UK online betting exchange Betfair has signed a deal with Australia's richest punter Kerry Packer that could shake up the country's gaming industry.
Looser gambling laws help Betfair gallop into the Aussie market
Kerry Packer's Publishing and Broadcasting Ltd (PBL) has signed a 50-50 joint venture with Betfair to develop the business down under.
The Australian government only gave the green light for internet betting exchanges to continue trading last week
Betfair hopes to become a key player in the A$2.61bn (£1.39bn) gaming market.
Kerry Packer's media, entertainment and betting empire PBL already owns Melbourne's Crown casino, and it is bidding for a second in Perth.
Betfair, by far the largest of the UK's betting exchanges, allows punters to make fixed-price bets against each other over the internet, rather than against a bookmaker or through a totalisator agency.
Bets are matched between people with opposing views, allowing Betfair to offset all its risk.
It makes its money by charging customers a commission on their winnings.
Kerry Packer is Australia's wealthiest man and a keen gambler
This type of gambling has been vehemently resisted by the Australian gaming industry, which had online casinos banned in 2001.
But now the government has refused to extend this ban to betting exchanges on the grounds that there was no evidence that they contributed to problem gambling.
Betfair co-founder Edward Wray, who lives in Australia, said the firm was keen to get a foothold in the country.
"PBL's impressive sports coverage and its unparalleled reach to the Australian public through its media outlets, coupled with our own leading wagering product, can only be good for the Australian consumer," Mr Wray said.
Kerry Packer is a famously enthusiastic punter, who has no hesitation in laying down multi-million dollar bets.
PBL needs to expand its gaming empire as its Crown casino in Melbourne faces increasing competition from Las Vegas-styled casinos in Macau.
No figures were given for the joint venture, which will be contingent on Betfair obtaining a licence to operate in Australia.
Betfair already takes bets from punters in Australia and New Zealand, but it needs a licence before it can advertise in Australia or set up an office there.
Though the Australian government has said it will not ban betting exchanges, all its six states and two territories have so far opposed issuing licenses.
The Australian operation is Betfair's second-fastest growing business outside the UK, so a physical presence in the country is vital.
Betfair has offered to pay local taxes in order to secure one.
This could help swing things in its favour, as the country earns about A$5bn (£1.94bn) a year in taxes from betting, lotteries, casinos and gaming machines.
However, existing betting operators in Australia have also been against giving out licences to betting exchanges, though competitive pressures may be force them to set up their own exchanges as a defensive move.
One domestic bookmaker UNiTAB said that if any state or territory decided to grant licences it would consider setting up its own exchange.
"As soon as there's a break in the solidarity among the states to license a betting exchange, we're there too. But we will not go first," said managing director Dick McIlwain.
Another gaming group Tabcorp saw its shares fall 2% on fears that the venture would divert revenue from traditional outlets.
A spokesman for Tabcorp said the betting exchange model was flawed because it encouraged race-fixing.