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Be fair with Betfair.
The
following letter to the Sydney Morning Herald was
never published, possibly for exceeding the permitted
word count. The author then sent it to us.
----------------------------------------------------------
Be
fair with Betfair.
Letter to the Editor, Sydney Morning Herald
Sent: 2003-04-02 22:51
I
write in relation to the Craig Young article titled,
“Betfair faces millions in fines after content ruled
illegal”, dated 02-Apr-2003.
The article title is extraordinary, “ruled illegal”.
This
is misleading as it implies a court ruling relating
to legality! This is not the case. The article is
ill-informed and raises questions in relation to the
impartiality of Craig Young. Is Craig Young a journalist?
If so, is he paid? If so, by whom?
Where
to start? At the top.
The
multibillion-dollar betting exchange Betfair faces
fines of $1million a day after the Australian Broadcasting
Authority found the UK-based company's content was
prohibited. The Herald has obtained a document which
also states the ABA believes "there was sufficient
evidence of possible breaches of sections 15 and 61EA
of the IGA [Interactive Gambling Act] to warrant the
referral of the matter to a law enforcement agency".
Well
it would appear commendable investigative journalism
by Mr Young. The document is not available to respondents
such as myself from the ABA web site. Nevertheless,
here goes.
In relation to an offence against s15 of the Interactive
Gambling Act 2001 (Cth) it would astound me that Betfair
was not offering “a service to the extent which it
relates to betting on a contingency”, and a reading
of s5 and s8A might suggest it is excluded from the
definition of interactive gambling service” for the
purpose of s15.
And
then s61EA “Interactive gambling service advertisements
not to be published in Australia”… It seems substantial
legal opinion would be needed to determine this matter.
Tim Ryan’s legal opinion cites the Gutnick Case, which
I had previously understood related to publishing
for the purpose of defamation law and no reference
was made (one way or the other in relation to publishing
for the purpose of advertising). But I am not a lawyer,
just a lay person reading the written word.
"Any
idiot who has read the legislation knows that betting
exchanges can't do what they are doing in Australia,"
Ryan said.
I have read the legislation, and it seems I am clearly
not an idiot since, I do not know betting exchanges
can’t do what they are doing – perhaps it is only
the idiots who know this!
"The legislation is clear - do not target Australians,
do not provide prohibited gambling services, do not
pass go. Betfair have a customised menu for Australian
users - how stupid is that?"
In relation to gambling, which is not exempt by s8A,
Australians may not target Australians. The exemptions,
to my mind, have the practical effect of stopping
Australians offering gaming product to Australians.
However, as stated, betting is exempt from this restriction.
Why not target Australians? The Commonwealth Act has
restricted Australian betting providers from offering
in-the-run betting to their great detriment while
their international competitors (including but certainly
not restricted to Betfair) cash-in on Australian betting.
"The High Court of Australia decision in the Dow
Jones v Gutnick decision is simple - something is
published where it is read."
Do
you know I have read that decision and the Victorian
Supreme Court decision, which it upheld and I (a layperson)
understand your article should append the words “…
for the purpose of defamation law” if it seeks to
be investigative and report the news rather than mouth
an interested individuals perspective.
The amount on offer is causing ructions within
racing's ruling bodies, the various state governments
and TABs, which fear income streams will be eroded.
The
last time I looked the three underlying TABs were
public companies, big boys who should stand in their
market place and compete.
Betfair's
business is 70 per cent on horseracing and 30 per
cent on sports betting. It began operating on Australian
meetings during the 2002 Melbourne Cup carnival and
now offers its service on every Australian capital
city meeting and some provincial races.
I
missed the part where Craig Young spoke about the
capacity that now exists for bookmakers to bet-back
through Betfair which has seen a resurgence in the
UK bookmaking industry, with record revenues paid
to the racing industry since it commenced operations.
Or was this research too fundamental to undertake?
Using true probability mathematics, a punter having
100 $50 bets on a $5 chance generates turnover of
$5,000 and will break square. The NSW TAB's return
to the racing industry from the $5,000 is $224; bookmakers
return $50, while Betfair nets $80 and from that is
looking to pay the industry a dividend. At 20 per
cent it would hand over $16.
I’d
like to be in the SMH punters club where everybody’s
a winner – punters break square, TAB takes a profit,
and the racing industry gets paid.
Go
figure: $5000 bet and won (punter breaks even), TAB
takes its profit, racing industry takes a cut!
Using
truth: a punter having 100 $50 bets on a $5 chance…
will, on average, not break square. The punter, on
average, will lose.
And
some more truth: based on the SMH figures and a gross
profit assumption of 15% turnover by TABs: For every
$1.00 lost by a punter with TABs, they pay approximately
30¢ to the racing industry. For every $1.00 lost by
a punter with Betfair, it pays: 20¢ (per the SMH figures).
When
punters are getting a better run for their money and
turnover through more transactions – it becomes more
fun, greater entertainment and something they might
choose to divert additional discretionary expenditure
towards!
I
can only concur with the attitude attributed to Victorians.
The contrast in their attitude and that of Tim Ryan
might reflect the relative success of the racing industries
in New South Wales and Victoria. Victoria is moving
from success to success.
Yours
faithfully,
Alan Pedley.
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