Winfried Engelbrecht-Bresges, CEO of the Hong Kong Jockey Club, has warned the black market will continue to grow as a result of over-regulation of bookmakers.
Engelbrecht-Bresges, who also is effectively head of the pari-mutuel World Pool, believes the threat of illegal operators is not appreciated by governments and that affordability checks in Britain have incentivized punters to seek out illicit alternatives. He also stressed the need for lawmakers to recognize betting on horse racing as a "game of skill."
In his role as chair of the International Federation of Horseracing Authorities, Engelbrecht-Bresges plans to illustrate the dangers of over-regulation through a newly formed council.
"Governments do not understand the risk of illegal gambling," he said. "There is a tendency to over-regulate onshore operators and they fail to see the risk of offshore operators.
"If you look at affordability checks, it has given bookmakers a wonderful way to close accounts of people who are successful and it has created an incentive for bettors to go somewhere where they don't have to do them.
"We have an anti-illegal gambling council in the IFHA. We will do more studies and make the point to racing jurisdictions that over-regulation of the regulated operators creates issues. If you look at how much the figures have gone down in Britain, a lot of it has gone offshore."
Racing Post analysis of official gambling statistics this week showed a more than 25% real terms decline in online betting turnover on horse racing in Britain, prompting calls for urgent action on affordability checks.
Engelbrecht-Bresges believes horse racing needs to differentiate its betting product from games of chance, and a failure to do so has resulted in the two being treated as equals when it comes to regulation.
He said: "I personally think, due to not managing the gaming industry properly, it has created a strong anti-gambling lobby. Games of skill have a much lesser risk of creating gambling addiction than chance games. Betting on horseracing is a skill game. Certain jurisdictions mix skill games and chance games, especially Britain. Horseracing needs to be repositioned as different."
He also voiced concerns at the lack of harmonization of racing rules globally, asserting that if a horse was to be demoted on race day in a World Pool race due to the jockey overusing the whip, the World Pool would be forced to void such a race for betting purposes.
"We would pay back the bets," he said. "Our global customers would not accept disqualification due to the use of the whip. I respect that jurisdictions have different views but customers wouldn't accept it.
"If you do this with customers, they can turn away forever. We have 350,000 people in our off-track betting centers and we had a horse some time ago demoted from first to fifth due to interference and we had to call the police because they were rioting. We have to respect the decisions of jurisdictions but we also have to protect our customers."
