Betfair or unfair, betting horses to lose a cause of concern

Nov 15, 2005 3:55 AM

It is hard to realize that what has been happening in Tasmania — the far distant and smallest of Australia’s eight states and territories — might have an effect on Las Vegas and American gambling, but it can.

Tasmania lies south of Australia, across the Tasman Sea, and is an island with some half million people living on it. It has been called "Australia’s southern playground," and there has been some playing around in recent weeks.

Paul Lennon, its premier since March of last year, happens to be a close buddy of Kerry Packer, Australia’s richest man as owner and chief executive officer of Publishing and Broadcasting Ltd. Packer also controls a vast economic empire that lies beyond PBL.

Packer is not a modest man, and is quick to explain his success and power. He summarized it when he said, "I don’t want to be left behind. In fact, I want to be here before the action starts."

He was, when premier Lennon met the folks from Betfair.

Betfair is the English betting exchange that acts like a stock market, including betting on losers.

That’s a regular happening in stocks, but it strikes at the heart of horse racing, a game in which the entire object is winning. Betfair alarms much of the racing world because it gives bettors a chance to bet on a horse to lose, with all the shadowy connotations that twist provides.

Betfair would love to get a foothold in the United States, but has not had any success in getting that job done.

It also set its heart on getting into Australia, where gambling is a craze, but all of the racing associations in that country rose up in protest. Australia’s off-track betting operation — TAB — liked the idea of a betting exchange, and supported Betfair’s bid.

Stymied in trying to get in the front door, Betfair decided to go around to the back of the house. It went after Tasmania.

It sold premier Lennon on the idea, and presto, there was Kerry Packer, on the scene before the action started, as usual. He became a 50% partner with Tasmania in backing Betfair, and two weeks ago Lennon announced he approved the project.

From Tasmania, Betfair would have access to all of Australia.

Racing in Australia was dismayed, and announced a lobbying effort to cross the Tasman and try to talk Tasmania out of the idea

Before they could even pack their bags, the Opposition in the Tasmanian Parliament rose up and smote it.

They knew that Lennon had visited Victoria for the Melbourne Cup, Australia’s biggest race, and they discovered he had been wined, dined and boarded by none other than Kerry Packer.

A hue and cry about conflict of interest arose, and the proposal for welcoming Betfair with open arms was tabled.

That does not mean it is dead. Not when Kerry Packer wants it.

So how does this affect Vegas and American gambling?

Betfair has been working hard in this country, attending racing meetings and symposiums and conventions, lobbying at every opportunity.

They bill themselves as betting of the future, and they have supporters in the ranks. The young stockbroking crowd that has applied computer techniques to handicapping understands the appeal of betting exchanges, and will embrace it.

Racing understands the appeal too, and the danger.

There are enough temptations out there now, with undetectable medication, weak racing commissions, sharp lawyers, and edge-seekers, to turn things into a jungle.

The added opportunity to bet horses to lose is more than American racing is willing to entertain, and with good reason. It is the antithesis of what racing is all about.

It will be interesting to see how the Australian gambit plays out. Right now, with support of the Tasmanian premier, Betfair is a good bet to get a foothold in that distant land. It will not stop there.

You will hear more of this in the months and years ahead. The battle is not yet joined, but you can wager a sou or two that it will be, and before long.