In nominating the title for this presentation – "Harnessing Cyberspace" – I was careful to be as neutral as possible. That is, I didn’t wish to place a preponderance of emphasis on either the positives (opportunities offered) or the negatives (threats posed) of the Internet in the context of harness racing.

Certainly in both the mainstream and gambling media the pros and cons of the Internet are receiving widespread coverage. For the past four years or so much of my working life has been dominated by attempts to address the broad question of whether Government and racing industry should embrace the Internet as a friend or ward it off as a foe.

What I can now say with complete confidence is that it would be a great disservice to the racing and wagering industries if they failed to embrace the aspects of the Internet which offer such enormous opportunities. On the other hand, to regard, without question, all instances of racing and wagering Internet activity as positive would be dangerously naive.

Anybody here today who also attended the 1997 Conference in Munich could be forgiven for gaining the impression that New South Wales has a "thing" about the Internet. Mr Allan Briggs, then Deputy Chairman of Harness Racing NSW, presented what was back then a somewhat pioneering paper on the potential benefits to the harness racing industry of on-line services.

To say that the Internet has grown exponentially since then in terms of its impact on the lives of people around the World is of course trite.

Australians’ fascination with the ‘Net is reflected in the fact around 45% of Australian households have a personal computer and 25% of households currently have access to the World Wide Web.


As somewhat of an independent observer, it is with great conviction that I point to the enormous benefits which continue to accrue to harness racing participants here in Australia as a result of embracing this new on-line technology.

On a very positive note I would now like to highlight some aspects of the Australian harness racing Web site,


May I emphasise two points:

To put it mildly, the growth in the usage level of this Web site has been quite extraordinary – over 1000% in some months. From the home page (Appendix B1) of the site, anyone can access a wide range of racing-related information (such as fields, form guides and stewards’ reports) for all Australian harness racing tracks. This is available free at the click of a mouse.

From the home page one can access pages relating specifically to the controlling bodies of each Australian jurisdiction. Victoria and New South Wales have led the way in the provision of on-line service to participants, with HarnessWeb (Appendix B2).

From the above site licensed trainers in New South Wales, for example, can arrange access to HarnessWeb for free. The efficiencies, convenience and timeliness of on-line communication then apply to various day-to-day functions – including nominations, scratchings, driver changes, stable returns, etc.

HarnessWeb is also accessible directly at,


A range of other value-added services also become available. These include details of which horses have been nominated so far for a particular race and available races on the calendar for a horse of a certain grade.

Breeding interests are extensively catered for as well. For example,

The Breeding and Owners Message Board also provides a vehicle for like minded harness enthusiasts to become known to each other. It is accessible through the Australian Breeding pages.

Separately from licensed persons, for an annual fee of A$69 any interested person anywhere in the world can subscribe to the HarnessWeb service.

Economies in terms of resource savings are now beginning to materialise as well. By way of example, whereas previously a staff member was required to key in information from faxed or mailed stable return information relating to horse movements, much of this data now finds its way directly into the controlling body’s computer. Also, at peak periods, telephone lines are now freed for enquiries actually requiring a human response.


In general terms I think it is fair to say that much of the attraction of the Internet lies in its power and efficiencies in two areas:

Against this background, it was not surprising that in the Internet’s infancy gambling and related spheres were identified as highly adaptable to the World Wide Web.


I would suggest that the most striking difference between punters in Australia and those in, for example, the USA is the approach to what the Americans call "handicapping" – picking winners, in other words.

Generally speaking, the demands of even the keenest Australian harness fan in terms of the sophistication of form guides are generally less than his or her US counterpart.

Nevertheless, again referring to the Australian harness racing site, (www.harness.org.au) the benefits to punters anywhere in the World are immediately obvious. For example, the site allows anybody immediate access to:

all for no more than the cost of general Web access through any Internet service provider.

In many ways free on-line services such as those above are a manifestation of the refreshing new approach to punters that anything the industry can do to arouse and maintain their interest in harness racing is for its long term benefit.

The Web site conducted by the radio station here in Sydney dedicated to racing is also a valuable source of very current information to punters. In addition to tips and scratchings it includes a free facility for listening to broadcasts of all races conducted by the TAB here in New South Wales. The Web address is www.2KY.com.au.

Following the practice of several overseas racetracks the TAB Limited (New South Wales TAB) Web site also allows punters to view a high quality photo finish image almost immediately a race has been run for many of the events on which it fields.

The USA racing Web site www.compuraceinc.com is well worth a look as an example of what will no doubt be the way of the future in terms of information services to punters. Among the site’s advanced facilities is an on-demand library of races run on major US racecourses. A fan can download video and audio copy of a race and view it on-screen. While the quality is fairly average at present there is no doubt that this is the way of the future as advances in computer and telecommunications technology realise further improvements in streaming.

I would like to think that, as more gamblers come to the realisation that it is physically impossible to beat the house over a period in games such as roulette and poker machines, the attractiveness of skill-based gambling will be enhanced by the availability of quality relevant information.


In recalling my days as a standardbred racehorse owner I tended to become so thrilled with watching my colours going around and the euphoria of winning the occasional race that the betting aspect almost disappeared into the background.

But now in the role of racing regulator, when I peruse a document such as the 1999 Annual Report of the New South Wales Harness Racing Club Limited I am quickly returned to reality. The Club will of course be hosting the Miracle Mile at Harold Park next Friday night.

In perusing the Club’s Profit and Loss Statement, a single figure leaps out from the eighteen categories of revenue – that of earnings from parimutuel wagering, particularly off-course. We are talking over 60% of gross annual revenues of $15 million.

At the risk of accusations of being alarmist I would like to point to a groundswell of opinion at various points around the globe that the threat to racing industry revenues from emerging telecommunications media such as the Internet is as great as any ever faced by the industry.

Against this background, I would suggest that this whole issue becomes one of immediate paramount importance to everybody involved in harness racing – from owners and breeders to licensed persons and racing administrators.

On a political level some of the most vocal warnings of this threat have come from Senator Jon Kyl, a Republican Senator from Arizona, USA. Appendix C is a copy of a Daily Racing Form news item covering Senator Kyl’s presentation to the University of Arizona Racing Symposium at Tucson in December last year. I refer to the lead quote from that article,

The (racing) industry’s days would be numbered if Internet gambling takes place. There are offshore outfits operating virtual casinos. It will destroy the horse racing business if given a chance.

I will allude to Senator Kyl’s legislative solution a little later. Suffice to say, however, that not everybody is in favour of his "prohibitionist" approach. For example, at the Tucson symposium, the response of Mr Stan Bergstein of Harness Tracks of America, questioning the validity of the Senator’s stance, was as passionate as any I have witnessed at a conference anywhere.

3.2.1 Migration of the wagering dollar off-course

The whole issue of Internet wagering and its current enormous significance is of course a spin-off of what is no doubt the most significant World wide wagering trend over the past two decades – the migration of betting turnover (handle) from on-course to off-course.

If the World Wide Web is anything, it is global. Hence at the risk of initially appearing self-indulgent, I will initially focus on the Australian situation before broadening the scope geographically.

For the following reasons, Australian jurisdictions represent appropriate models for examining this issue:

Below is a chart illustrating the longer-term trend here in New South Wales, for example. The pattern has been similar in many other jurisdictions where betting on racing is popular.











[nb All dollars are expressed in nominal terms (ie not adjusted for Inflation)]

Along New South Wales’ wagering time line there have been, I would suggest, some events of great significance:

  1. 1964 – the commencement of legal off-course wagering in New South Wales with the Totalizator Agency Board (TAB) commenced operations.

  2. 1988 – the commencement of full programmes of race pictures beamed off-course (to racecourses, TAB cash outlets and licensed premises) for all race meetings covered by the TAB.

  3. 1994 – the introduction of telephone betting with on-course bookmakers.

  4. 1998 – the commencement of Sky Racing on pay TV. For the first time Australians could enjoy full programmes of race pictures from their homes.

The primary purpose of establishing a legal off-course betting regime in New South Wales was to combat the flourishing illegal bookmaking industry. To illustrate the strength of the racing industry in New South Wales – and throughout Australia – in this era, on the night of the 1960 Inter Dominion Grand Final at Harold Park here in Sydney 60,000 people hung from the rafters to watch Caduceus win.

The key aspect of such huge attendance figures – from the perspective of harness racing revenue flows from wagering – was the "captive" nature of the audience. Virtually every one of those 60,000 at Harold Park that night who had a bet did so with either a licensed bookmaker or the on-course totalizator.

In many ways, the captive nature of the wagering audience essentially continued through 1988 with the first wave of the off-course release of the picture. The NSW TAB had a monopoly wagering presence with respect to anybody who attended off-course premises to view the racing picture.

Up to around 1980, there appeared to be no reason why the established on and off-course betting regimes could not happily co-exist in New South Wales. But at the beginning of the 1980’s the fixed odds bookmaker market began to waver. The worst fears of the bookmaking industry were realised in 1982/83 when, for the first time in history, legal bookmaking turnover in New South Wales actually went into decline.

As the chart shows, the rot had well and truly set in for bookmakers by 1993/94 when they were thrown the lifeline of telephone bookmaking. All eight Australian States and Territories made the decision simultaneously to permit on-course licensed bookmakers to accept bets from their clientele off-course. Stringent minimum bet levels were applied consistently across Australia to prevent excessive adverse effects on TAB turnovers. During 1998/99 around 15% of New South Wales bookmaker turnover on racing was transacted by telephone.

3.2.2 The birth of Internet wagering on racing in Australia

It was of course this decision which paved the way for Internet bookmaker betting in Australia. During 1995 the Centrebet bookmaking company in Northern Territory opened Australia’s first genuinely on-line wagering facility. Since its early days, Centrebet’s major focus has been on sports betting. In 1996 the Darwin All Sports bookmaking company (also in the Northern Territory) commenced displaying real time fixed odds on racing over its Internet site. It has subsequently commenced actually processing racing bets via the Internet.

Not to be outdone, Australian TABs in New South Wales, Western Australia and Queensland along with the New Zealand TAB have since commenced parimutuel wagering over the Internet.

Clearly, the Internet represents a tremendous opportunity for TABs (and OTBs generally) in terms of:

In the case of wagering (as against gaming) the difference in substance between placing a bet by telephone and via the Internet is, in many respects, minimal. In contrast to virtual roulette the outcome determination mechanism is not an inherent part of the vehicle by which the bettor receives details of odds on offer or communicates details of the wager.

It is, I would suggest, more than coincidence that Internet wagering on Australian racing was introduced at around the same time as the picture went into private homes.

3.2.3 Market penetration of Internet wagering on racing in Australia

Notwithstanding its relative accessibility in Australia Internet wagering on racing remains in its infancy. For example, out of total New South Wales TAB parimutuel turnover on the recent Melbourne Cup (Australia’s highest profile thoroughbred race) of around A$38 million, total turnover through the Net TAB site was $446,000 – around 1.5%.

The Australian racing industry and State Governments have to date generally exercised great caution regarding their willingness to permit licensed operators to field on racing over the Internet. And the reasons have been overwhelmingly aligned to economic policy rather than technological limitations.

It is generally agreed that demand for Internet wagering on racing is currently suppressed by limitations on the off-course dissemination of bookmaker fluctuations on racing and minimum bet levels on racing bets placed with bookmakers from off-course.

3.2.4 The nature of the threats to wagering on racing posed by the Internet

From around the early 1970’s to the early 1990’s racing in Australia enjoyed a boom period in terms of revenues derived from wagering. The phenomenal acceptance of TAB wagering by the off-course betting public saw an entire generation grow up without exposure to illegal (SP) bookmaking.

The overriding challenge of racing administrators was to encourage people to bet on their product by selling its entertainment value and promoting its integrity.

But the late 1990’s has seen all that change.

In many ways we have turned full circle. As was the case up until the 1960’s in Australia, it may once again become a major concern that, separately from the issue of encouraging punters to bet on your product, they will bet with a wagering operator from whom the industry enjoys a healthy income stream.

As something of an experiment the TAB here in New South Wales offered parimutuel wagering on the recent Breeders Cup thoroughbred meeting in Florida, USA. As an indication of the level of interest here in Australia, the win pool on the Breeders Cup was only A$5,000. This contrasts to minimum TAB win pools of around A$400,000 on Melbourne and Sydney Saturday thoroughbred meetings.

So I think it is fair to say that offshore wagering proprietors on racing will tend to offer as their key products betting on events conducted within the jurisdiction where the punters are located (as against the jurisdiction of the operator).

Hence, these wagering operators do not purport to contribute to the "primary" product – the race or contingency. They merely provide the "secondary" product – the betting facility.

3.2.5 Assessment of the threat

At the heart of the manifestation of this threat of wagering turnover leakage to on-line operators outside the jurisdiction in which the racing is being conducted is their claim that, for betting purposes, "racing is just another sport".

For example, legal sports betting – in its infancy here in Australia – is enjoying rapid growth, both in terms of turnover and the number of operators. It is now settled in virtually all sports betting regimes throughout the world (even in high level regulatory jurisdictions) that the sports themselves do not have any legal claim to a share of gambling revenues from legal gambling on their sport. Given that most sports have grown to their current levels independently of any income from gambling, this is unlikely to pose a threat to their continued existence. Some gambling operators are now attempting to extend this legal principle to racing.

That is, as sports betting operators, they have an unfettered right to bet on racing virtually free of any obligation to return anything to the racing industry. I’ll leave it to you to draw your own conclusions for your industry as to the long term consequences of any widespread proliferation of racing betting along these lines. Even within the boundaries of Australia, the two territories have seen fit to classify our three codes of racing as "sports" for wagering purposes.

The modus operandi often involves establishing in a tax free regime which itself is usually without a racing industry of any significance. Any disadvantages which might otherwise be normally associated with locating in other than a "top-level" regime are mitigated for two reasons:

Unfortunately, the Internet represents the perfect bridge between the jurisdiction of such operators and that where his or her punter market is located. And to continue the metaphor, the bridge may currently be one-lane, but indications are that if innovations such as Web TV and E-commerce develop and proliferate as anticipated, expansion to six lanes may not be far away.

As an example of a window into the future, one can point to the relocation offshore during May 1999 of the long-established English bookmaking firm Victor Chandler to the tax-friendly jurisdiction of Gibraltar. And Chandler’s will not be lonely in its new home. Last month the legendary bookmaking firm Ladbrokes launched a free phone betting service from Gibraltar for United Kingdom residents. In both cases the firms have flagged their intentions to establish on-line wagering in the very near future.

I would also suggest that racing industries in jurisdictions where parimutuel wagering is the dominant or exclusive wagering medium on racing are at relatively greater risk than those such as England or South Africa, where most of the racing betting tends to be fixed odds with bookmakers. This is so for two reasons:

In many respects New South Wales has its own parallel to the Gibraltar situation with the establishment of a large-scale wagering operations in the Pacific tax haven of Vanuatu. The Vanuatu operations specialise in offering wagering services on Australian racing to Australians

3.2.6 What responses are available?

I think it fair to say that, over time, much wagering-related legislation introduced in response to the Internet will be seated in a desire for technological neutrality. That is, what was illegal before the Internet burst on the scene should remain so. There are strong suggestions of this in the United States approach – where part of the rationale for the Kyl Bill is the degree to which the 1962 Wires Act is becoming obsolete. One of the aims of the Wires Act was to prevent cross-border telephone betting with Las Vegas sports books.

Below are two examples of legislative responses to date.

USA - Kyl bill

In 1995 Senator Kyl proposed far reaching legislation which would effectively outlaw gambling on the Internet in the USA.

Since that time, the Senator’s Internet Gambling Prohibition Act has undergone considerable modification, primarily to facilitate exemptions for various interest groups. With respect to wagering on racing, the Kyl Bill, in its latest form, would for example actually permit parimutuel betting on racing from a computer within the home in the USA. However, two main limitations are relevant:

Clearly, this would prevent racing having the sort of access to the global market considered so desirable by some of Senator Kyl’s detractors.

As at the end of October 1999, the Lower House version of the Kyl Bill had been introduced. However, several unresolved issues continue to stand in the way of it becoming law.

NSW - Unlawful Gambling Act 1998

- Racing Racing Administration Act 1998

The wagering environment in Australia differs significantly from that in the USA in that:

  • legal off-course wagering via the telephone has been legal since the early 1960’s; and

  • there has never been any hint of a prohibition against cross-border betting with Australian licensed operators.

However, with respect to the threats from offshore operators, the Government recently introduced an offence provision, section 8(3) of the Unlawful Gambling Act (Appendix D1). This section renders it illegal for a person to place a bet on an Australian race with an operator not licensed in an Australian jurisdiction.

Attempts are also being made to stem the flow of offshore wagering facilities into New South Wales via the Internet by having Internet Service Providers accept some responsibility for such product accessed through their services. The relevant legislation is section 30(3) of the Racing Administration Act (Appendix D2).

Two dominant themes have surfaced in discussions of the avenues open to Governments and racing industries to address this on-line threat.


The old saying "there’s nothing new under the sun" may seem grossly out of place in the sphere of innovative and exciting technology such as the Internet. But in the context of wagering and the Internet is it?

From the perspective of the racing industry, is there any real substantive difference between:

Or is it merely a case of the former using modern technology to "free ride" on the racing industry on which he fields – along the same lines as his 1950’s counterpart?

Action to protect the relevant racing industry from the negative effects of the 1950’s illegal operator may have been relatively simple and straightforward. In contrast, the 1999 problem at present seems complex and unwieldy in terms of how it can be addressed.

It is now widely agreed that prompt action is required to stem the flow of betting turnover to "unauthorised" wagering operators fielding on racing via media such as the Internet. Some commentators believe that if wagering by such means gains a sufficient foothold to cause a significant rupturing of the umbilical cord between wagering and those who conduct the racing the continued existence of racing as we now know it may be seriously threatened.

If ever there is going to be a situation where the different codes of racing around the globe need to work together in a coordinated and cohesive manner to address a common threat may I suggest this is it.


A Internet Sites
Harness Racing in Australia Web site - home page
refer www.harness.org.au
HarnessWeb - home page
refer http://harnessweb.harness.org.au
Harness Racing in Australia - sample of Form page
refer www.harness.org.au/formframe1.htm
Harness Racing in Australia - Fans' Forum sample
refer www.harness.org.au and click  on icon

Daily Racing Form article on Senator Kyl
from USA - article dated Friday, December 11, 1998
Article available from author or  IDHRC
(New South Wales) Unlawful Gambling Act 1998, section 8(3) - copy available from IDHRC
(New South Wales) Racing Administration Act 1998, section 30 (e)- copy available from IDHRC


Controlling bodies Harness Racing www.harness.org.au
HarnessWeb http://harnessweb.harness.org.au
TABs TAB Limited (NSW) www.nswtab.com.au
Queensland TAB www.qtab.com.au
WA TAB (WA) www.ozbet.com.au
Bookmakers SportOdds (NSW) www.sportodds.com.au
Centrebet www.centrebet.com.au
Darwin All Sports www.betthe.net
Information Radio 2KY www.2ky.com.au
CompuRace www.compuraceinc.com


back to top