What is our position on betting exchanges?
Wherever there is betting there are going to be those who will seek to gain an unfair advantage, either through access to privileged information or, worse, trying to manipulate the outcome of races.

Threats to the sport's integrity have existed ever since betting began, and the current threats were capable of undermining racing's integrity prior to betting exchanges. However, the emergence of exchanges has provided an additional betting opportunity for potential corrupters.

Exchanges have also, however, provided a vital link in the chain to tracing where money has been won. A chain that previously has missing links and this made investigations hard to conclude.

Exchanges are here to stay and we take the view that as that is the case it is important that the relevant authorities maximise the positives provided by the audit trails in order to minimise the potential for malpractice and abuse of exchanges.

Exchanges may have made it easier for corrupters to profit from horses losing but exchanges have also increased our ability to detect and successfully investigate malpractice.

The Jockey Club announced in June 2003 an important breakthrough in its efforts to develop relationships with betting organisations which will assist the regulation of the sport. The leading betting exchange firms have signed a Memorandum of Understanding which gives us access to betting information on races the subject of concern and one has also been signed by the Association of British Bookmakers, representing the off-course bookmakers.

In addition, in response to the emergence of exchanges, the Jockey Club confirmed the introduction in July 2003 of restrictions on owners, trainers and stable staff laying their own horse to lose on betting exchanges.

Since the introduction of these rules, various owners have been found guilty of laying their own horses to lose on exchanges and were warned off for various periods. Additionally, over 10 jockeys and trainers, through the audit trail Betfair was able to provide, have been found guilty of passing information for reward to punters who used the information to lay the horses on Betfair.

Confidence in the integrity of the sport is as important for the betting industry and racing as it is for the punter. The development of Memoranda of Understanding with betting exchanges and bookmakers represents a significant advance in our ability to protect and maintain the integrity of horseracing. Previously, investigations into races that caused concern have often been hampered by our inability to trace the audit trail of bets struck.

The leading exchange firms are in constant communication with our Security Department and report betting patterns which they consider abnormal.

Under the Memorandum of Understanding, requests for information may only be made under certain circumstances, for example, if we have reasonable grounds to suspect a breach of the Rules of Racing or a threat to the integrity of racing.

What investment has been made in the Security Department?
Since the appointment of Paul Scotney as Director of Security, the Department has had its funding increased from £1.46m in 2002 to £2.76m in 2006 in order to enable:

• the employment of two betting analysts ensuring seven-day-a-week monitoring of the betting markets
• the employment of a fully resourced and funded Intelligence Unit. The use of intelligence and the way in which it is converted into evidence is crucial to our efforts to detect and deter malpractice. The system used to grade the value of the intelligence and its source is the same as used by all 43 UK police forces.
• an IT system used by the Intelligence Unit whereby intelligence received can swiftly be searched and assessed against all current records, ensuring that all investigating officers, wherever they are based, have instant access to the most current and relevant information when conducting investigations.
• two additional investigating officers making a team of 7 investigators enabling quicker investigations.
• the employment of 10 Weighing Room Security Officers to police the integrity areas of the racecourse such as the Jockeys’ changing rooms and the weighing room.

What steps have been taken to prevent corruption within the sport in recent years?
In addition to the increased investment in the Security Department outlined above, there have been a number of important integrity measures introduced in recent years, including:

• restrictions placed on the use of mobile phones by jockeys and valets
• an improved and expanded system of CCTV cameras covering racecourse stabling, with funding from the Levy Board, enabling digital filming of the stables with up to 12 cameras in the stables at each course
• introduction of rules prohibiting owners, trainers and stable staff from laying their own horses to lose
• prohibited licensed persons from passing on information for reward about horses which is not publicly available
• brought in stiffer penalties for those who hinder or mislead investigators
• access to the betting exchanges’ audit trails through memoranda of understanding
• launched a partnership with Crimestoppers [link to Crimestoppers page], to enable to people to give intelligence to us anonymously.
• Increased liaison with the police and other law enforcement agencies

What investigative powers do we lack?
The British Horseracing Authority, not being a statutory body, lacks the powers of search and seizure.

However, the Gambling Commission was introduced in 2005 with the primary purpose of regulating all forms of gambling in Great Britain and from 1st September 2007 its powers will extend to the regulation of betting and internet gambling in addition to the traditional sectors of casinos, lotteries (not the National Lottery), bingo and gaming machines. 

The Gambling Commission expects that maintaining integrity in sport is primarily an issue for sports regulators like the British Horseracing Authority, particularly when it involves licensed or registered participants who commit disciplinary offences against the sport’s own rules.  However, the Commission will have a role to play where a threat to the integrity of a sport involves betting in Great Britain and particularly when the holder of a licence issued by the Commission may be involved.

The Gambling Act provides that the Commission may provide information received by it in the exercise of its functions to certain sports regulators listed in the Act. The Commission is currently minded to impose a condition under the Act to require betting operators to share information with both the Commission and those sporting bodies. 

Racing was the first sport to have a ‘Memorandum of Understanding’ with the betting exchanges and this voluntary sharing of information between the exchanges and then the traditional bookmakers has played a significant part in the fight against corruption in racing.  These voluntary agreements, which have to meet the provisions of the Data Protection Act, will be supplemented by the proposed new statutory provisions and will further assist in identifying those who seek to corrupt horseracing.

Racing’s powers over non-licensed persons are limited. Everyone – whether licensed by the British Horseracing Authority or not - needs to take note of the following: from September this year a new offence of 'cheating' is created by the Gambling Act. Cheating is given its normal dictionary definition but essentially the new offence means that a person cheats at gambling if they actually commit or attempt to commit a  deception or interference  with the process by which gambling is conducted or with a real or virtual game, race or other event or process to which gambling relates.

Offences will be dealt with as criminal prosecutions by the Gambling Commission or the Police.  We have no power to investigate criminal offences but will continue to regulate our sport under our Rules and refer matters to the Commission where it is deemed appropriate. 

Close liaison and co-operation between the Gambling Commission and the Security Department is clearly crucial and we are engaged in a comprehensive consultation programme with the Commission on all aspects of information sharing and integrity in sports betting.