Ladies and gentlemen_

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					           IFHA response to cross-border betting

Presentation by Maurits Bruggink, Executive Director of the
IFHA to the 30th Asian racing Conference in Seoul, 23 May


Thank you Chairman and good morning Ladies and Gentlemen,

I am very pleased to start off today with an issue that is
international by nature and that is effecting the business of all of
us. Cross-border betting is an issue in Asia, but equally in
Europe or the Americas.



Let me first say something more about our organisation.

The International Federation of Horseracing Authorities, or
IFHA, is the representative organisation of national racing
authorities in over fifty countries. In some of the countries, our
members have only authority over the organisation of races, in
others, they are also involved in the organisation of betting.
The work of the Federation is carried out by different
committees, all of which have representatives from the three
main racing continents: the Americas, Europe, and Asia.

The supervision of our activities is in the hands of an Executive
Committee, whose Asian members you find on the PowerPoint
above. This Committee meets twice a year and once a year, all
Members meet in conjunction with the Grand Prix Arc de
Triomphe in France. Our international federation is established
under French law with offices in Paris.
We have a part-time staff to deal with administration, breeding
and racing matters and, since one year, the Federation has
appointed an Executive Director to deal with the problems
associated with cross-border betting. The Executive Director is
me and I report to one of the Federation’s Committees, the
Steering Committee on Wagering.


The objective of our international organisation is to coordinate
and harmonize the rules of the member-countries regarding
breeding and racing. This increases the standards of racing
and allows for the international participation in them.

With the rapidly evolving new technologies and cross-border
betting, the Federation now agreed to take joint action against
the problems related to pirate betting. The first actions we
undertook were:
    the creation of our “three-continent” Steering Committee
      on Wagering, that you saw in the previous transparency;
    the appointment of an Executive Director to propose and
      execute an Action Plan, of which I will tell more later, and;
    the adoption of a joint position to promote.

Good Neighbour Policy

Our joint position was formally adopted in October 2004. It was
originally proposed by the Asian Racing Federation and, with
some modifications adopted as the official position of the racing
authorities across the world. You name it “Good Neighbor
Policy” – we refer to it, a bit boringly perhaps, as our article 28
of the International Agreement on Breeding, Racing &

What does this article 28 say? It has two key components. The
first reads as follows.

  • Using racing data or images for wagering purposes is only
    allowed with the express consent of the organization
    staging those racing events and/or its relevant rights

In other words, we claim our “intellectual property rights” and
wagering rights on what is a very expensive product to produce:

This is particularly relevant in some of the racing nations where
the rights are in the hands of different organizations. For
example, in various countries, the simulcast rights are in the
hands of the race tracks, whereas the data rights lie in the
hands of a centralized body.

The second element of our position is:

  • Wagering opportunities shall only be offered in another
    country with the express consent of that country's relevant
    governmental authorities, if required, and in compliance
    with the legal and regulatory requirements of that country.

This means basically that betting websites should not take bets
from people living in countries where this is forbidden.


Unauthorised betting, whether it is cross-border or not, has
obviously a negative impact on our finances, as it does not pay
for the racing. I was last week in a country with a thriving racing
industry, despite the fact that of the total betting volume, an
estimated and stunning 60% was done illegally!

The graphics above illustrate the important contribution of
betting to racing in some countries. They are figures from the
national racing authorities as they have been reproduced on the
Federation’s website. They are from 2003 and expressed in
billion US dollars.

The differences in take-outs could be explained by the different
objectives pursued by betting policies; the different structure of
the racing economy; or the allowed forms of betting.

In general, we can say that the contribution to racing from
pools, or pari-mutual systems is significantly higher than those
from bookkeeping. The contributions of betting exchanges are
again much lower. An illustration to this is the UK, where all
three forms of betting are allowed.


Unfortunately, the financing of our industry is increasingly
threatened by off-shore, unauthorised betting operators.


The pirate operators, we know, mainly operate from soft
jurisdictions. They are established there because first off all
they are allowed there. Online gaming is not allowed almost
anywhere else in the world except through the licensed national
single operator system.

Today, there are thousands of betting websites and the majority
of them will not pay the racing authority or rights holder a fee.
Most of them will also take bets from the entire world, knowing
that their service is unlawful in most countries.

More will be said about betting exchanges in a presentation
later this morning, but in view of the controversy it is causing in
most parts of the world, allow me to make the following
comments. Our International Federation does not have views
on any particular form of betting, whether pool, bookmaking or
exchange betting.

However, we do have our International Agreement that says
that operators should not take bets from people living in
countries where this is forbidden by law. Unfortunately, none of
the betting exchanges respect this rule.

The problem is like with any other form of online betting; it is
difficult to enforce our Good Neighbour Policy on the internet.
But it is not impossible!

ACTION PLAN – Intellectual Property Rights

In order to fight unauthorised betting and pirating of our product,
we have developed an Action Plan. This Action Plan focuses
on online, cross-border betting and less on domestic illegal
betting. Let me highlight some of its components and also
make some suggestions how you could take part in this Action


A key focus of our Action Plan is about the protection of
Intellectual Property rights. With respect to the use of racing
data, simulcast and betting, we will have to ensure to impose
the principle of “pay-for-play”, as it is done by for example the
music or software industries, through intellectual property rights.

At national level, intellectual property rights protection is often
not an issue. The betting is monopolised and the use of your
racing data for betting purposes is ruled by criminal law.
However, racing is getting more and more international. In the,
you can bet on Hong Kong races, US races are simulcasted to
Europe, South African races are simulcasted in many parts of
the world, just to name a few examples. We expect more of this
to happen, due to the development of new technologies like
interactive TV or mobile betting or the further roll out of
broadband capacity in households.

To get international protection of our rights on racing data, we
call upon the World Intellectual Property rights Organisation, or
WIPO to adopt appropriate legal acts. WIPO is a United
nations spin-off with over 150 member countries. The IFHA has
been formally accepted as observing party of this organisation
and in this framework, we talk to every government in the world,
including of your country, about protection of our rights on
racing data.

Many of the national government representatives were – to our
surprise – quite unfamiliar with our issue. So WE, and that
includes YOU, therefore need to do more to explain to
governments about the financing of our industry, the amount of
people it employs and the contributions to the fisc and why we
need protection of our product.

ACTION PLAN – World Trade Organisation


Similar to our representation at the WIPO, we also represent
the interests of our industry at the World Trade Organisation, or
WTO. This is another UN spin-off, whose aim it is the opening
up of world trade. Free trade in services is not something the
IFHA can support by definition. Our International Agreement
clearly implies that it is up to individual countries to decide
whether they allow foreign gambling operators or not. In view of
the restrictive policies in most countries, this leaves little room
for multi-lateralism or let alone global free trade.

The WTO has already an agreement on trade in services, which
dates from 1995. Almost every country in the world that is party
to this agreement has specifically excluded gambling from this
agreement. Off-shore operators therefore have no argument to
claim that their cross-border activities are legal.

The existing WTO agreement is currently being renegotiated
and it offers an excellent opportunity for both the Federation
and yourselves to talk to your government and ensure that
betting remains exclusively subject to national law and should
be excluded from this international free trade agreement.

ACTION PLAN – Trust Mark


Another part of our Action Plan is the launch of a Racing Trust
Mark. In order for a betting operator to show that he is in
compliance with our International Agreement, or Good Neighbor
Policy if you like, we intend to offer the possibility to carry a
Racing Trust Mark.

The Racing Trust Mark aims to:
   Encourage betting websites to make contributions to
   Give those sites a tool to market their site as one that
    supports the racing industry and respects our Good
    Neighbor Policy;
   Show consumers that they are paying for an unpirated

We hope to present you the Racing Trust Mark by October this
ACTION PLAN – National Lobby


Another component of our Action Plan is assisting the
representation of racing interest at national level.
Unfortunately, in many countries, there are still bad laws that do
not ensure the appropriate funding of the industry or, the
enforcement authorities act insufficiently against unauthorised

In all these situations, we aim to help. We provide information
about legal and policy developments and we advise on when
and how to take action.

We have already talked directly to some governments, together
with the national racing authorities. We can be of particular
help to explain to your authorities how our industry operates
and is funded in other countries, which laws work and which

Whatever the issue in your country, we are there to support
your case and I invite you to contact us.



There is much more to say about our international action but I
have run out of time. Before we meet again, I invite you to visit
us at our website, which contains a wealth of updated

Thank you for your attention.

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