The Betfair Flying Wedge

Sat, Oct 30, 2010

Betting News

Betfair’s rugby union team recently trounced Ladbrokes in a charity game. I’m sure the victory was won entirely within the modern rules of the game and that the outlawed ‘flying wedge’ wasn’t utilised. I think the Betfair boys have adopted the tactic elsewhere to some effect this week.

The ‘flying wedge’ is a technique where players from the same team bind together whilst running at pace into the opposition defensive line. I believe it was first used in sport in American football but it was originally developed as a military tactic for breaking the enemy line. Effective on the battlefield it proved all too effective on sportsfields too but at a cost. In rugby it was banned because of the injuries it caused.

In the world of racing finance, as in love and war, all is fair. Betfair have gifted The Horsemens Group a quarter of a million pounds. A nice gesture and a meaningful chunk of change. Given that the money comes from the purse that is filled by Betfair’s offshore operations and which used to be directed straight to Racing in the form of a voluntary levy (until the BHA baited them into withdrawing it), the move looks like a classic ‘flying wedge’ manouvre to me.

Betfair had previously gone way beyond the call of duty, and the law, by paying levy on their British racing based turnover that was handled through their offshore office on Malta. Perhaps unsurprisingly they took a dim view of Paul Roy attacking Betfair (who were voluntarily paying an ‘offshore levy’) using figures provided by (the equally offshore leveraged) William Hill firm who of course weren’t coughing up a dime. A bit like taking lectures in loyalty from Wayne Rooney.

Betfair withdrew their voluntary levy and promised to spend the money as they saw fit within Racing. Well, here’s the first play on that front from the Betfair team tacticians. £250,000 for the Horsemens Group which has been, somewhat gingerly, accepted.

Not so very long ago a senior player at one of our best known tracks told me ‘of course we like Betfair, they’re the only buggers with any money’.

So the racecourses like Betfair’s money and so do the Horsemen. Any problems with that?

Well, just this small trifling issue. Paul Roy, Nic Coward and Paul Dixon have told us that the analysts at Deloitte failed to understand that the issues of exchanges and of ‘offshoring’ were ‘the two biggest issues’ impacting Racing’s financing and their levy submission. Nic Coward has argued that this oversight by Deloitte is ‘bizzare’.  

Anyone who has actually read Racing’s submission to the Levy Board will know that of the nine page executive summary only a couple of paragraphs refer to these ‘two key issues’ and that they figure nowhere in the three alternative arguments in favour of a ‘target levy yield’ that Racing goes on to make.  That on it’s own would make Coward’s claim itself look bizarre.

What makes his claim look frankly laughable is that the Horsemens Group and the racecourses have both shown that they are very happy to take the exchange penny. They will take the money in the shape of quarter of a million pound wedges, they will take voluntary levy payments, they will take it in the shape of on course in running players betting on track, provided they rent the facility . They will take it in the shape of racecourse and race sponsorship. They will certainly pocket any seven figure bonuses on offer to them as owners and they, in the case of well known Horseman Paul Roy,  will happily bet the farm on the exchange’s future prosperity.

As I’ve said before on this blog don’t let anyone kid you next week that the failed Racing submission is down to the BHA alone. The chairmen of the Racecourse Association, The Horsemens Group and the BHA were all signatories to Racing’s submission. Paul Roy’s push-me, pull-me position on exchanges is the most public of course but Betfair’s adept use of the flying wedge has scattered the supposedly unified ranks of Racing and exposed what lies beneath. What lies beneath.

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One Response to “The Betfair Flying Wedge”

  1. ken cambs Says:

    It’s only since following your blogs, Sean, that I’ve begun to take a wider interest in the shadier politics of horse racing. Yet, even in such a short space of time it’s become abundantly clear to me that the racing industry is in utter turmoil.

    There seems to be no real leadership or clear sense of direction. Various Machiavellian groups seem intent on either inflicting self-harm injuries whilst simultaneously stabbing each other in the back.

    It would be interesting to read your thoughts on what you think the solution might be to achieving some semblance of overall fairness and reality to meeting the needs of the ‘industry’ as a whole, from the lower echelons of the sport right up to the corridors of power. Or is it the case that too much damage has already occurred and we are all just witnessing the gradual decline of the sport of kings?

    On the somewhat less than generous Betfair donation. Many years ago I was involved in conducting some research into a particular area of public concern. I was determined that it would be completely objective and free of any bias and present a true picture of an issue which was causing some emotive public and media disquiet.

    However, the project required substantial funding and I had only one resource available to me. Putting aside my reservations I successfully obtained the necessary funding from a source directly accused of being the perpetrators of the problem I was researching.

    Despite all my best intentions and impeccable research techniques I know for a fact that the monies did have some impact on my psyche. After all, how could I possibly kick my generous benefactors in the teeth? I’m sure my post-research public pronouncements must have been influenced to some small degree by my inner desire to be gentle in my criticisms.

    Which is why the Betfair donation should be returned with a “Thanks, but no thanks” message. In my eyes, Paul Roy is no longer a credible ambassador for the sport having tied his fortunes in with Betfair. By the same token, The Horsemen’s Group has contaminated itself with the spores of suspicion.

    On a slightly different note, I notice that on some of the stocks and share forums there already seems to be some reservations about this new kid on the investment block. Some comments appearing to suggest that not enough is known about the nuts and bolts of the Betfair mechanisms. Reminds me of an old friend who was a second hand car dealer. He had a moderate sized showroom with just a handful of cars. I’m not sure whether it was an attempt to impress the public or to massage his own ego but he had every wall fitted from top to bottom with mirrors. Anyone then passing would be fooled into believing that his stock was tenfold. Sadly, it all ended in tears. Something to do with ‘you can fool some of the people etc.’

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