Web 'fixing' claim threatens racing

IF you knew a horse couldn't win, if you had a piece of information which made that loss a certainty, it's a safe bet you would put your cash on the line. You couldn't lose. While City of London Police officers were staging dawn raids on 16 people suspected of conspiring to defraud, it was this simple concept which once more thrust betting exchanges into the glare of publicity.

The Internet exchanges have revolutionised the way we bet in Britain. There is no bookmaker. All wagers are placed by users who naturally have opposing views.

They can bet on an outcome, by backing a horse to win, or that it won't, by laying it to lose.

Is it wrong to bet that something will lose? Perhaps not, but for a minority of people determined to use unseemly means, it presents an opportunity to corrupt.

It was Betfair, Britain's biggest Internet exchange, which played a leading role in the police investigation which led to Wednesday's 16 arrests, including well-known jockeys Kieren Fallon and Fergal Lynch.

The champion jockey and all the others arrested were later released without charge on police bail.

Betfair said some of the evidence which led to the arrests resulted from its own sophisticated technology, which allows all bets to be tracked and transactions to be linked to customers.

It had responded after noticing "suspicious" betting patterns which it believed warranted further investigations.

But Ryedale MP John Greenway believes that just because a bet can be tracked, it doesn't mean punters are protected.

He fears that unless new rules are brought in to to regulate and license betting exchanges, the future of the Sport of Kings could be in peril.

Mr Greenway spent a year chairing the scrutiny panel which studied the draft of a new Gambling Bill, and while his committee recommended that exchanges be brought into line with conventional bookmakers - taxed and regulated - he said he was amazed the Government declined to take that advice.

"Betting exchanges are here to stay," he says. "But the Government must think about legislating them and those who use them to lay bets.

"The people who lay bets on the exchanges are the modern equivalent of the guy who used to be the bookies' runner.

"The Government accepts that people who lay bets professionally should have a bookmakers' licence but it is not prepared to force the exchanges to introduce the system."

So what is at stake?

Mr Greenway fears the whole future of racing depends on the regulation of the exchanges.

"I have got two big concerns," he says. "The first is about the future of racing. Obviously there is the issue that people could think racing is fixed.

"However, racing also depends on the income derived from gambling and gambling on the exchanges is not contributing a fair return to the industry in the way that betting shops and the Tote do.

"There is also the question of integrity. The exchanges allow people to bet that a horse will lose. Why should you want to do that? It's because you have information that the horse won't win. Otherwise you would have to lay all the other horses in the race as well."

Only by licence and regulation, with exchanges forced to be accountable to a new Gambling Commission, can punters feel assured they are not been taken for a ride, says Mr Greenway.

Betfair, on the other hand, has no interest in being man-handled by the Government.

It says it operates its own self-regulation and has a pact with the Jockey Club, the organisation that governs British racing, to pass on any details of possible irregularities.

A Betfair spokeswoman says: "Betfair has long maintained that the transparency of its exchange model, with the audit trail it provides, is a tremendously powerful weapon in helping the authorities to keep sport clean.

"The capability and use of tracking every mouse click is an important asset for investigations of this nature."

Mr Greenway says this is not enough.

"Yes, Betfair has cooperated (with the City of London Police investigation) and it deserves a lot of credit for that, but if there were 80 races where there was some kind of suggestion of malpractice then punters have lost a lot of money as a result. This is what they are failing to recognise.

"It is to protect the punters that the Government has to step in and deal with this. The Gambling Commission will have a statutory duty to protect the consumer; how can you do that unless those people who operate on the site as professional bookmakers are regulated in the same way as those in the High Street?"

Mr Greenway isn't the only person who believes the betting exchanges need to be brought into line.

Top bookmakers, motivated perhaps as much by the success of the exchanges as the protection of punters, have not been shy in voicing their concerns.

In May this year, the boss of Ladbrokes, Chris Bell, revealed in a television documentary about betting exchanges as business models that he believed "one race a day in British racing is fixed".

The comments were interpreted as an escalation of the growing war between traditional bookmakers and the Internet exchanges.

A spokesman for Totesport, which runs seven shops in York, said it was all about customer choice, but added that everyone should have a level playing field when laying bets.

"We have no problems with betting exchanges. However, there is a strong argument that the tax benefits of betting exchanges favour illegal bookmakers and professional punters and ought to be adjusted to offer a level playing field to bookmakers, exchanges and customers alike."

So what can be done? Is the sport to be dogged with rumours of race fixing and will the pictures of dawn raids become the norm?

Mr Greenway says regulation would solve many of the problems. "With regulation, people could see they are dealing with a person of integrity.

"At the moment, when you place a bet the person at the other end is completely faceless.

"Regulation could change that.

"What events have shown us this week is the public want to see something is being done."

Updated: 09:30 Friday, September 03, 2004