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IN THE AUSTRALIAN COMPETITION TRIBUNAL No.ACT of2017 arrangementProposedTabcorp Holdings acquisition Limited of Tatts GroupSTATEMENT Limited OF by ANDREWTabcorp Holdings HARDING Limited way of scheme of Address:Occupation:Statement of: Secretary-GeneralAndrew1 Sports Charles Road, Happy Harding - Asian Valley Racing Hong Federation Kong Date: .2BACKGROUND4February 2017 Contents 2 RELATIONSHIPOVERVIEWINDUSTRY OF THEBETWEEN FUNDING AUSTRALIAN WAGERING RACING PROVIDERS BOARD AND RACING43 THEINTERNATIONAL EMERGENCEBOOKMAKERS RACING AND IN GROWTHAUSTRALIA INDUSTRY OF CORPORATEFUNDING MODELS 76 NATIONALRACINGINTERNATIONAL MEDIA POOLING AND RACING INTEGRATION MARKETS WITH OTHER 98 ANNEXURESVIEWS ON PROPOSED MERGER OF TABCORP AND TATTS 119 ValleyI, Andrew Hong Charles Kong,SCHEDULE Harding,say that: A Secretary-General of the Asian Racing Federation, of i Sports12 Road, Happy Filed on behalf of TelLawPrepared firm by +61GilbertTabc...Id..ngs!.m.ted(thecatLuke 292634014 Woodward + Tobin Fax +61 292634111 AddressEmail for service Sydney200LevellwoodwardtgtIaw.com.au,. Barangaroo 35, NSW Tower 2000 TwoAvenue, International Barangaroo Towers BACKGROUND 1 positions:I am currently the Secretary-General of the Asian Racing Federation.I also hold the following Executive DirectorDirector, of Racing the International Authority of Federation The Hong ofKong Horseracing Jockey Club; Authorities; Authorities;Co-SecretaryChairman ofand theGeneral Technical of the AdvisoryInternational Committee Horse Sports - International Confederation. Federation of Horseracing 32 I makewas the this Chief statement Executive in my Officer role as (CEO) Secretary-General of the Australian of theRacing Asian Board Racing (ARB) Federation. for approximately 14 4 bodies:Duringyears, frommy time the formationas CEO of of the the ARB, ARB I inalso 1998 held until the 2012. following positions in international racing Secretary-GeneralChairman of the Technical of the Asian Advisory Racing Committee Federation; - International Federation of Horseracing 5 CounselPrior toAuthorities my for role Queensland with (IFHA) the ARB, Racingand Chief I was (the Technical employed controlling Advisor for body three forIFHA. years thoroughbred as Deputy racing Chief in Executive Queensland). and 6 ThroughCommitteeMy other theseprevious (QLD), roles, rolesandI have Chairman include developed Chairman of the a Racing strong of the Industry andRacing detailed andTraining Gamblingworking Infrastructure knowledge Industry ProjectTraining of the (QLD).racing Standing and 7 withwageringexperience wagering. industries with, The and observationsboth a detailed in Australia understanding I make and in in this other of,statement countries.the racing are Theseindustry based roles onand that haveits historicexperience. given relationshipme direct 8 I have Bachelorthe following of Economics professional - University qualifications: of Queensland; BarristerBachelor ofof theLaws Supreme - University Court of of Queensland; New South Wales; and 2 OVERVIEW(d) OFBarrister THE AUSTRALIANof the High Court RACING of Australia. BOARD 9 AustralianfromThe ARB1998 was Studuntil the 2015,Book peak towhen nationalform it awas new representative merged peak body, with thebodyRacing Racing for Australia the Information Australian Limited. racingServices industry Australia for theand period the 10 including:In my capacitydeveloping as theCEO rules of the governing ARB, my thoroughbred role was to manage racing in the Australia, ARB in knowndischarging as the its Australian functions, meetings,appointment,Rules of Racing, licensing, functions which drug andincludes testing, powers rules penalties of theregarding Stipendiary for offences, the registration Stewards, and international andthe conductnaming reciprocation. ofof horses,race the welfareArinexuredeveloping of racehorses;AH-1 national is a policiescopy of theon issuescurrent such Australian as the Ruleshealth ofand Racing; safety of jockeys and the Horseracinginvolvesacting as membership the Authorities; representative of the Asianbody forRacing Australian Federation thoroughbred and the Internationalracing internationally, Federation which of industry'semergerepresenting that representative arethe ofAustralian importance during thoroughbred to the the Equine racing racing Influenzaindustry industry as Outbreak a atwhole a domestic of (for 2008); example, level, when I was mattersthe managingcopycollating of the wagering the 2014-2015 'pattern' data system,Racing to publish Australiawhich the involves Racing Fact Book; the Australia awarding Fact of Book.'black Annexuretype' to races, AH-2 these is a theactingbeing annual categorisedon behalf Australasian of asthe Group thoroughbred Conference 1, Group ofracing 2, Racing Group industry Ministers 3 and nationally, Listed and races;on including policy issues, representations such as race to researchnationalfields legislation character and development and including representations funding; biosecurity, to thequarantine, Commonwealth international Government movement on mattersof horses, of healthInformationdevelopment and safety Services of national of jockeys; Australia industry and the initiatives, National Jockeys'including Trust the establishment and the Prizemoney of Racing FLind for the 3 (i) workingcoordinate with their the racingthoroughbred events sorace as controlling to avoid clashing bodies inwith each other State similar and events.Territory This to is to RELATIONSHIPracesmaximise BETWEEN and theto maximise appeal WAGERING of the racing number PROVIDERS to the of public wagering toAND ensure opportunities RACING their attentionINDUSTRY for punters, is not FUNDING divided between 11 thoroughbred,By global standards, harness Australia and greyhound has a large racing. and successful The success racing of the industry, industry made is demonstrated up of three codes by the following:alln 2014,countries there (Anriexure were 19, 427AH-2); thoroughbred races in Australia, second only to the USA across thoroughbredandOver behind $466 million only code the was alone, USA paid andalmost out Japan in 12%prizemoney ( Annexureof the total in AH-2);Australia thoroughbred in 2014, prize in relationmoney paidto the globally Australia11,832 thoroughbreds has onethe secondof the being largest largest registered number horse breeding ofin thoroughbredthe 2014/15 industry racing horsein the year registrationsworld; (Annexure each AH-2); year, and with Australian(suchRacing as is Gai ageneral part Waterhouse) of media. the public and conversation' jockeys (such in asAustralia. Michelle For Payne) example, regularly articles appear about in trainersthe 12 dependent:ofAt thethe fundingcore ofexperience Australia'snecessary in vibrant toAustralia sustain racing andand industry othergrow countriesthe is sport. a strong demonstrates Indeed, wagering the two industry,that industries the strength which are provides ofco- the racing most 13 Wageringindustry is typicallyusually built occurs on havingin one ofa strongthree ways: wagering 'totalisator' industry. betting, 'fixed odds' betting, or wagering thebetson bettingtotalisator being exchanges.placed operator. in a pooi,'Totalisator' The withcommission the betting winning that (otherwise betsis deducted sharing known bythis theas pool parimutueltotalisator after a percentage operator betting) involvesis isknown taken all as by bookmakercontinuouslythe 'takeout andrate'. changing punter With thisagreeing,up until form betting of at betting, the closes.time the the Infinal bet contrast, dividendis placed, fixed to on be odds the paid dividend betting' out to winningtoinvolves be paid bets the out is if the marketplace.outcomepunter is ofsuccessful. events and Betting betting exchanges exchange provideoperators a marketplace typically charge for customersa transaction to betfee onfor theuse of the 4 14 theracingIn Australia totalisator occurred historically, and at onthe course race both course totalisatorbookmakers (i.e. andon respectively.course'), fixed odds although betting Originally, off-coursewere most offered bettingwagering at the on racecourse wasthoroughbred conducted by paymentcourseillegally wagering by of entitiestaxation, services, known or channel asbLit SP this any bookmakers'. was money illegal back and SP to did bookmakersthe not racing contribute industry. were to in the high community demand throughfor their theoff 15 ensurelegalExclusive off-course the retail racing licenceswagering industry were as was a granted means able to byof receive addressingstate governments a share the of challenge proceeds to the totesof from SP in bookmakers,this the wagering.1 960s to and operateHowever, to JusticeQueensland'significantdespite Commission'sregulation amount (CJC of ofReport) off-courseillegal (CJC) (off AnnexureReport course wagering on wagering AH-3)SP through Bookmaking where up the until the tote, theandCJC SP mid-1990s. Related identifiedbookmakers Criminal thatI refer continued SP Activities to bookmaking the Criminalto inconduct a Theadverselygenerated CJC Report affectingsubstantial also both referred cash the flow,community to the which following wasgenerally often effect andused on the the to Queensland financeQueensland other racing racingillegal industry industry:activities. in particular.This was * turnover,TABthe racing and as industrylicensed it is siphoned suffers bookmakers away as a directfrom are legitimate result denied of SP substantialgambling bookmaking. and amounts channelled Both the of couldamounttoresultrace-meetinginto owners
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