"Recent events have drawn further attention to the new and very real threat to racing's integrity posed by betting exchanges, which have left racing more vulnerable than ever before to malpractice," he said.
"The current law, which did not envisage the creation of exchanges, is now deficient and must be tightened in the forthcoming Gambling Bill as a matter of urgency."
The BHB are racing's governing body while the Jockey Club are responsible for disciplinary matters.
Channel 4 betting guru John McCririck has admitted that racing is "much more vulnerable" as a result of opportunities to bet on horses not to win.
He said: "The dangers of anyone being able to back a horse to lose are there to see, but exchanges are here to stay and the question now is how we police them.
"Clearly, the Jockey Club's new security chief Paul Scotney must step up to the plate to find the paper trail and telephone records which would help establish whether corruption has occurred.
"It is fair to say a purging is taking place, but when it gets this serious you have to wonder how much more the sport can take."
Fallon faces a tough fight to brush off allegations that he has brought racing into disrepute.
Berry and O'Sullivan face long bans and possible criminal charges if found guilty of laying Hillside Girl to lose at Carlisle last summer, while Fox was handed a 21-day ban for the Fontwell incident aboard Ice Saint and could face further inquiries in the light of today's revelations.
Exchanges continue to insist they are exposing sharp practice as opposed to helping it flourish.
But the fact that generous odds were available about Ice Saint right up until the moment Fox parted company with the gelding could lead to a review of Betfair's lucrative "in running" markets.
William Hill spokesman David Hood feels "racing will crumble if exchanges continue to go unchecked."
He added: "People say big bookmakers always bleat about exchanges, but our business has never been healthier. However, the simple fact is that people will no longer want to bet if they feel the game isn't straight.
"I defy anyone to say racing is straighter since the advent of exchanges, and until people take their heads from the sand, the sport and industry will continue to suffer."
