Lessons from a Life Spent Protecting Racing from Illegal Betting – How Monitoring Betting Markets is the Key to Safeguard Racing Integrity
By KimKelly - Chairman, International Harmonisation of RacingRules Committee, International Federation of Horseracing Authorities
Since commencing my career in the racing industry as a Cadet Stipendiary Steward a good number of years ago I have always abided by the following guiding principles when performing my responsibilities in regulating the sport;-
• Always conduct yourself with unquestionable integrity.
• The Rules of Racing are the Stewards’ bible. Know them back to front and never work outside them.
• The betting on a race is the window through which the race should be watched.
Of course there are other principles which are of vital importance to Stewards but those three in particular have held me in good stead to this very day. It is my firm belief that they remain the foundation to an effective racing Steward and failure to diligently and constantly adhere to any one of them will likely result in the ability to regulate the sport of horseracing to be fatally compromised.
Racing relies on confidence. A famous Australian gambler once said words to the effect “Money lost, nothing lost. Confidence lost, everything lost”. And whilst that person was specifically referring to gambling on horses the same could very well be said of racing in general. If anyone who supports or takes part in racing loses confidence that the sport is being conducted fairly and with the utmost integrity then they will most likely be lost to racing at some point. And racing cannot afford to disenfranchise its customers and participants by having them lose that confidence.
There are many ways people can spend their money these days. Horse racing is just one such way. I often use the analogy of a person going to dinner along Hollywood Road in Hong Kong. There are 20 restaurants on one side of the road and another 20 on the opposite side of the road. If a person spends their hard earned money in one of those 40 restaurants and doesn’t get value for money they would be highly unlikely to return to that restaurant. They will go to one of the remaining 39 next time. The same can be said for racing. If a person reasonably believes they didn’t get a fair run for their money then they will likely find another way to spend their money in the future.
Racing regulators, primarily Racing/Stipendiary Stewards, have a responsibility to ensure that wherever possible people don’t walk away from racing as a result of a loss of confidence in the integrity of the sport. We must always remain diligent to threats to racing, threats which can undermine confidence in the sport. And one of those significant threats which has emerged in recent years is the impact that unlicensed and unregulated betting can have on any racing industry which provides product which these operators target.
It used to be that Stewards would peruse bookmakers betting sheets and rely on information provided by totalizator betting providers when they required betting information relative to a particular race or series of races. At that time bookmakers operated on course and information was able to be readily obtained by perusing betting sheets. That changed somewhat with the advent of telephone betting and bookmakers no longer being required to field on course but remained a highly useful regulatory tool. Since that time the landscape of betting has changed appreciably with burgeoning internet betting and the like. And whilst it is still available for Stewards to obtain information from regulated bookmakers who are licensed or approved to operate the same cannot be said for the aforementioned unlicensed and unregulated betting operators whose dealings can be out of sight of racing’s regulators. Putting aside the financial impact this has on racing as the Racing Authorities who put on the show do not receive any financial benefit from bets placed on that product, the significant integrity ramifications associated with these operators cannot be understated and must not be underestimated. It is an existential threat to the fabric of racing regulation and therefore it is incumbent on Racing Authorities to have systems in place to monitor the activities of rogue betting operators so that action can be taken when integrity is threatened.
Whilst it is highly likely that the actual identity of persons betting on these sites may not be known given the opaque nature of illegal and unregulated betting operators, it is essential for racing regulators to be aware of betting which is suspicious or clearly demonstrates that the integrity of a race has been compromised. The ever-increasing ability to be able to process large amounts of data within short amounts of time has proved to be essential in identifying and combatting integrity threats.
During my time as Chief Stipendiary Steward with the Hong Kong Jockey Club tremendous strides were made in establishing monitoring programs and techniques to identify suspect or unusual betting patterns. These monitoring capabilities extended from lay betting to spread betting and any further bet types which presented as integrity threats. Such betting patterns may result from ‘inside information’ being passed for gain or the Rules of Racing potentially being breached as far as every horse competing in the race to its optimal level is concerned. Both scenarios present as significant threats to the reputation of racing and are prejudicial to the integrity of the sport and accordingly must be identified and acted up, preferably before the race wherever possible.
Being notified before a race that betting patterns, whether on illegal betting sites or through regulated betting (totalizator/bookmakers), associated with that race are highly suspicious provides the Stewards with the opportunity to proactively address the situation before the barriers open. This can be done by interviewing persons associated with the horse(s) on which the suspicious betting is occurring and instigating measures aimed at ensuring that all horses compete on their respective merits. An example of the pre-race lines of enquiry which may be explored when suspicious betting occurs would be the tactics intended to be adopted during the race and whether the tactics are in accordance with the manner in which the horse has previously raced successfully. Early awareness of the suspicious betting also allows for the Stewards to view the race and the tactics employed during that race with the knowledge that betting associated with the race may not be as it should be. It is also critical to post-race analysis as it can be instrumental in establishing an adverse pattern which can be relied upon if needed. It is my experience that the early awareness capability of Stewards is enhanced by having ‘in house’ monitoring systems so that information is able to be instantaneously shared with decisions being made in a timely manner in respect of the most appropriate way to deal with the relevant circumstances. Outsourcing this key integrity function carries with it the potential for valuable time and information to be lost or delayed.
The emergence of the relevant departments within the Hong Kong Jockey Club to be able to identify suspicious betting patterns on illegal betting sites certainly complimented the already established ability to monitor regulated betting and, in my opinion, has created the gold standard for how Racing Authorities should approach this critical area of racing regulation. It has directly resulted in investigations and actions which otherwise may not be readily identified. This has, and will continue to be, a critical benefit to racing which relies on the confidence and support of its participants and the public to remain relevant. I have heard it said that a good culture in an organisation is hard to build but is easily destroyed. The same can readily be said for the confidence in the integrity of horseracing. Knowledge that the holistic betting picture as it relates to a race necessarily leads to increased public confidence. Confidence lost, everything lost.