One of the biggest threats to the Asian horse wagering market is illegal gambling, and this issue was a focus of the Asian Racing Conference held in Mumbai, India on January 26th. According to some of the data presented at this meeting, illegal betting generated USD $12.8 billion in action on the Hong Kong markets alone. The legal portion accounted for $13.8 billion.
Winfried Engelbrecht-Breges represents the Hong Kong Jockey Club as its CEO and is also chairman of the Asia Racing Association. He had plenty to say on the issue, highlighting that the industry must embrace technology instead of fighting against it, and take advantage of the same tools used by internet vendors who are threatening the very Asian horse wagering markets that they’re trying to protect.
“The illegal markets have gone from local markets to international markets. While it has always existed and will always be a threat, the major change is now the global consolidation of illegal betting on Internet platforms. The illegal operators are exploiting technology to grow their business. The astronomic scale and multi-jurisdictional character of illegal gambling is now such that it is one of the greatest challenges facing racing and other sports.
“In many countries the wagering market is in an almost constant state of flux, with changes being driven by both technology and regulation. The notion that wagering on racing is a fully mature product is a trap which must be avoided. Innovation and internationalization are key opportunities for growth.”
According to Engelbrecht-Breges, the Phillippines is the country threatening the Asian horse wagering market the most. Vendors there are able to skirt a lot of legal procedures and offer services that the Hong Kong tracks can not. That has to change, and Engelbrecht-Breges is right in saying that you can not just hope it goes away. Alternatively, you have to offer the same products and services but on a higher level. Sometimes the only way to fight fire is with fire.
The global economic climate is also having a drastic affect on the Asian horse wagering market. Most notably, casinos have altered their customer acquisition strategies to move from high rollers to the mass markets. “Casino turnover has been traditionally 80 per cent from high rollers but Macau casinos have been devastated by the economic slowdown in China and the crackdown on corruption. Revenues there are down 34 per cent, the VIP turnover by 40 per cent.” This represents a major problem for the sport of horse racing because casinos – both online and physical – will be targeting the same players that feed the horse racing industry.
The conference also took aim at the threat of daily fantasy sports, which has boomed in the United States, as it prepares for another entity to draw from an already bleeding, Asian horse wagering market.