Tuesday, 30 March 2010


It was interesting to see that an IPSOS Reid survey published yesterday showed that 63% of Americans believe that internet gambling is legal in the States (compared with 59% two years ago).

Even bearing in mind that 40% of Americans believe in the factual truth of the story of Noah's Ark, that's a big number. And it tells you something about the difficulty of outlawing an activity that Joe Shmo thinks is a perfectly acceptable use of his leisure time.

There isn't any question about the legality of internet gambling in the US, and to our mind, there never has been. The fact that there's so much of it going on that everyone thinks it's legal tells you how ineffective the prohibition is. Even the immigration officer who saw me through Los Angeles airport on Sunday night responded to my answer of 'internet gambling' (to the question, "what business are you in?") with the words, "there's a lot of that these days, isn't there".

My 36 hours in California were spent at TVG, the horseracing channel that we bought in January last year, now run by our Director of Horseracing, Stephen Burn. It was the first time I had visited, and I was impressed by the people I met and excited by what I saw. The offices themselves are a bit tired, but they reminded me a great deal of parts of Television Centre, which in turn brought back some happy memories.

The horseracing industry in the US is mirroring that in much of the world inasmuch as it is casting around for an identity in the modern age of wagering. But - thanks largely to the efforts of Greg Nichols, the former BHB CEO who joined us about four years ago now - there are plenty who are willing to hear our thoughts on how, with proper marketing through our TV channel and attractive wagering propositions through our pari-mutuel business, we can help them stop the recent rot and grow the overall cake.

It makes for exciting times.

Sunday, 28 March 2010


Over the last few months, when I have talked to people about my on-going bemusement about the arguments that continue to rage in the racing industry about what I consider to be non-existent issues based on lack of understanding about the mechanics of our business, the reply I have most-commonly received is that people don't think that racing is, as I keep saying, cutting off its nose to spite its face.

There is, people tell me, little evidence that, as it pursues its quest to get more money out of Betfair, the racing industry worldwide is merely giving up money on a promise to nothing. Two in the bush, in other words, is worth more than a bird in the hand. And my continued references to this ten-year battle are, I am told, a waste of time, since racing might as well fight us for more cash even if it is unlikely to get it, particularly as it isn't losing out on anything in the interim.

And then this week, there's Punchestown.

Need more be said?

Well, perhaps one thing.

In case anyone should think this is an isolated incident, I could also point to an identical situation Down Under earlier this year, when our proposed (and agreed) sponsorship of the Magic Millions sales was killed off because we were the backer, and in the end went ahead without a sponsor.

Or the offer to a major British racecourse to become title sponsor of a three-day meeting at a cost north of £750,000, which was agreed by its commercial manager but was rejected by its Board with a "thanks, but no thanks. We think you're bad for racing."

Or, indeed, the offer we made to the BHA three years ago of £250,000 a year to put on races which had been abandoned because of bad weather. Our only condition at the time was that the re-arranged fixture should not be set for a day when there were already five meetings.

The response on that occasion? Again, "thanks, but no thanks. We think you don't pay the right levy, and until you do, we won't accept anything from you."

Fair enough. I guess we can spend it somewhere else.

Saturday, 27 March 2010

Zebras and pelicans

I've had a very interesting couple of days talking strategy with the rest of Betfair's Executive Board, discussing a number of things from French legislation (which will achieve exactly the opposite of what it purportedly aims to do), through budgets and product prioritisation, to how business is going in various different territories. We covered a lot of ground.

One of the things that came up during the meetings revolved around the change from being a start-up to being a bigger company, ten years on.

It made me wonder how many of the things that annoy us all in life today are the result of us having done things quickly or without sufficient thought in earlier times, such that eventually someone put in a rule to make sure that on future occasions, we covered every base.

There are lots of things which make sense in certain circumstances, but which, if applied in every single situation, serve only to drive us all nuts. In an everyday context, what we know today as Elfan Safety crept us on us incrementally because we couldn't be bothered to cover our bases on the occasions where it would have made a difference to do so.

This came up in the context of how difficult it is to get things done quickly in a big office if people are permanently made to jump through hoops. For example, you might get slowed down on a project by being forced to consider every single global issue, even if you're producing something that is specific to one geographic area. But because you once forgot to consider the global picture at a time when you were launching something world-wide, someone put in a process which now requires you to consider the complete check-list every single time you do a job.

I thought that the obvious parallel was the demise of the zebra crossing.

Today, you can't drive 200 yards in town without hitting a traffic light. Half the time, the traffic lights as for pedestrians; and often, they go red when there's no pedestrian there. At 2am, you find yourself stopping at a light which has gone red to allow someone to cross.

What seems like way back when, we didn't have any traffic lights purely for pedestrians: instead, we had zebra crossings. When you drove past at 2am and there wasn't anyone there, you didn't have to wait.

The trouble is, of course, that as life got busier, people who went past at 2pm, when there wassomeone there, didn't bother to stop. Because, increasingly, we didn't 'do the right thing' of extending a common courtesy, the choice got taken out of our hands; and, bingo, we had pelican crossings everywhere you look.

The question is, in a business context, once you've got pelican crossings all over the place to slow you down every day because you forgot to do the right thing in the first place and had process foisted on you, how do you get back to the time when you had zebras everywhere?

Anyone who has any interesting thoughts on how it can be done effectively, drop me an e-mail!

British Press Awards

I haven't had time since Tuesday to blog about an excellent evening spent courtesy of Finsbury PR at the British Press Awards.

I sat between the Daily Telegraph's Business Editor, Richard Fletcher, who I hadn't seen since he covered Betfair in around 2004; and Finsbury's very own Jim Murgatroyd, who I first had the pleasure of meeting at the inaugural match of the IPL two years ago.

For most, the highlight of an evening which unsurprisingly saw the Daily Telegraph sweep the boards as a result of their expenses scandal story was a welcome speech by Boris Johnson, in which he congratulated the press for having vanquished the political class; and suggested that as victors, they ought now to reveal all their own expenses with the same openness that they had championed. He was very entertaining.

But for me, the naming of Iain Dey of the Sunday Times as Business and Finance Journalist of the Year was particularly memorable. Iain was one of the first journalists to fish me out for a coffee to talk about Betfair, way back in around 2001 when he was at Scotland on Sunday.

I'm not sure he looks any older than he did then; but he's clearly become significantly more important... Good job I agreed to go!

Friday, 26 March 2010

The wonderful thing about Digger

I was amused to read in Owen Gibson's Digger column in the Guardian this morning that what I have previously written about sports levies has 'got some sports governing bodies in a twist'.

I am guessing that by 'some sports governing bodies', Owen actually means Tim Payton, who is now at the ECB but who used to work as a lobbyist, and worked with us on behalf of the sports as we tried to secure agreement between us. I would think that the NGBs themselves have better things to do than care what my view of the world might be.

Whoever it means, though, the implication is that I've told porkies. 'Both things cannot be true' apparently - the both things being my version that 'we wouldn't put money into a trust [for sport] only to have a sports levy imposed at the behest of NGBs a short time afterwards', and, separately, the existence of a 'draft contract' which shows 'a clause that says that any payment will simply go towards any requirement for a statutory levy if one is introduced'. In fact, both things can be true, and it isn't difficult to explain how.

The 'draft contract' in question was a voluntary agreement which had been worked on for two years, by which Betfair was going to pay 3% (if I remember rightly; I think the figure started at 2.5% and went up, but it may have been the other way around) of the revenues gained on a particular sport to the sport in question.

It wasn't our preferred route, because, as I have mentioned before (in a piece in the Guardian, in fact!) we think it is wrong to be prescriptive about where the money is made, on the grounds that once you start to be so, you have to be properly so. You can't say "it's football's money" when actually you mean, "it's Manchester United's".

But it was as good as we could manage at the time, in the absence of a better idea.

So, yes, we had a draft agreement (although I would hesitate to call it a contract: the whole point was that it was a voluntary deal). And yes, we had agreed the level of contributions.

But the draft agreement in question was not the first draft agreement: it had, after all, taken two years to get to this point - an astonishingly long time when you consider that we were offering to give money on a voluntary basis. And the reason why it as taking so long was the sports' insistence that the deal needed to be linked to integrity (although, again, I would hazard a guess that 'the sports' here actually again means Tim's insistence: I don't believe that the sports had much involvement other than saying to Tim, "we believe your pitch that you can get us money; please go out there and do it," which is fair enough).

The result of the insistence, whoever's it was, was that the first draft of the agreement that reached my desk actually started with the words, "Because we accept that we cause an integrity problem for the sports, we (Betfair) have agreed to pay 3% of sporting revenues to the sports in question," the implication being that it was a direct payment to clear up our own mess.

It may not surprise you to know I wouldn't be keen on an agreement like that. Apart from the fact that I don't believe it, the fact is that if we'd signed it, it would have achieved exactly the opposite of what it was intended to do. Every monopoly in Europe would have stood up and said, "they even accept themselves that they cause an issue with sports' integrity: our argument for maintaining monopoly systems of betting in Europe is absolutely justified."

In contrast, a major driver for us signing the deal was that we wanted to knock down the other argument against us in Europe: that we couldn't work with sport. So, adding an integrity element to a voluntary agreement would have meant that we signed something that did exactly the opposite of what was intended.

For what felt a long time, Tim argued this point: he wanted to link it to integrity, for reasons which I never understood explicitly. My guess would be that he felt that it gave him a greater chance of using the fledgling agreement with Betfair as an argument for getting government to require something similar of everyone else in the industry, but that is, as I say, just a guess. It makes sense, though: he'd been given a job, and it would not have been easy to get a government to broaden out a voluntary gentlemen's agreement to a company's competitors; but it would have been reasonably simple to do it if it was based on an acknowledgement by the first signatory that there was a solid reason for the deal which could be tied to everyone else as well.

Again, though, the conjecture is probably not important. Eventually, Tim relented, and came back with a draft agreement which was, as we had intended originally, just short and to the point: "we want to give you money. This is how much. And by the way, if it becomes compulsory to make a payment, then this payment will fall away." This is the draft 'contract' which is referred to in Digger.

However, the same week that this agreement was finalised, I had a call from Richard Caborn asking me if I would go and have lunch with him and Chris Bell of Ladbrokes which I wrote about back in January. It was at that lunch that Chris Bell mooted the 'better idea' we had been looking for: not a draft agreement on the lines of what we had (where Betfair was out on a limb), but a Grass Roots Trust (GRT) for sport, funded by as many within the industry was we could get on board (and starting with Ladbrokes and Betfair together). I much preferred this idea (not least because it would result in a bigger fund of money), and I called Tim accordingly. I said that we thought we would get the GRT done, and I didn't want to sign our draft agreement if we were going to do so.

At the time (it was October) I also told him that if we had not got the GRT done by Christmas, I would revert to the agreement we had drafted. I blatantly went back on that, such that, sadly, we ended up getting neither done. You could argue that in this, I was at fault. But the reason for my doing so was that I was subsequently led to believe that Tim was actively lobbying against the GRT. Indeed, I came out of a government meeting one day in which I had been told that Tim's opposition to the GRT on behalf of the sports was one of the sticking points to progressing it, only to pick up the phone to Tim asking me 'how you're going with your Grass Roots Trust idea'. Again, fair enough: the GRT wasn't what he'd been tasked with securing or had promised. I guess it isn't called politics for nothing.

If Gerry Sutcliffe has written to the sports expressing disappointment that his plan for a voluntary levy through Sport England "has not been taken up by the gambling industry", he should know that I share that disappointment; and although I haven't spoken to him about it, I suspect that so does Chris Bell.

But the only two differences between Gerry's plan and the GRT plan we presented was that ours laid out the two things which we believed would be needed to get the rest of the industry on board: that our mooted fund should not be run by Sport England, but through a separate Trust run at arm's length from the gambling industry, so that the money didn't get lost in a big hole and it could be made clear that the industry was supporting specific projects; and that it should be accompanied by a clear statement to NGBs that the threat of a statutory levy is removed - the condition that is questioned today by the sports bodies through the Digger column.

As it happened, neither condition was forthcoming. It seems to me that neither is onerous, and I would hope that if we actually got them both, the idea could be resurrected.

But in their absence, in the interim, a few industry players have got together and have struck a separate deal of our own with the Players' Federation instead.

Thursday, 25 March 2010

Memory Lane

I've been stuck in a combination of Board and strategy meetings for the last couple of days, and have another all-dayer tomorrow, so time for serious postings has been thin on the ground. But I found a moment to look at a blog posting which really brings back the memories, which I got sent by a Google Alert which picks up anything to do with my father.

Prompted by the death of Harry Carpenter - top man that he was - the blog has pulled together some nostalgic clips of sports programmes from the 70s and 80s, and I thought it was fabulous.

Strangely, the most nostalgic for me was not one of the BBC programmes, but the theme tune to ITV's The Big Match. For obvious reasons, it was obligatory Sunday watching in our household, and we had a ritualistic dance at the end of it which basically comprised my sister and me, aged about 8 and 6, charging at dad and being thrown up in the air. Happy days.

Tuesday, 23 March 2010


I was disappointed to hear the news that Ian Watmore has resigned as CEO of the FA.

I had a coffee with him about 8 weeks or so ago, to talk about how the betting industry and the big sports could understand each other better. I found him pragmatic, receptive, and likeable. Admittedly, it helped that, as a mathematician and technologist, he understood Betfair immediately and saw through the arguments against us.

That aside, though, in my view it says little for the structures of our sports that people are hired to do a defined job and feel that they can't because of the system.

It's not an issue limited to football. Our sport is littered with organisations which seem to overlap just enough to make it impossible to get anything done. Sports politics is worse than the real thing.

So, who to succeed him?

Well I had thought until yesterday that Nic Coward must be dusting down his cv with a view to heading off to ITV to join up with Adam Crozier, but I would imagine that this latest news might make him think again.

Whether anyone would relish the role now, though, after Watmore has made it so abundantly clear that you can't pursue the mandate you're given, is anyone's guess.

Monday, 22 March 2010


As bookmakers reflect on a successful Cheltenham, I have been left wondering about the logic of racing's accounting year being so weighted towards a short-term view of the world.

Consider these two bookmaker quotes.

First, from Ladbrokes:

[The Gold Cup] was a result beyond our wildest dreams. The cheers for Imperial Commander came from the bookies and we roared him up the Cheltenham hill. The gamble on Kauto Star was colossal. Had he won we’d have handed back all the cash we made earlier in the week. Getting the big two beaten was nothing short of superb."

And this from William Hill: "This will go down in history as the worst set of results Cheltenham punters have experienced."

One can imagine that a similar sentiment was felt by the hierarchy in racing. In simple terms, the estimated £60million that the bookmaking industry won will result in a £12million levy differential compared with had the industry lost a comparable amount.

Of course, it works both ways. In 2003, when 10 out of 20 favourites ran in, the opposite was true: the bookmakers took a bath, and the levy fell by a commensurate amount - the loss to the betting industry being doubled up in levy terms, because it would have been offset against previous, levy-generating, gains. With two weeks left til the end of the accounting period, the figures never recovered.

This year, the fact that 10% of the £60million will come to racing will doubtless be seen as a good thing. But I'm a bit sceptical, myself, about racing rejoicing that its biggest set of customers should have suffered four days of pain. If the same thing happened consistently over a five-year period, sensible punters would start to spurn Cheltenham as 'impossible', 'a lottery', a 'punters' graveyard' - and would bet on something that gave them more of a chance. The long-term impact on the sport could be disastrous in that scenario.

The fact is that the fastest way to turn a customer away from the game - any game - is to leave him feeling that he never had a fair go. Casinos know this very well, and are all about recycling funds and making sure the customers get a good run - the very reason that slot machines pay out more than they are required to do by statute. It's about the lifetime value of the customer, and not about how quickly you can bleed someone dry.

I remember watching a race not so long ago where the short-priced favourite was beaten, and two of racing's most senior figures, who were standing next to me, high-fived each other at the benefit that would bring the levy. But where the traditional bookmaking industry can delight in its adversarial relationship with its customers (because it knows that those customers will keep betting with them, and will simply find themselves a new product to turn their luck), Racing has no such luxury: if punters decide they lose money too quickly when they bet on the horses, they'll punt on something where they think there is more representative form on which to base an opinion. Like football, perhaps.

So, while I wouldn't begrudge Racing a wry smile that this is a good year and not a lean one, I do wonder whether it would not make more sense for the sport to move the end of its accounting year so that the biggest week of punting doesn't come right at the end of it. A bad week for punters at Cheltenham might be good for the sport as a one-off; but in terms of lifetime value, it doesn't serve for Racing to rejoice in its customers' misfortune, and doing so over a period could have serious implications which are not immediately apparent when this year's levy figures are announced.

Bottom Line, Radio 4

The Bottom Line went out over the weekend. I ended up recording it for Betfair because David Yu was ill and couldn't make it. The programme covered regulation and competition, and had the Chief Executive of Wimpey and the European head of Diageo as guests.

Other than me somehow contriving to describe Bwin as a betting exchange rather than a betting company, the programme is interesting for me to see how they edited it, from the point of view that they have cut out anything that they consider to be advertising for your company. With so much that is positive to say about Betfair and the extent to which it offers something ground-breaking for the consumer, that means they need to take out quite a lot! They recorded an hour, and the programme lasts less than half of that.

One line which I am interested to see that they cut was that I described Betfair as the natural successor to Virgin in the 1980s and Dyson in the 1990s, given that it is the most successful, ground-breaking British company of the 2000s. They've literally lifted that line and left in the two either side of it, 19 minutes and 56 seconds in!

If you're interested in the programme, you can see it on iPlayer here.

Wednesday, 17 March 2010

The Bottom Line is: you can bet to lose!

I recorded The Bottom Line, Evan Davis's Radio 4 programme, this morning; and among the questions he (inevitably) asked was the old 'betting to lose' chestnut.

I was interested to learn later this afternoon, therefore, that Ladbrokes (who long ago stopped pursuing us, at least publicly, with spurious arguments) have formally thrown in the towel on that particular red-herring as well. They are offering prices on horses not to win at this year's Cheltenham Festival.


The latest barmy action by a government as regards internet gambling has seen Estonia step up to the plate. As reported in Gambling Compliance today, the government there has instructed internet service providers to block access to "175 unlicensed internet gambling sites". Among the list are the brand names that you would know and recognise, other than that, by some quirk of fate, Paddy Power and bet365 have not fallen victim - yet.

The Durieux report commissioned by the French government estimated that there are 5,000 internet gambling websites out there. I wonder what Estonia plans to do about the other 4,825?

Surely it mist be abundantly clear to anyone with a brain that by definition, the sites that Estonia will name as the ones to block are the ones which are most likely to be licensed elsewhere, because otherwise the chances of Estonia ever having heard of them would be pretty slim.

Why is there any need for 5,000 sites to exist, other than because idiotic governments ban sites which consumers want to access, and encourage other people to set up sites to take advantage of the fact that those consumers are looking for a site which no Civil Servant has chanced upon?

So little thought is put into what the aim is that when Italy went down the same route, they temporarily blocked a chemical company's website, because they just assumed (and didn't check) that Gala Coral's website would be coral.com.

It should be funny. But it isn't.

Tuesday, 16 March 2010


A complete aside from the usual, but it tickled me to see this from my old Cambridge supervisor Christopher Andrew's history of MI5, The Defence of the Realm:

The Cambridge Five were recruited by Arnold Deutsch, a Czech "illegal" working for Moscow Centre. Deutsch was able to enter the UK thanks to his cousin, Oscar Deutsch, vouching for his good character. Oscar was the millionaire owner of the Odeon cinema chain. ODEON stands for "Oscar Deutsch Entertains Our Nation."

You never knew that, did you?

Radio 4

This programme by the BBC's Chris Ledgard is well worth a listen if you have a spare half hour. I found it interesting to hear that even thirty years ago, people were saying that the betting shop was doomed. Plus ca change. Same issues, new set of whipping boys. :-)

Good luck for Cheltenham, everyone!

Fifty years ago, a young fellow entering the bookmakers would place his virgin bet on a horse. These days, an 18-year-old's first flutter is more likely to be on the football or even the winner of The X Factor. And while you can view hours of the beautiful game without ever hearing mention of the word "odds", it's impossible to watch a horse race without constant references to betting. Racing enthusiast and broadcaster Chris Ledgard asks if the people behind the sport of kings have lost the plot and what they can do to turn young people into punters. On a freezing night at Kempton Park racecourse he meets the man charged with changing the sport's image - but the struggling horse owners think there's not a Burlington Bertie's chance of this happening.”

Another planet

According to a survey published today, apparently two thirds of people in the United States think that online gambling should be illegal.

40% of people in the US also believe in creationism.

Weird place, the USA.

Monday, 15 March 2010

Dear Andrew Lyman

Dear Andrew

I thought it only polite to reply more fully to your open letter to me in Sunday's Racing Post. You asked me so many questions and made so many points which warranted a full and proper response that it unfortunately takes far too many words for the paper to be able to give me the space to do your letter justice.

May I first though just make one clarification, about the basis on which your letter was written?

When I say I'd like racing to move on from this ten-year debate (and when Betfair places adverts calling for that), that isn't actually the same as saying that we want William Hill to move on.

I can see the confusion given your recent close relationship with the BHA, but our advert was addressed to British Racing, and it is specifically British Racing that we'd like to move on because we believe it is chasing shadows and losing valuable time when it has other things which it needs to worry about.

But as far as I'm concerned, William Hill, as a competitor, can run around chasing as many shadows and wasting as much of its time as it wants. I'd even say, be my guest on that one. As I've commented before, William Hill's pursuit of this particular topic has done us a world of favours. Please don't be under any false impressions about that.

Second... I think it's only fair not to dwell at length of the ironies of your letter, but, equally, it would be perverse to leave them aside completely:
  • the call for transparency, from a company which I can never dis-associate in my own mind from that iconic image of your chairman John Brown waving away the media from his front door, claiming that data protection and client privilege meant that it would be wrong to reveal any of the betting patterns behind Man Mood;
  • your asking me questions about volume, when that same chairman, in 2001, was the very person who drove through (and hailed) the arrival of the Gross Profits Tax system which rendered volume completely irrelevant;
  • your call for the Gambling Commission to be able to get more information from us, when until recently you worked at the Gambling Commission and will therefore know how much more information you were able to get out of us than you were from your now employer.
But as I say, let's not dwell on any of that: it speaks for itself.

Let me instead address each of your questions and comments directly.

I'm glad you like "our line about being a bookmaker and not a betting exchange".

You'll obviously agree with me on the facts that prior to the Gambling Act 2005, we were licensed as a bookmaker just like William Hill, and that since that category was removed (with the introduction of the Act) we are both licensed as betting operators. Where we differ is that I accept that things move on: your employer seems to be stuck with the idea that a bookmaker has to take risk, just because in the past, it was essential to being able to run a business; and your employer doesn't like the fact that we can manage our risk perfectly, now that technology exists which allows us to do so.

To be honest, I find this curious. It wasn't an awfully long time ago that William Hill was hailing its 'Electronic Point of Sale' software, which allows more effective risk management, as the reason why it had opened up clear blue water over Ladbrokes, which had eschewed the technology. Did William Hill become less of a bookmaker the day it started to use that?

Personally, I don't believe so. Words do shift in meaning, and industries evolve. William Hill today might still be a bookmaker, but it is a world away from the William Hill of fifty years ago, I am sure you will agree. That bookmakers previously took much more risk than they do now (when, to use William Hill's own words, they take "trading decisions") is just a function of that changing world.

A bookmaker today, whether it's us or you, facilitates the placing of bets for customers by looking at supply and demand and deciding when it wants to take risk (which we do on our multiples, and you do on most bets if you feel confident enough) and when it doesn't (which we don't on our singles, because we have the technology which allows us to service customer demand despite the fact that we are offsetting the bet; and you don't if you don't feel like it). Our trading decision is therefore different from yours by degree and by its level of consistency; but not by its basic mechanism or analysis.

Off-setting 99% of our singles risk instead of 100% of it wouldn't make us a bigger bookmaker; and on the days when you might, by chance, find your book is perfectly balanced, you don't suddenly turn into a betting exchange, even though, as we do, you would have offset your supply with your demand.

Moving to your second point: our revenues do continue to grow, you are right. And you also may be right that we are taking some of your horseracing business. This tells me that customers like our product, and long may that continue. We do our best to listen to them to make sure that we have the best all-round product in terms of value. If the day comes when we get that wrong or someone does it better, they will go and bet with someone who offers them a better package. I hope we don't bleat about it if it happens, because it will be our own fault.

I suspect you are also right, to your third point, that only a small part of the fall in GPT and levy receipts falling is due to off-shoring. I suspect a lot more of it is due to new products like FOBTs and virtual racing. What do 'the facts' you mention show about that?

British racing's loss of market share is a very real issue for it: it has gone from being 80% of our business to about 22% of it in less than ten years. This is precisely why I think racing needs to move onto a topic of relevance, and why I continue to call for that to happen. It has very real issues to address, and in my view, having customers move from a high-margin competitor to a low-margin one is not one of them. That should be no more relevant to it (or to the Treasury) than it should be to an airline regulator (or the Treasury) that airline passengers book with Easyjet rather than with British Airways. Yes, that's an issue for British Airways, just as our lower margin is an issue for William Hill. But any organisation or government department dependent in part on the profits of an industry as a whole (bookmaking, airline, or anything else) shouldn't give a fig whether the customer is being offered better value by one operator than by another. If it does, then it's looking at the wrong metrics.

Next: I'm surprised you ask how expensive our advert was in the Racing Post. Your company is one of their biggest advertisers, so I would have expected that you would know how much it costs. For the record, it cost us £7,000. Am I right in suspecting that if we did more advertising with them, we would get much better rates?

Moving on, you say that we'll always be polarised until we open our books to independent scrutiny, but you appear to have forgotten that we have already, on multiple occasions, on two sides of the world. In principle, we have no concern about doing so again if any of Treasury, HMRC, or the Gambling Commission (your chosen arbitrators) should feel the need to waste time re-visiting something they have between them spent many man-years on, so please don't misunderstand my call for racing to move on: it is not made out of fear that looking at this issue again. It is just that we keep doing it.

Shall we make a deal? If we open the books again, and again the conclusion is that we have no case to answer (as I believe it will be), you don't reply by saying we really should open the books? Equally, if it requires you to be transparent about where you make your money, you will be open to complete scrutiny as well? We're not afraid of, and we have had, an independent enquiry. But it is merely Einstein's definition of madness to believe that repeatedly doing the same thing will eventually bring a different result. Absolutely nothing has changed since the HMT review. We may have more customers, but by definition, the sort of people you fallaciously talk about as being relevant to your argument are sophisticated early-adopters of the product, which had been around for almost six years when HMT concluded its review.

You've also called for transparency of our accounts. They are published, in full, on our corporate website - something which we have no need to do as a private company, but which we have done in any case for many years. By all means go and look at them. They are audited by KPMG, if you're interested.

To your next point, I don't have a breakdown of back and lay win, but I fail to understand its relevance. It's abundantly clear that backing and laying are two sides of the same coin, and if your argument when it comes to 'who is the bookmaker' is that actually it makes a difference whether you are betting on something to happen or not to happen, I look forward to you making the case that fifty percent of the people betting on tennis, or snooker, or boxing, or Cup ties, are somehow doing something they need a licence for. I covered this in my response to Section 3 of your recently-published document entitled 'Betting on Britain'.

As regards how we categorise our customers: we don't, other than giving them a sliding scale of commission (the full details of which are published on our website), and recognising some key accounts. I suspect that is much the same as you do (in recognising your 'high rollers'); it's certainly the same as other businesses, for whom the idea of preferential rates and loyalty schemes is not unusual and certainly doesn't imply that there should be a change is the category of the customer as regards either his regulation or his tax. Personally, I'm a Gold Card holder with British Airways (lucky me!). I do sometimes fly for as short a stop as the crews do, and, remarkably, down the exact same routes. That doesn't make me an airline pilot, though, and I'm not licensed to take control of the plane. Thankfully, I also pay no tax that is not levied on the customers of other airlines in turn, and I certainly pay no taxes that are relevant to the company I choose to fly with.

As regards recreational or business users.... Yes, we have some customers who, away from us, run bookmaking businesses and use us to hedge. Any who do, and are failing to declare the profit (or indeed off-set the loss) that they make through the window onto the world that is Betfair, would be breaking the law.

The point that we keep making but you don't seem to get, though, is that we fail to see how you can run a business purely on Betfair. By restricting what you do to Betfair alone, you pay your money and you take your chance, like any other punter.

The reason for this is simple: as you know, our books do not include any margin at all (not even our own commercial margin: we add it later, and call it commission), but are the perfect reflection of the supply and demand we are seeing. Since none of our customers has a means of attracting business, the only way to get your prices taken, is to be best price. Given the perfect book, that would mean taking the book over-broke most of the time. I know your numbers haven't been great at William Hill recently, but you're surely not betting to negative margins, are you? It would be a quick way to go bust, as sports.com once proved.

You close by saying that "We would like to move on, but sadly we think that under that smooth and frankly quite likeable exterior, there hides a whole host of unanswered questions; which of course I may be too stupid to understand the answers to."

I don't believe there are any unanswered questions: on the contrary, I believe that all the relevant questions have been addressed repeatedly, both in independent enquiries and in documented form, and are collected here. In fact, I think it is precisely because those questions have been so comprehensively answered that commercial competitors continue to muddy the waters with irrelevances, pretending to be making different points when in fact they are raising the old, answered, issues, packaged slightly differently.

Which should answer your basic point: I doubt very much indeed that you, or indeed any of those vociferously arguing this bogus case, are "too stupid" to have got it.