Privately owned British Internet betting firm Betfair is facing an attempt to thwart its bid for an Australian gaming licence.

Australia’s horse racing industry and Tabcorp Holdings Ltd, have called for a ban on the new style of online betting, saying it encourages fraud. Betfair accepts Australian bets through its online betting exchange. Betfair is relying on an Australian gaming licence for the go ahead to enter a 50/50 venture with Kerry Packer’s Publishing and Broadcasting Ltd.

Industry observers speculate that the campaign is the next part of an ongoing turf war between Tabcorp and Kerry Packer’s PBL.

Analysts foresee Australia’s biggest betting company Tabcorp’s earnings fall by 4% for every 5% shift in wagering turnover to Betfair/PBL. Tabcorp’s shares dipped in July when the two companies unveiled their plans. British bookmakers have already taken a dip in earnings with the advent of Online competition.

Australian Racing Board Chief Executive Andrew Harding stated: “The racing industry will leave no stone unturned to make it obvious to everyone, including state and federal governments, that betting exchanges are unacceptable in a healthy Australian racing industry.”

The Australian racing industry and Tabcorp said that Betfair’s system, where punters can act as bookmakers, fix their own odds, and even back a horse to lose, encouraged race fixing. Betfair has this month helped a UK police investigation into race fixing, scrutinizing online betting records.

Betfair, set up by a JP Morgan debt trader in 2000, only needs to secure a licence in one Australian state, with the Northern Territory favourite after already licensing online sports betting.

Australia has the fifth highest horse racing betting turnover in the world, about $10 billion a year.

Big betting chains, like Tabcorp and UNiTAB Ltd, fund racing and pay taxes to state governments. Betfair has said it also expects to contribute if it wins a licence.

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