The 40th Asian Racing Conference has been told technology advances and an unprecedented customer migration to illegal gambling operations connected to organised crime are a growing threat to international sports, including horse racing.

Speaking at a session titled Integrity: Tackling New-Age Threats, Mr James Porteous, Hong Kong Jockey Club Senior Manager, Due Diligence and Research, said: “Technology means that it is easier than ever to become an illegal bettor. The customer recruitment commissions for illegal betting agents are now so potentially lucrative that they are massively incentivised financially to exploit every technological platform.

“Illegal betting is a pillar of which these organised crime groups depend on funding. The Asian Racing Federation (ARF) was one of the first to highlight how the exact same organised crime groups in illegal betting are also behind the global epidemic of cyber fraud.

“Through COVID we saw a surge in illegal betting and now, in 2024, it’s clear that the surge in illegal betting was not temporary – that has been sustained. Unlicensed illegal betting platforms, which are highly competitive on price and product, have massively expanded through technology.”

Mr Porteous said illegal operators have the ability to recruit customers via online platforms, chat channels and livestreams by rewarding influencers financially to market their product.

“The illegals have zero regulatory overhead and zero concerns about reputational or ethical considerations about how they deploy technology to markets and consumers to attract customers and to boost their turnover. The theme over the last two years has been that technology has turbocharged illegal betting,” he said.

Chairing the session, Mr Martin Purbrick, Chairperson, ARF Council on Anti-Illegal Betting and Related Financial Crime, said: “Integrity is a key word in horse racing and it is fundamental to the success of horse racing, and fundamental to any sport – if you don’t have integrity then the public doesn’t believe in the integrity of the sport and public confidence will drop.

“This migration of customers from betting on legal licensed markets into illegal markets, and then the complete loss of financial contribution from these operators to racing. It doesn’t just affect the legal betting operators, but also the funding of racing as well.”

Mr Tom Chignell, Hong Kong Jockey Club Executive Manager, Racing Integrity and Betting Analysis, said: “One of the largest threats is that the illegal market becomes normalised for the average racing punter. We’re talking about the recreational market, we’re not looking at the high-end professional syndicate, who is dedicated to maximising their profit.

“There are a number of key factors driving this movement from the regulated market to the illegal market or stopping betting on racing all together. The illegal market is growing far greater in jurisdictions where there is the demand but not the supply, and supply is under threat by greater regulations and costs.”

Extreme changes in odds were identified as a major challenge globally to parimutuel wagering by Mr Michael Fitzsimons, The Hong Kong Jockey Club’s Executive Director, Wagering Products, during a session titled ‘Betting: How Innovation Is Changing The Future’, which heard how World Pool continues to play a critical role in the viability and sustainability of racing around the world.

Describing the drastic, late shortening of odds as the “Achilles’ heel of parimutuel wagering”, Mr Fitzsimons outlined a host of planned innovations to expand the highly successful World Pool operation.

Mr Fitzsimons said the shortening of odds immediately before the start, and often after the races start, was racing’s “perception challenge” and a “terrible customer experience”, suggesting officials should collaborate with professional gamblers to address the issue.

Mr Fitzsimons explained the late odds fluctuations often stem from computer operators using technology to place wagers as late as possible.

“We believe professionals are welcome and necessary in the pool and in Hong Kong we have developed a lot of expertise in managing them professionally and sustainably for everyone,” Mr Fitzsimons said.

“For the first time, we are proposing this year to work on the World Pool professional hubs, where we come together with operators to agree the rules and through our smart contracts technology, we will enforce these rules no matter where the professional enters the pool.”

Mr Fitzsimons said new technology has reduced the time between online bet placements and odds updates by 45% and said: “We won’t rest until we have this down to mere seconds”.

Mr Nick Smith, Director of Racing and Public Affairs, Ascot Racecourse, told the Conference the launch of World Pool at Royal Ascot in 2019 was “and remains the most significant innovation in pool betting since the inception of pool betting.

“It was an immediate success with turnover increasing by more than 400% and the expansion of the World Pool since then has been breathtaking, quite frankly,” Mr Smith said.

The ARC continues on Friday (30 August) with sessions on equine safety, breeding challenges and opportunities, a keynote speech from Mr Masayuki Goto, Vice-Chairman, Asian Racing Federation and Executive Advisor, Japan Racing Association and participant wellbeing and inclusivity.