creating about 150 jobs.