Betting in cash

I was at the SportsAid quiz at the end of last week, which, I can't resist mentioning, my team won for the fourth year on the trot.

But boasting aside, the most interesting part of the evening for me came before we had even started with any questions, when I fell into conversation early on with one of racing's most amicable and sensible Chief Executives.

Inevitably, conversation turned almost straight away to the levy, which has fallen to £77m this year, which takes it back to where it was about six years ago, if memory serves me right. I think much of the world is where it was six years ago - the price of my house certainly is, for example - but of course this drop has led to a lot of wailing and gnashing of teeth. As Ralph Topping has pointed out in his own inimitable way, the racing industry seems to believe that in the face of the biggest recession in a generation and amid calls for austerity measures from everyone, its funding ought to hold up.

But we weren't actually arguing about the rights and wrongs of the levy. Instead, I suggested a solution to the 'problem' which I had presented to me, which, specifically, was punters using hospitality boxes at racecourses to trade 'live'.

This is, of course, racing's new bugbear. It is evidence, they seem to think, that Betfair punters are trading 'in the course of business'. It is muddled thinking if ever you came across it, and I thought it was about time I tried to explain why.

When it comes to the levy debate, I personally have no argument about 'professional punters'. It just has an argument about professional punters being singled out at one operator specifically. As the Weekend FT as amply demonstrated this weekend, professional punters are not limited to one platform; and it is irritating that racing should attack successful punters on Betfair and not anywhere else, just because Betfair tracks what its customers do.

I pointed out to the said CEO that if I were racing, I would give up arguing, bogusly, that guys who are prepared to spend money in order to try to give themselves an edge are 'in business', when they clearly are not. They happen to be at differing levels of professionalism, but that is an entirely different thing. The minute 'having an edge' makes you in business, then all Racing Post readers are in the net. It's an absurd argument that will never stand up to any challenge, so they might as well drop it and find something that might.

All this I told the CEO, and he asked me what, therefore, I would do about the fact that nobody else tracks betting. And, like our Australian CEO Andrew Twaits did recently, I suggested that if I were racing, I would be making the case to government that betting should be made account-based. It would solve all sorts of problems at one fell swoop.

First of all, it would deal with all the problems which exist in an environment where large amounts of cash change hands: money laundering and fraud would be reduced dramatically.

Second, it would provide data for problem gambling research, which government always says is so bad (without much evidence), and it would save separate and less accurate data collection exercises for prevalence studies.

And third, it would allow us to see how punters made or lost money across the board. If you made money on Betfair but lost it on Ladbrokes, you wouldn't be taxed on your winning portion without being able to offset your loss. And if you made money on one platform, you were not discriminated against relative to someone who made money on another.

People will argue that this is pie in the sky. But is it? I'm not advocating that betting has to be cash-free (although I don't agree that a move away from cash is so difficult, myself... The move out of cash to card-based transactions has been embraced by the younger generation, at least). I'm just suggesting that you swipe your betting account card at the moment you place your bet. It's not difficult; it takes no time at all; and it provides fantastic data for marketing purposes which any other industry would embrace (indeed, most other industries incentivise you to use a card precisely so that they can get that data: do we all think Tesco give us points out of altruism), but which racing and betting seem to think is somehow so problematic that they won't entertain looking at any solutions around it.

Anyway... that was the argument. You can take it or leave it, and I am sure far more will disagree with it than think it has merit. But the response? I kid you not: word for word, it was this:

"But what happens about the person who comes along with £20 grand cash in a briefcase?"

I think my jaw hitting the ground took him aback slightly, because even before I'd had the chance to comment that of all the possible reasons for rejecting the idea, this was not a great defence, since there is only one reason why someone comes along with £20 grand cash in a briefcase, he went on: "People like to be able to use cash without it being tracked. I do it. I pay my builder in cash. That way I save 17.5%!"

I'm not for a second suggesting that my companion is the only person who has ever done that, but there was a certain irony in hearing one of racing's most senior figures arguing against a solution designed to capture so-called 'levy-evaders' by commenting that any move towards greater traceability of funds would make it harder for people to avoid tax that is due.

Change of view

Many of you have asked me why the 'view' of my blog title has changed geographical location from my office to my home, and why I've suddenly cut down the amount that I'm writing.

The reason is that with my job at Betfair having recently changed so that I have responsibility for regulation but no longer for our public positioning, I have been asked not to blog about industry and company issues. Rather than stop writing completely, I have only been publishing things which cannot be construed to be a Betfair view.

This blog has been a useful communications channel for me in my role running our external affairs, but for some people it has now become a cause of confusion as to whether it is an official Betfair channel of communications, or just my blog.

With responsibilities changing, it's now the latter, and is therefore confined to non-industry issues for the time being.

So if you've kept coming back in the last ten days wanting to know my thoughts on David Zeffman's article about betting exchanges; the Ways and Means hearing in the US; the sports integrity survey in PR Week; Paul Roy's interview in the Racing Post; the reaction in Australia to calls from Betfair's Andrew Twaits for betting to become account-based; apparent evidence of the growing black market, judging from EU Commissioner statements; the latest with regard to France now that legislation is in place; or rumours of an attempt to get horsemen to strike; I'm afraid that I didn't publish my view on any of them, but instead merely wrote them up for my own record. Maybe my draft blogs will be like the Beatles' long-undiscovered back catalogue, and one day will all get published at once!

In the meantime, I'm afraid you're confined to anecdotes about where I've been and what I remember from my past, which will no doubt please those of you who have asked for less corporate-speak and more stories!

Ralph Topping

Ah, you clicked on this link quickly, didn't you... Expecting a tirade? Go on, you know you were.

In fact, it was to say, hats off to him. I sent a note out to various CEOs in th gambling industry today, asking them to support a Betfair six-a-side football tournament we are holding in aid of the Anthony Nolan Trust.

Despite our commercial differences, Ralph was the first to answer, confirming that William Hill would be there, happy to be taking part.

Good on him.

Strike!

Words reaches my ears that Paul Roy and Nic Coward have been holding secret meetings with trainers with a view to calling a one-week strike, should racing not secure what it is after in the current levy debate.

Surely not? It seems such an odd strategy that I struggle to believe it. But my source was at one of the meetings in question, and I can't believe he dreamt it!

Paul Roy

It comes as no surprise that BHA Chairman Paul Roy should once again repeat verbatim the wording that he gave the Racing Post last week, and that David Zeffman put in his article two days earlier, about professionals operating on exchanges, in today's 'exclusive interview' in the paper.

It's no surprise either to see him making statements like, "exchange prices which are very keen but have minimal liquidity at those keen prices".

But both statements go to show that racing has not lost its old knack of saying things it wants to believe, and then believing them just because it hears them said.

The idea that we have 'minimal liquidity' at prices that are 'keener' than those that traditional bookmakers would otherwise make is easily dismissed by anyone who actually looks at our markets.

It may well be that Paul Roy wishes that there was minimal liquidity, and that somehow the traditional price on-course is a fairer price to the punter because it is more reflective of proper volume.

But unfortunately, Paul, it isn't true. However many times you say it.

Queen's Award

I went to a lunch the other day with the chairman of British Airways, Martin Broughton, who was also once the Chairman, of course, of the BHB (as it was then). He was extremely warm and friendly, and made a point of coming to say hello before we sat down, which was kind.

But my reason for mentioning it is not to talk racing, much as that encounter brings thoughts to mind in a week where there has been plenty to discuss. Rather, it was because at the lunch I sat next to someone whose company has just been given the Queen's Award for Enterprise, and as I told him the tale of how we had gone to collect ours back in 2003, I remembered that it was a story that I had said I would blog.

There are two awards ceremonies when you get the prize: one which takes place at your offices, attended by Her Majesty's representative, the Lord Lieutenant; and the other at the palace, where, if you're lucky, you get the Queen herself.

Neither of ours went entirely according to plan, but both are hard to forget.

The Lord Lieutenant's visit to Betfair's offices in Hammersmith took place on a hot summer's day in which we had decamped from the clutter of desks and television screens on the first floor of our office building, to the wide open and uninhabited top floor of the building. The landlord had given us special permission to use the space so that everyone in the office could come and see Bert accept the large glass bowl, which was displayed prominently on top of a pedestal in front of a fairly cheap hoarding of the type you see at convention centre booths.

Because the fourth floor was uninhabited, it had no air conditioning; and with 150-odd people gathered in the airless space, it was quite warm. The room was plenty big enough; but it is surrounded on all sides by big glass windows, and with the sun shining through, it was a bit like being in a greenhouse.

Unfortunately, the Lord Lieutenant was late. And it was getting hotter, and hotter, and hotter. Eventually, someone decided to do the sensible thing: let's open a window.

Er... let's not. Oh. Too late. Just as the Lord Lieutenant comes out of the lift and walks into the room, the window is opened: a rush of air blows through the building, catching the cheap hoarding like a kite, and collapsing it onto the pedestal, which topples over and - crash! - the Queen's Award hits the ground and smashes into a thousand pieces. Ooops. The photo of Bert receiving recognition from the Lord Lieutentant sees them both clutching only the framed certificate confirming its authenticity.

Weeks later, we were off to Buckingham Palace. It was Ed, Bert, and me; and the start was no more auspicious, when, as our car pulled up to the Palace's gates, I realised I hadn't brought my passport, as identification procedures required. But they let me though, somehow, and in we went, led into a large room where other award winners were milling around, and the Queen was being taken round those who, for reasons unknown, had a yellow sticker on their name badges. Ours were plain white.

We took a glass of wine, as offered, surveyed the scene. Bert was hopping from foot to foot, slightly nervously and in need of a pee. Did we know where the loos were, he asked. A door to the right was indicated, and off he sets - no sooner having stepped away from our little group of three than Ed and I clutch each other in horror: in a straight line between us and the door through which Bert will have to pass is Her Maj, with a bodyguard standing just close enough to her to protect her, but just far enough away that in a normal cocktail party, it was a gap you'd happily slip through with a hand on the shoulder and a quick 'excuse me'. Bert was heading straight for it, and we had visions of him being in a half Nelson, on the floor, within seconds. Closer, closer, and closer he got... And at the last minute, he spotted her, and veered away. Crisis averted.

By the time he got back, we were being briefed on what the procedure was for us to go through and formally be congratulated. Speak when spoken to; 'Your Majesty' first time, "ma'am" or "sir" after that; don't be the first to initiate anything. Three rules. Don't forget them.

We joined the queue: Bert leading, Ed next, me bringing up the rear. Bert still hopping foot to foot, even though he'd had his pee. Just as we approach the door, a change of plan: "you go first" he tells me, slightly panicky, and I get pushed through.

Seeing the Queen for the first time in real life is quite an odd experience. It might seem obvious to say so, but she's a little old lady, and it's a bit like standing in front of your granny. Only, for some reason, you're terribly nervous. She extended her gloved white hand and offered her congratulations. "Thank you, Your Majesty," I said, and went on to the Duke.

The Duke was an altogether different proposition, and not just for being about two foot taller. He looked less bored, and he wanted to chat. "Aaah..." he says, in a drawn-out sort of way. "Congratulations! But tell me... what is it exactly that you doooo?"

I thought that there was a long answer to this and a short one. On the basis that he wasn't going to be over-interested in our risk-management processes, I told him, "we're a betting exchange, sir".

"Aaaah!" he said, like he knew all about it in an age where I suspect Harry Findlay had only just heard about us, "a betting exchange!" I half expected him to tell me his mother-in-law would have been a customer had she still been alive.

Ed followed on behind me, and we greeted each other with a smile and a nervous laugh once we we through. And then came Bert, all of a fluster.

"I can't believe it!" he said. "I fluffed my lines!"

"You what?" we asked.

"When I found myself in front of her, I got slightly covered in confusion. So before she had done anything, I thrust my arm forward to shake hands, and said, "hello!""

Ways and means hearing

The opening statement for the Republicans in yesterday's hearing into the mooted McDermott Bill, had the California senator Wally Herger question the need even to have a hearing on Internet gambling.

“Given the fact that just four years ago the House voted overwhelmingly – 317-93 – to ban Internet gaming , I have to ask why we are even holding this meeting when so many other more pressing issues confront us,” he said.

The bit he seems to have forgotten is that the 317-93 vote was in favour of the Safe Ports Act, onto which the UIGEA was tagged at the last moment. The vote wasn't a vote against internet gambling at all - certainly not by 317-93 - but a vote on a bill aimed to protect the United States against terrorism, which few were ever going to vote against.

I have no idea what the vote would have been had it been on UIGEA alone, and had UIGEA been properly debated. Who knows, it may have been a bigger majority. But it would seem less disingenuous to accept that no proper debate on this issue has yet been had, and then to have it.