www.markxdavies.com

Please note that this blog has moved!

If you are looking for my thoughts on integrity in sport, funding of sport, the racing industry, and the betting industry (and a tale or two about how we started Betfair and some of the happenings in the first decade), please visit www.markxdavies.com

Moving home

Well, not me. But my blog. It's not the reason that I haven't posted anything for a week: that's for a combination of being very busy, and not having anything particularly interesting to write!

But in the interim, my blog has been moving. You can now find it at www.markxdavies.com, complete with cheesy photo. Not all the links on it are working at the moment - it's work in progress - but I'll be updating it there from now on.

Many thanks indeed to Nick Garner for having worked tirelessly to help me out.

Economist debate

Very interesting, if you didn't see it. Not least for the closeness of the vote.

Peter V'Landys interview

I came across this piece of audio, in relation to the vote of no confidence which I mentioned before.

I post it without comment. It speaks for itself.

Old hat, new hat

It's all been kicking off, everywhere you look: Ladbrokes are in the frame to get the wagering licence in Victoria; Barney Frank's bill has got out of Committee (hoorah, hoorah); William Hill are moving their telephone betting operation offshore; and Bwin and Party have finally announced what we know they've been talking about for years, that they're going to merge. The times, they are a-changing.

Maybe, maybe not. As half the world moves towards the future, the other half is intent on trying to legislate for the 20th century.

Let's start abroad. Greece, it would appear, want to introduce a high turnover tax a la francaise and limit the number of operators, in the belief that this is the path to the future; Cyprus, rumour has it, has similar plans; and the French themselves are running around trying to enforce their absurd legislation, today taking seven ISPs to court to ensure that they block access to sites.

Good luck with that, mes amis, although it strikes me as being a bit like Agincourt: a battle you're never going to win. The Right2Bet campaign highlighted this week just how short-changed European consumers are by countries which are seeking to limit choice in a way that they'd never get away with for any other industry, and whatever you do try to the ISPs, consumers today will vote with their mice: unless you have the co-operation of the betting operators, attempts to prohibit are doomed to fail, as the United States has clearly shown. All sorts of sources suggest that the number of offerings is spiralling, a process accelerated if consumers are forced to look outside the country for a product which satisfies their demands. (Incidentally, I wrote snippets about this last month but only got around to publishing them today. Other newly-published short thoughts appear here about Australia, and here about the French, and I've also put up a posting about Svenska Spel).

I know: I'm boring; I say it all the time. But sometimes, things people say all the time make for front page news. Like today, for example. Victor Chandler, a man previously notable for saying of betting exchanges that "the only thing wrong with them is that I wish I'd thought of them first" calls for action on "exchange layers", and it leads the Racing Post.

In itself, a call for 'action on layers' can't constitute a news item. (Indeed, you would think that anything on the levy debate didn't constitute news any more... It's been rumbling on for so long and there's been so much said and written about it; although if you're a levy debate junkie, I have posted a previously-unpublished post on it today). But here's the twist... Chandler says that if every lay bet were treated as a bet by a bookmaker, he would pay levy from his offshore business and encourage others to do the same.

Excuse me for a moment while I pick myself up off the floor and put my cotton socks back on, but this must be one of the funniest things I've heard in a decade.

For starters, I can't see why anyone thinks it is relevant to listen to a point about levy from a man who, as I understand it, has been offshore and therefore not paying it since around 1995 (on anything other than one shop in Mayfair).

But more importantly, the premise of his argument is hugely ironic. Because if anything in the world proves the fallacy of the oft-cited adage that Betfair's prices are better than anyone else's "because its layers don't have to take into account the costs a bookmaker would have", then it is Victor Chandler's business.

Why? Because ultimately, the point that is always made is that it's too hard for bookmakers to compete with Betfair's prices because Betfair's prices, so the story goes, are made by people who don't have to account for tax and levy. But Victor Chandler makes his prices without having to account for tax or levy either, so how come his prices aren't the same as Betfair's?

Of course, the reason is that the pricing of bets has nothing to do with the levy debate at all. The price differential is created by superior risk-management: Betfair manages risk perfectly, and so doesn't have to add a risk premium into its prices. The commercial margin of both exchanges and traditional operators is not all that different, which is why the price differential on football is so much less obvious (with fewer outcomes to add risk premium for) than it is on horseracing.

Which brings me back full circle to William Hill's decision to move their telephone business offshore. Ralph Topping cited as the reason for the announcement "Government’s inertia over the issue of creating a level tax and regulatory playing field. William Hill," he continued, "pays more in taxes and levies than it makes in profit while the betting exchanges flourish under a favourable system where they only account for taxes and levies on the commission they charge to exchange users."

Ignore the fact that the commission that Betfair charges its users is the differential between what Betfair take in in losses and what they pay out in winnings, which was what William Hill got charged on too, last time I looked. Instead, consider the thoughts of a coffee companion of mine on Tuesday - a man who left the horseracing industry back in 2003.

"It's hilarious," he said to me. "If I stepped back into horseracing today, I could pick up exactly where I was when I left off. It's all the same arguments, with all the same rhetoric. You'd think they'd have worked it all out by now. When will they see the light? The rest of the world's moving on."

So the times are indeed a-changing, at least for some. How ironic that it's the French who should sum it up so well: plus ca change, plus c'est la meme chose.

Update

It's been another long but interesting day. In just short of three weeks since I left Betfair, I've picked up a couple of clients; am pursuing a number of interesting leads for whom I am in the process of writing proposals; have been roped onto one Board and another Advisory Board; and am now hiring. It's been quite a whirlwind of meetings, absorbing advice from all quarters, and trying to get used to the shortcut keys on my new Apple Mac.

In the midst of all of which, the endless stream of meals and drinks appears to have continued unabated, and the only thing suffering is my waistline. Thankfully, between servings I've had time to fit in a couple of pummellings on the tennis court, so all is not yet lost.

I met up on Monday night with an old adversary from Ladbrokes, who was among the first to suggest a beer on hearing the news of my leaving Betfair. Wags out there have been quick to insinuate that opponents who have suggested getting together have just done so to make damn bloody sure I'm off; but if that's been the intention, they've all been great company while they check on my departure.

Monday's couple of beers in Cork Street, round the corner from Ladbrokes' corporate office, consisted mainly of highly-enjoyable industry tittle-tattle. Included, inevitably, was discussion around the apparently mass departures of PR people from betting companies, what with Neal Wilkins and David Hood following me swiftly through the exit door. Who would ever have imagined that articles would one day be published mentioning Hoodie and me in the same paragraph, with no apparent mention of a fight...

Talking of fights, I lunched yesterday with a racing journalist and broadcaster with among the most forthright views in the business. Unfortunately I had to leave with only the single bottle of wine consumed, so the level of invective was lower than we've become accustomed to together over the years. We laughed at the news that one of racing's advisors is running around telling people I lost my job because I was rubbish at it, didn't have a decent argument to put, and couldn't put it anyway. He used to work with me, so I guess he ought to know...

Someone else who used to work with me made for another lunching companion today: Betfair's first proper commercial director, Tim Levene. I say 'proper', because in the very early days, I was in charge of the company's business development; and indeed Tim (who was at Flutter) and I were direct competitors. That was before the merger saw him take reins to which I was ill-suited (thereby saving the business, I suspect) and me move to a pure communications role; but after, amusingly and completely by coincidence, I had gone to see him - before either Betfair or Flutter launched - with a view to working for him at a betting start-up still hiding under the cover name of 'Insight Markets'. (He didn't hire me. I can't believe we still speak. :))

We ate at a Japanese restaurant on St. James's which seriously ought to be used as a set in a Bond film (if it hasn't been already), and discussed business ideas and strategies. Tim's dad is Chairman of Lloyds and was formerly Lord Mayor of London. I suspect Tim will be both before he's 45. I leave every lunch I have with him feeling well-fed, full of bonhomie, and entirely dubious about my own ability to do anything.

It wasn't because of that that I spent the rest of the day taking advice from various quarters about Camberton, honest: those meetings were set up well before! But I had a full afternoon and evening getting helpful hints and tips from kind people who are giving me the benefit of their knowledge about company infrastructure and visibility. One wishes to remain anonymous; the second, Will Rolt, take a bow. Thanks for your help.

By the by, if you're terribly interested in what I think the relevance of Betfair's Premium Charge is to the debate over levy, you can find out about it here. If you're not, you might be happy with the short version: "it isn't".

Australia, Australia, Australia

In between charging from pillar to post today, during which I picked up an exciting new client, I've been enjoying another fabulous piece of analysis from Cyberhorse on the SMH advert that I mentioned yesterday.

I don't have time to write anything else today, and if you have a spare moment, you'll want to be reading that anyway... But as it happens I've written plenty more about Australia in the last month which I have not yet published: if you're interested, you can see thoughts about the court case over there here and here, and the stuff I wrote relating to the Productivity Commission report here.

Judgment

I received a text yesterday morning from a name well-known in the racing industry which read: "Have you seen the news about the Findlay fine? It makes the BHA look like twats."

Harsh words, perhaps, but to the point.

I can picture much wailing and gnashing of teeth on High Holborn. But as I mentioned yesterday, they need only create a decent rule and they wouldn't get themselves into this sort of pickle. I see Greg Wood has written as much in typically robust and sensible terms in the Guardian today.

I lunched soon after (someone asked me in the afternoon if all I do is have lunch and dinner; not far off, I admit) with another racing face, whose view it is that there'll be a change of leadership by November, on the grounds that increasing numbers of people are scratching their heads in dismay at the insistence on a strategy and numbers never justified when they were announced in 2008 (before the world's economy fell apart), but adhered to since, nonetheless; and supported with dubious theories and crazy plans. There are previously unpublished posts relating to each which I have published today here and here.

Meanwhile, Down Under, it appears possible that Peter V'Landys time as Chief Executive of NSW is finally drawing to a close. If you compare the interviews he is giving newspapers and the adverts that his organisation is putting out about there being a logic to their strategy (in the Sydney Morning Herald today on page 36) with the no-confidence vote they are receiving from the trainers in their state - brilliantly, as ever, written up by Bill Saunders on Cyberhorse - you will draw your own conclusions about that particular racing leader's rationality.

Me? Well, no time for that. I'm off for another client pitch. :)

Harry

I've been asked my view a number of times about the Harry Findlay laying story which goes to appeal today.

I haven't changed my opinion on the rule he has fallen foul to since it first came in: I think it is a bad rule which doesn't address the issue it purports to deal with, when a small tweak to it could make it a good rule that does. That's what I told John McCririck when he interviewed me at Sandown the evening that it was introduced, back in 2003 (I think it was).

It seems to me perfectly sensible to ban owners from being in a position that they profit from their horses losing - I am not sure that anyone would argue with that - but in my opinion that needs to be done howsoever they will profit. That ought to mean not being able to back another horse in the race to beat your own. It's about time racing's authorities and rules recognised what DCMS long ago pointed out: that backing and laying are two sides of the same ccoin.

It should obviously also mean not laying your own, but crucially that rule should in my view be extended to "to a position of net profit if it loses". The idea that you cannot lay back a back bet, if in doing so you are reducing your net backing position or locking in a profit on a previous bet is stuck in the dark ages. If there's an audit trail to prove that you are a net backer of the beast, and you stand to make more money from it winning than you do from it losing, then I think you should be able to lay it as many times as you like.

Integrity issues

There seems to have been a lot of stuff this week on issues relating to integrity in sport.

I got a call on Friday from Newsnight ahead of the piece they put out about Nigeria's football team; I saw there was speculation around tennis with news that officials were assessing reports of irregular betting on a first-round match between Richard Bloomfield and Christophe Rochus at the Hall of Fame grass-court tournament in Newport, R.I.; and I was delighted to see the announcement of an education deal with the British Athletes' Commission brokered by my old colleague Susannah Gill.

I was surprised to see Patrick Collins of the Mail on Sunday, a journalist I normally very much enjoy reading for his in-depth knowledge, have a go at the last of those. "If there were no sports gambling industry," he wrote, "there would be no question of corruption, nor any need to ‘safeguard the integrity of sport’".

Of the many places I might direct you, Patrick, can I suggest you have a look at this?

Poker push

Interesting that within a week of each other, both Time magazine (sadly, subscription only) and the Economist have had big 'special report' pieces on the changing face of poker, and the quantum of gambling that is taking place online out of the United States, despite it supposedly still being illegal.

Someone out there in the PR world is doing a good job!

Sharpe, and not so sharp

The news today was full of the fact that it is 25 years since Live Aid, but every bulletin I heard neglected to mention that yesterday was twenty years since the American jockey Chip Termini was suspended for 30 days for dropping his towel as he emerged from the shower at Louisiana Downs in full view of a 'jockette'.

You think I'm kidding? It's 100% true: and I know it because it's the 'Strangest Event' listed in the Racing Almanac given to me this afternoon by its author, Graham Sharpe of William Hill. He was kind enough to invite me out following news of my heading for pastures new ten days ago, and we ended a very agreeable, anecdote-filled, lunch with him signing a copy he had brought along specially. I've been perusing it ever since, and very interesting it is too.

I went from lunch to chew the fat with an old friend in Westminster, who was full of interesting snippets himself. Much of the hour-and-a-half we spent together over a mid-afternoon bottle of wine was split between bemusement and amusement at the latest public offering from the BHA, published yesterday (apparently in a fit of pique) and entertainingly written up in today's Independent by James Moore, who clearly read the press release with an eyebrow raised in the manner of his namesake. The 'it's everyone else's fault!' approach also seemed to be the much-derided subject of most of the discussions I joined last night at Windsor, where many racing stakeholders were the guests of Arena Leisure at their annual world-beating barbecue. Making friends and influencing people, I think it would be fair to say, the BHA is currently not.

Previously-unpublished posts today, if you care, are put out here and here.

Bwin

Just seen the news about Bwin re-branding Italy's Serie-B as Serie-Bwin.

You've got to give the credit for ingenuity. It really raised a smile.

Onwards and upwards

It's Betfair's 10th anniversary party tonight at the HAC in the City - what I suspect will be a fabulous event given the hard work that I know has gone into it from the events team.

Many Betfairians have sent me notes asking if they will see me there, but disappointingly, the answer is no: sadly my ten years as an employee fell a week short of the official celebration, so I'm no longer invited. Lucky people who joined the company this week and can attend after five days' service!

I had a successful day yesterday meeting three potential clients, so I'm spending the day writing them a few thoughts about how they might take their ideas forward.

Fresh back-catalogue posts today here and here.

Clients and back catalogue

It's been an incredible week. This time seven days ago was my last day employed by Betfair.

I have finally replied to the mails that I was sent, and this morning will embark on the voicemails which I have not been able to get around to yet. And I'm running off this morning to meet a potential client - my third in two days - so, fingers crossed.

With all this running around, I'm resorting to previously-unpublished posts on subjects which remain current, for those wanting something new to read.

If you're interested, you can see them here and here.

Two oldies

I've published two old posts today, if you're interested: here and here.

Come on down - the price is right!

There is a certain gameshow feel to the Levy Board's statement that it is opening a consultation on whether Betfair has any customers who are liable for levy.

I can almost picture them hiring Cilla Black to make the announcement, given David Zeffman's article in May's Racing Post, which so obviously heralded the start of a concerted campaign that I wrote at the time, "I guess that only if the HBLB were suddenly to open up a consultation exercise on the issue on the back of the article, might the view that [the newspaper] was wittingly or unwittingly kicking off a campaign be reinforced."

Surprise, Surprise!

Perhaps the Nic Coward view is that if this time, racing plays its cards right, it might get what it has failed to get in every past exploration of this subject. Presumably Stuart Hall will be next up, declaring on Coward's behalf that "It's A Knock-Out!" and revealing the killer blow.

Except, a cursory glance at the Levy Board's consultation announcement reveals that there is nothing new in the paper. As Martin Cruddace, Betfair's Legal Director, declared in a statement published by the company yesterday, "After a thorough, independent review of this very issue throughout 2004 and 2005, the Treasury came to the conclusion that the treatment of betting exchanges and their customers was fair. Since then, there has not been one scrap of evidence produced by anyone to suggest the situation has changed".

Indeed, the opening section of the Levy Board's consultation document merely reiterates the extent to which we have covered all this ground before; and paragraph 112 is extraordinary: "First, there is a difficulty with a necessary premise: that there are customers of a betting exchange who are carrying on a business. That is ultimately a question of fact which would need to be demonstrated and in truth cannot be. Leaving aside that fatal initial objection, the following points arise."

So to my mind, this seems to me an admission that the Levy Board already knows that it is about to draw another Blankety Blank. Although I received an e-mail yesterday from one of my favourite racing journalists, who told me that, "David Zeffman I know not. What I do know is that bookmakers operate their business (rather than stand, uselessly, at the course) on Betfair.... Love you to death, love Betfair to death - but none of you are bookmakers and the nuances (dark arts) of racecourse betting are perhaps not your strong suit", in reality, perception and fact here are a long way apart.

While people might be making money as punters, that doesn't make any of them bookies. And as I tried to explain to Racing many times when it was my job to give a monkey's about it, laws, and law enforcement, need to be based on something other than rhetoric. Unfortunately for Racing, rhetoric is all that Nic Coward has on his side in this debate.

To give him credit, at times that rhetoric is Shakespearean in its stature. But at others, like in his statement yesterday, it is laughably poor. So desperate is he to connect Betfair to racing's ills, that he name-checked it in isolation in the most absurd manner, apparently missing completely the fact that the company has decided to pay a voluntary contribution to racing directly into projects of its choosing, rather than into coffers he controls. That decision, taken while I still worked there, was the direct result of Nic's approach to running the sport: he gave Betfair no credit for its voluntary contribution (despite the fact that it was unique at the time it was paid); he insisted it was not levy at all, but a payment Betfair should do what it wanted with; and he spent much of it on legal fees aimed at damaging the company's business.

It continues to pain me, even in my post-Betfair world, that he should keep leading Racing on a hopeless cause, just as it does that people in racing should blindly follow him. There are so many other things they need to get on and address, and their task in addressing them gets harder with every day that they waste tilting at windmills.

Swamped

I've been totally swamped by kind messages following my posting with news of my resignation on Friday, and I will be spending my morning trying to answer the 400-odd e-mails I've received before I head to a lunch.

It's been really extremely flattering to receive so many messages of support, both from people inside the company and outside; and both from those I have always known to be good friends, and from others who have traditionally been on the other side of the divide from me.

Tim Ryan, who famously once tried to get me arrested in Australia on the grounds that I was apparently running an illegal gambling operation (a blog for the future, perhaps), sent a note wishing me good luck; and first on the telephone at 9am was Ralph Topping to say all the best.

Wags will doubtless suggest that he was calling in delight at seeing the back of me, but nothing could be further from the truth: in fact, he was extremely kind and generous in his assessment of my Betfair career. Not that that surprises me about him: Ralph was the subject of one of my unpublished posts from my back catalogue, which I have today posted here. Another old post which I couldn't publish previously has gone up here.

So, the first working day of my post-Betfair career is going to be an even more e-mail-filled one than was my time spent there. Which means, not a lot of time to blog. We'll save that for later in the week.

Dorset Rise

There was a certain irony to the start of my day yesterday. I went to a Social Mentoring briefing at KPMG's offices, which meant walking up the hill between Tudor Street and Fleet Street along a small road called Dorset Rise.

It was on that very street, in December 1999, that my senior salesman at the time chatted to me, unknowingly, about the multiple moonlighting from JPMorgan that had seen me taking numerous days off over the previous few months to fulfil commitments with BBC Sport and the Daily Telegraph.

He put his arm around me and said, "Mark: can I just say, as we head into the new year and a new decade, that I hope your luck changes... I've never known someone suffer so much illness, the loss of two family members, and the death of so many friends in one year." It was at that moment that I realised that doing two jobs alongside my main contracted one was untenable in the longer term, and I resolved to quit.

So it was ironic that I should have found myself on that same street yesterday morning, the very morning that I quit the job that I went to from JP, at Betfair. Ten years on from last resolving to do so, I have resigned.

It's been fun. But in recent months I haven't been able to offer Betfair as much as I'd like to of what I think I am best at; so I think it's time to move on to new things.

I have set up a company of my own, Camberton, which will offer to a broader church (i.e. I'm on the look-out for clients!) the sort of thing that I have been responsible for at Betfair over the last decade: reputation management, public affairs, PR, communications, and external stakeholder management. It's something I have talked about for a long time and now is the time to do it. And I'm pleased that Betfair think I still have a role in offering that kind of thing to them, because they are my first client! Many of the challenges that I have worked on for them remain, and I will be continuing to advise and work with them on those for at least the next twelve months.

On that, I've had various thoughts, which I have been jotting down but not publishing, on many of the industry issues in recent months. Now that it is clear that the thoughts are mine and not an official Betfair position, I'll stick them out over the coming days and weeks for those who are interested, in the order I wrote them, starting here and here.

Friendbet

I was interested to see that a company called Friendbet has been licensed to operate in France.

I always knew the French hadn't understood what a betting exchange was.

They set out to ban exchanges, and came out with legislation that they think has done it.

And then they license Friendbet.

What do they think that is, if not an exchange?

Dixon and Blatter

I read the comments from Paul Dixon about the need to return to a turnover-based levy system with my head in my hands. It's taken me 48 hours to get them out again, and even know I wonder if it is worth writing about which bit of it I found the saddest.

Perhaps it was the particular and pointed exoneration of Sportingbet for paying a voluntary levy suspected to be in five figures, without mention of the voluntary levy paid by Betfair, which is comfortably into seven.

Or maybe it was hearing that notion repeated that a turnover system, which in my view encourages a high margin from operators and therefore will ultimately kill the racing completely in a competitive world, is somehow a lifeline.

I'm not sure. But it reinforced my view that racing continues to be led by people who claim in one breath to want innovation, and then with the next want to pick and choose parts of an innovative model, as if doing so doesn't destroy the whole.

I saw a great Tweet from BBC Sport's Jacqui Oatley this weekend, which read, "Blatter saying there's no need for goal-line technology is like your grandpa saying the internet's pointless."

I would categorise Paul Dixon's comments in the same category, because he insists - in line with racing's other 'leaders' - that the levy is having problems because of the single most notable innovation in betting in the last decade. The reason that the levy is struggling, he says, is that the betting landscape has changed because of "the extraordinary growth of betting exchanges. Exchanges have changed the whole dynamics of betting in recent years and, in particular, they have had a major effect on margins. Indeed, a by-product of returning to a turnover system would deal with the problem that racing has with the exchanges not paying an adequate amount into the Levy in one fell swoop – they would simply be paying a lot more than they are now.”

Leave aside the clear demonstration from this excerpt that the levy debate has nothing at all to do with what is right or logical, and everything to do with the 'we just want more money' attitude that is endemic in racing's upper echelons; and consider instead what that statement is actually saying. If you ask me, it reads, "the betting industry has moved towards the future; racing's response should be to try to stifle its innovation by moving back to the past."

Dixon for the FIFA job, perhaps?

Productivity Commission

It doesn't surprise me to find myself amused by the reaction of Tabcorp's Chief Executive to the findings of the Productivity Commission report in Australia, but somehow, despite everything, I still find myself astonished at the way some people believe that they have a right to protection from market forces that everyone else has to deal with as a way of life.

I'm not suggesting that everything in life should happen without regard to potential consequences, but to argue that the Productivity Commission's report 'shows a serious lack of understanding of these industries, both in Australia and around the world" is just arrogant and insulting.

I would say precisely the contrary is true: the report shows a complete understanding of the industries and the issues, and, shaking its head in bewilderment at the way in which those who are part of them believe that they should be able to maintain the status quo which has seen them spend many years in the sun, it suggests ways to allow more people to play.

Cyberhorse put it like this yesterday: "This clutch of multi-millionaires want a racing industry structured so that literally millions of little people - punters, low paid workers, small breeders and hobby owners, dutifully contribute to bloated service fees and artificially inflated bloodstock values. They have achieved this position over a long time by basically ignoring the Trade Practices Act and the Australian Constitution, arranging state laws and Rules of Racing to bolster their position."

For the second time in a week, well said Bill Saunders.

Svenska Spel

Really, you have to laugh your little cotton socks off.

Although, inexplicably, I can't find a link to the press release on the web, among ones which laud their brilliance in combatting problem gambling and things, I gather from other websites that Svenska Spel have fired their CEO.

This in itself is not amusing. I'm sorry for the lady. No-one wants to lose a job.

But it's when you get lines like this in news reports that you have to suppress a smile:

During Persdotter’s first quarter in charge, net gaming revenues at Svenska Spel’s online division fell 15 per cent for poker while lotteries fell 18 per cent, games fell 10 per cent and sportsbetting fell 3.5 per cent. The company however welcomed the decline as evidence of the effectiveness of newly introduced responsible gaming measures and a reduction in marketing expenditure.

On that basis, why fire your CEO for 'mixed results'?

The hypocrisy of the monopoly systems around Europe has surely never been laid barer. You're hired to introduce measures to limit gambling because it sounds good politically in defending your monopoly to the European Commission, but when you are entirely successful in doing that, you lose your job.

Let's just admit what we all always knew, that they don't want gambling limited at all: they just want the people who can profit from it limited.

In firing their CEO, Svenska Spel have just proved it.

More on Australia

There's some great stuff appearing on the court decision in Australia.

If you've missed them, there's another brilliant piece from Cyberhorse here. And Betfair's Australian CEO Andrew Twaits gives his view of the world here.

Racing NSW case

The reaction to the judgment handed down in Betfair's case against Racing New South Wales is fascinating.

Some have pointed out that there are fairly technical reasons for Betfair's case being dismissed (the judge accepting that the turnover fee was discriminatory in favour of TabCorp and against Betfair, but dismissing the claim that it was protectionist), such that the eventual outcome may well change; others outline that it is not the victory for racing that it immediately appears; and others still, pointing to the Sportsbet victory the same day, show how the combined judgments will impact the future governance of racing.

Others close to racing, though, are hailing it as a 'great opportunity' for the sport.

I find racing's thinking, as exemplified on the final link, incredibly muddled. The dispute shouldn't be over the idea that racing should be able to charge. The question for me is what basis of charge is the best for the industry's future.

But consider the Racenet article referenced immediately above. In one line it says, "Racing in effect is now free to claim a percentage of every dollar wagered on its sport, no matter where in Australia it is wagered – a stunning opportunity to be sure" and a few paragraphs later it accepts that 'Huge amounts of money can churn around within the system with the same dollar going through a bookie then the tote as it’s laid off. A new turnover tax on that amounts to a double dipping."

So, which do you want it to be? A turnover tax is not a tax on punter drop, by definition. It's a tax on turnover, and turnover has nothing do with what the punter spends or what the operator makes. That's not my judgment alone: Justice Perram thought that turnover had no utility as a measure of the number of times race field information is used, and felt that as a proxy for numerical use, the fee was “hopeless”.

Aside from legal argument, though, the question has to be what is most effective in taking racing into the future, in a world with multiple product. In other words, what charge maximises take across the global marketplace, taking into account consumer behaviour, and a desire not to create something that then alters consumer behaviour in order to facilitate avoidance.

There is only one sort of tax which doesn't incentivise the person paying the tax to change their behaviour in order to reduce exposure to whatever it is that is being taxed, and that is a tax on profit. Taxing anything that has a variable need just encourages people to reduce the need for it (look at the old window tax), but reducing your profit to pay less tax is clearly cutting off your nose to spite your face. A tax on turnover clearly incentivises you to reduce your turnover, particularly given that you can do so without reducing your profitability. You just raise your margin. a 2% margin on turnover of £1000 clearly generates the identical profit to a 4% margin on £500.

So, a turnover tax, by definition, incentivises the operator to keep prices high, in order to keep turnover low. Keeping prices high means being less competitive; being less competitive means reducing innovation; reducing innovation means opening a gap between what punters want in their regulated market and what they are being offered; and opening up a gap creates demand for a black market.

The thing is, even people who argue what a 'great opportunity' this is, seem to recognise that. Take that Racenet article again. it says: "Turnover needs to be maximised, markets need to be competitive."

So, how do you maximise turnover by taxing it? And if you want racing to be competitive, why tax it in a way which encourages higher prices?

Technology

Not that it's my usual style to comment on corporate stories, but the news which has been published on various blogs, and formally announced on the official website, of a deal which puts Betfair onto Samsung televisions, is one of the more exciting releases I have seen in a long time, and in my view a huge personal success for the amiable and extremely capable head of Betfair TV, Simon Miller.

The wider picture here, though - following on so soon after the equally exciting launch of Betfair's iPhone application, which was downloaded 20,000 times in the first month - is the same as I was making when I was interviewed the other day as part of the BBC's coverage from the Aegon Championships at Queen's. Asked by John Inverdale what should be done about people betting on laptops court-side, I commented that there is little point in dealing with any 'issues' perceived to be associated with betting by trying to hold back technology. It's far better to address them through transparency and co-operation.

On that track, I recently spent some time with a number of sporting Chief Executives, who gave up some of their time to come and understand how betting is tracked today. I think it is fair to say that they were wide-eyed about what they described as 'almost anti-terrorist style' means of tracking any problematic betting. We agreed that the biggest deterrent to malpractice is getting the message out there that the proliferation in online betting has tipped the risk/reward ratio dramatically in favour of risk, by virtue of the trackability, and not - as is commonly perceived - in favour of reward.

The more sports leaders who understand that, the better for all of us, because the message will be easily communicated to the players and officials (who are the only people who can genuinely impact the outcome of a sporting contest). I'm very encouraged that organisations like the Professional Players' Federation and the British Athletes' Commission are so willing to engage in the subject. It's good news for everyone - except the would-be corruptors.

Name and logo

I did the presentation to our new starters the other day, in which invariably I get myself lost in stories of the olden days rather than sticking to the corporate script, and I was reminded, as I mused, of the very first 'focus group' that we had as we got Betfair up-and-running.

'Focus group' was something of a misnomer, given the people who were involved: our group of six comprised mainly old university footie mates of mine, not known for focusing on an awful lot other than the bottom of a beer glass. But they fitted the bill (i.e. they had nothing better to do), and we sat them in a room to ask them questions about how people might react to the proposition we were about to launch. We started by presenting the six of them with a single piece of paper which we placed in the middle of the rectangular table around which they were sitting.

All it had on it was our proposed name and logo. We wanted to know what came to mind.

The first two comments that were made as the piece of paper was put down will stay in the memory forever, I think.

"Well that's pretty stupid," said one. "Betting isn't fair, is it?"

There was a pause.

"Oh - but look" piped up a second. "They recognise that. Because there's a great big arrow going in, and then just a tiny little arrow coming back out..."