Australian sport has a serious problem. It is an exposure to fraud that is getting worse and not better and which some sources estimate is worth as much as $1 billion annually. It affects every sport from racing to cage fighting. It is the -wagering with illegal local and offshore betting agencies.
These betting agencies and bookmakers constitute an unprecedented menace to all sport. Every type, code and game is at risk. Racing, cricket, football, netball. They are all targets. 
As the illegal use of cobalt continues to shake and rattle Australian racing with the spring carnival looming, Racing Victoria will announce today strict new regulations to further limit the sport's exposure to criminal activity.
From next Tuesday it will be an offence for any licensed and registered person - including racehorse owners and industry officials - to bet on Victorian racing with betting agencies not approved by Racing Victoria.
The rule is broad. It is illegal for a person covered by the new law to have a bet (including any lay bet) placed on his or her behalf. It is also illegal to have an interest in a bet placed on Victorian racing.
The stewards have almost unlimited power. They can ask for all relevant documents and devices, including computers, mobile phones, and betting records. As well the stewards can demand access to the person's account with the illegal operator. Username, password. The lot.
The penalties can be career-ending depending on the nature of the breach. They range from fines through to suspension and disqualification. If betting agencies are to wager on Australian sports they must be registered with the sport's authorities.
There are more than 230 organisations and individual providers who are registered and approved to bet on Victorian racing for this season's racing.
The AFL is being hit hard, too. It is estimated by companies that track betting patterns that 20 per cent of money wagered on the outcome of AFL games and all other forms of exotic betting is placed with the illegal offshore operators.
The AFL's general counsel, Andrew Dillon, yesterday told The Australian: "In line with other professional sporting codes in Australia, the AFL has product fee and information sharing agreements with Australian betting agencies to ensure we have transparency regarding bets placed on our sport.
"Only by working with the agencies are we able to protect the integrity of our sport. Offshore betting by Australian punters is a real concern for sport integrity because the betting cannot be scrutinised. The best way to counter the use of offshore illegal betting by Australians is to allow Australian registered and regulated agencies the right to compete fully with the offshore agencies, and that includes by permitting in-play betting online." Victorian racing's integrity boss Dayle Brown said yesterday: "Non-approved wagering service providers, most of which are located offshore, present a significant risk to the Victorian thoroughbred racing industry.
"They pay no returns to the Victorian thoroughbred racing industry for the use of its product, nor are they complying with Racing Victoria's integrity requirements as approved wagering operators are obliged to do through information sharing and compliance," Brown said.
Tracking shows the Asian illegal betting exchange Citibet holds most racing traffic. The illegal market for sport wagering is broader, with a number of low-margin bookmakers including SBOBet and Pinnacle offering fixed odds to Australian customers in violation of domestic laws.
The police also share racing's growing concerns as more and more complaints have been lodged with punters dudded and abandoned by illegal operators. Brown said: "The level of complaints received by Racing Victoria and associated law enforcement authorities over recent months regarding non-approved wagering operators failing to pay punters monies owed has increased to a concerning level." The new rule covers all licensed and registered persons (including trainers, trainers' stable employees, bookmakers and farriers) and racehorse owners, as well as industry officials.
The exposure to criminal manipulation in all sports is considered so significant the Victorian police will soon launch a campaign to warn the public of the dangers of illegal wagering. Victorian police said industry sources anticipate the total annual value of bets placed could reach as much as $1bn.
Detective Superintendent Peter Brigham, state intelligence division, told The Australian the attraction to unregulated bookmakers can be better odds or a broader range of betting product opportunity such as in match betting. "Because they operate outside of the law, they are able to appear more competitive, making them attractive to organised criminals including match fixers," he said.
"There is an obvious link between large bets and match fixing. This can work in two ways, firstly the large bet can indicate a predetermined outcome (corrupt insider) and/or a large bet can be part of a scheme whereby players and/or officials are paid off by a corrupt outsider," Brigham said.
To wager legally on Australian sport, betting agencies must pay a fee to individual sports and then provide full disclosure of betting patterns and individuals. It generates income for the sport and a layer of defence. However, sporting codes and law enforcement face a challenge when trying to obtain betting data from unregulated bookmakers which operate outside of the law.
The unregulated bookmakers do not comply with anti money-laundering laws, tax or general business reporting, making punters vulnerable to Ponzi schemes, identity theft and credit card fraud.
Once funds are placed with unregulated offshore bookmakers, it can be impossible to recover them. Victoria Police takes these risks very seriously and established the Sporting Integrity and Intelligence Unit in 2013. Victoria Police works closely with the AFP, the National Integrity in Sports Unit and Interpol.
The unit recently obtained statements from a number of victims who made the mistake of gambling with unregulated offshore bookmakers. They reported being offered special deals to deposit money in betting accounts. Their bets were not honoured and when they tried to withdraw their money, they were unable to contact the company.Police, working closely with the AFP, the National Integrity in Sports Unit, and Interpol, will be conducting a campaign in the lead up to the Spring Racing Carnival to remind punters of the dangers of using the unregulated market.