The horseracing industry faces a significant challenge from unregulated illegal betting markets, which threaten the integrity of the sport while siphoning off billions of dollars in revenue. Perhaps the most notorious of those illegal operators is Citibet, an online platform that has become a significant concern for the Asian Racing Federation (ARF).
Black Market Entities Enjoy Specific Advantages
A recent report by Hong Kong-based media outlet South China Morning Post highlighted how Citibet operates mainly in southern China and is estimated to handle a gambling turnover of about $50 billion annually, rivaling legal betting markets. A recent report from the ARF’s anti-illegal betting task force revealed that Citibet’s operations were equal to roughly 25% of the legal turnover in Hong Kong horseracing.
Perhaps the most worrying aspect of Citibet’s operation is how it allows punters to bet on horses to lose, similar to legal exchange platforms. However, Citibet operates in complete secrecy, unlike these regulated offerings, refusing to share information with racing authorities. This lack of transparency creates a breeding ground for match-fixing and spot-fixing, compromising the sport’s integrity.
The reason behind this appeal of illegal operators like Citibet is that they can offer better returns to bettors since they do not have to bear the cost related to taxes and regulatory fees. Search practices undermine the financial stability of legal betting markets and deprive the sport of crucial funding that, among other things, guarantees horse welfare.
Setting Up an Illegal Bookmaker Is Easier than Ever
James Porteous, the HKJC’s senior due diligence & research manager, has been vocal in his criticism of illegal operators. According to Porteous, the proliferation of technology has made it easier than ever to become an illegal bookmaker. Aspiring operators can now access everything they need for just a few thousand dollars, enabling them to offer customers an experience not too dissimilar to high-profile regulated companies.
The illegals have zero regulatory overheads and zero concerns about reputational or ethical considerations about how they deploy technology to attract customers and boost their turnover.
James Porteous, HKJC’s senior due diligence & research manager
Making matters worse is the growing presence of cryptocurrency in the betting markets. The anonymity of cryptocurrency and the ease with which funds travel across borders have made it a favorite among illegal operators. While regulators can often contact traditional payment gateways and block payments to black-market businesses, crypto completely shuts down such measures.
As illegal operators like Citibet continue to expand their technology and reach, so too must the industry’s stakeholders increase their efforts in counteracting this growing menace, ensuring that the sport remains fair and preserving its financial health. Consumers must also take care to only engage with regulated offerings, which guarantee safety, accountability, and transparency.
