On 5 December 2013 the Disciplinary Panel of the BHA held an enquiry regarding registered owner Stephen Arnold who admitted ten breaches of Rule (E)92.2 which prohibits the laying of horses by the owner of those horses.
Subsequently the Disciplinary Panel disqualified Mr Arnold for a period of three months with effect from Friday 6 December 2013 until Wednesday 5 March 2014 inclusive. The BHA published this result via social media on Thursday 5 December.
The following outlines the Disciplinary Panel’s findings in regards to this case.
1. On 5 December 2013 the Disciplinary Panel of the British Horseracing Authority (BHA) held an enquiry into allegations that Stephen Arnold, a Registered Owner, who is a nominated partner in a Racing Partnership that owns 21 horses that run in the name of Rakebackmypoker.com, was in breach of Rule (E)92.2. This Rule forbids lay betting by owners (including all partners in a Racing Partnership) against their horses.
2. Mr Arnold admitted the breaches alleged by the BHA. These consisted of lay bets placed through his Betfair account against his horses in 10 races that took place between 18 June 2012 and 15 March 2013 at Wolverhampton, Lingfield and Kempton. He attended the enquiry and was represented by his solicitor, Rory MacNeice.
3. A Table summarising Mr Arnold’s betting on the races in question is annexed to these reasons. It will be seen from this that in all cases Mr Arnold also placed back bets on the same horses he had layed. It should be noted:-
i) that, save for one instance (CUT THE CACKLE (IRE) at Lingfield on 5 January 2013), he always risked the same or more by his back bets than he stood to gain from the lay bets;
ii) that in every instance save CUT THE CACKLE (IRE) at Lingfield on 21 November 2012 and 5 January 2013, he would lose money if the horse was beaten. In CUT THE CACKLE (IRE)’s two races he stood to make nothing from its defeat in its first race and to profit by just over £13 in its second race;
iii) that in all cases, Mr Arnold’s Betfair position was that he stood to do better if the horses won their races than if they lost.
4. Mr Arnold was interviewed by BHA Investigating Officers about another matter in May 2013. He was asked to provide his Betfair records, which he did willingly and promptly. These disclosed (as he had forewarned the Investigators) the lay betting described in the Table. He explained to them that these lay bets were part of a strategy to try to influence the early prices which bookmakers might offer against his horses. He hoped that a betting associate of his might thereby be able to get on at more attractive prices than might otherwise be available.
5. He went on to express his understanding that his strategy was not in breach of the Rules of Racing – “it just says that you’re not allowed to lay your horse and I take that as you’re not allowed to profit from your horse getting beat in any race”. This understanding resulted at least in part, he told the Panel, from his reading of the Racing Post’s reports of the Harry Findlay case in 2010.
6. The BHA did not suggest that Mr Arnold was giving a false account of his view of what the Rules of Racing allowed. And having heard from Mr Arnold himself, the Panel accepted that he had somehow come to think that he was acting within the Rules. However there was no reasonable or coherent basis for his understanding. It was not possible to divine how he came to construct a belief in the legality of what he did from what he said about the Findlay case. In any event, his subjective view of the Rules relating to lay betting was not what mattered. The terms of Rules (E)92.2 and 92.3 are clear and have been the subject of wide publicity though the cases of Mr Findlay and others. Owners cannot place lay bets against their horses in any circumstances.
7. Of course, Mr Arnold’s admission of breach of Rule (E)92.2 shows that now, at any rate, he recognises that his lay betting was wrong. Therefore the Panel’s task was to determine the necessary penalty.
8. The BHA drew attention to the Guide to Procedures and Penalties, which gives a penalty range of 3 months to 10 years disqualification with an entry point of 18 months. It was readily acknowledged that Mr Arnold’s betting (by which he always stood to profit more if his horses won than if they lost) meant that he was not engaged in any corruption. But against that they set the repeated nature of his breaches. The Panel was asked to apply the Guide’s recommendation without examining previous decisions.
9. On Mr Arnold’s behalf, it was said that there was discretion to ignore the recommendation that disqualification was the only appropriate course. Mr Mac Neice submitted that the imposition of a fine was the correct approach, and drew attention to four previous decisions.
10. It is correct that the Panel has discretion to impose penalties of a different kind of those recommended in the Guide, though such cases are likely to be rare. Similarly, it is unusual to permit reference to previous decisions, essentially because attempts to compare one set of facts with another do not provide a useful approach. Consistently with that, the Panel felt that 3 of the 4 decisions referred to by Mr Mac Neice were not of assistance. But it agreed with him that the Appeal Board’s decision in Harry Findlay’s case dated 14 June 2010 was important – it expresses general principles that should inform the approach of Disciplinary Panels to cases of lay betting by owners. This Panel extracts the following from that decision in the light of subsequent developments:
(i) there is “a clear distinction… to be drawn between a lay bet placed as part of a corrupt practice or even conspiracy and a betting strategy which has not interfered in any way with the integrity of the race and in particular the running of the horse in question.”
(ii) though Rule (E)92.2 has not been changed since that decision to reflect that “clear distinction”, it ought in principle to be a critical consideration when determining an appropriate penalty.
(iii) however, it has to be recognised that the Guide to Penalties has not been amended to provide for a penalty short of disqualification in case of “non-corrupt” lay betting, despite the fact that this was the course which the Appeal Board took in Mr Findlay’s case.
(iv) despite the lack of amendment of the Guide, this Panel was prepared in principle to impose a fine if it felt that the overall justice of the case required this.
(v) the Appeal Board in Mr Findlay’s case itself recognised that disqualification could be the appropriate penalty even if lay betting by an owner was “non-corrupt”. It referred to the publicity attracted by Mr Findlay’s case and noted that the excuses for breach of the lay betting Rule were hard to envisage for the future. And it also concluded that Mr Findlay’s penalty (a fine of £4,500) “should not be regarded as a precedent by anyone covered by the Rule contemplating a betting strategy involving lay betting”.
11. With those considerations in mind, the Panel proceeded to evaluate the present case. A number of features indicated that the penalty should fall well below the 18 month disqualification entry point, and perhaps should even just take the form of a fine:
(i) Mr Arnold took no steps to conceal his lay bets. They were placed openly on his account and he readily disclosed them to BHA Investigators.
(ii) the bets were part of a strategy which cast no doubt upon the integrity of the races – they were “non-corrupt” in that sense. Even within the confines of Mr Arnold’s Betfair account, his overall position in all but one of the races was that he would not make any profit if his horse lost. In the one exception, the profit he stood to make was nominal.
(iii) generally, the lay betting figures were small. Mr Arnold said that he was in all cases matching offers already placed by other gamblers – he was not tempting people to bet by himself putting up amounts that backers could match. In all, he gained just £490 from his successful lay bets. In one case, his lay betting was unsuccessful (FROGNAL (IRE) at Wolverhampton on 9 November 2012), and obviously the gamblers on the other side of his £107 of lay bets against FROGNAL (IRE) have profited from them. (Those lay bets were at odds averaging 8/1).
12. Against those matters, the Panel had to weigh other considerations. Mr Arnold is a knowledgeable and committed racing man with a considerable background in the sport. His error in thinking that lay betting by an owner could be permissible as part of his betting strategy was a bizarre one. There has been ample publicity for many years to make all owners, and particularly experienced owners, fully aware that any lay betting by them against the chances of their own horses is a serious breach of the Rules. This was not a one-off breach, but a series of breaches occurring over a nine-month period. Further, there were losers as a result of Mr Arnold’s impermissible lay bets to the modest tune of £490. (This is a factual distinction between Mr Arnold’s and Mr Findlay’s cases: in the latter the lay bets all lost). Finally, the Panel felt that the wider interests of effective regulation of the sport require that disqualification should be the usual penalty even in many cases of “non-corrupt” lay betting by owners, to avoid lengthy investigations of motive in any given case. It is readily acknowledged that some mistaken lay bets might attract penalties short of disqualification. But Mr Arnold “mistake” in this case was his oddly acquired belief that his betting strategy was permissible, rather than for instance any error in keying his instructions to the Betfair website.
13. Balancing all these factors, this Panel concluded that it was necessary to impose a disqualification, but that it should be at the lowest end of the range indicated in the Guide. Mr Arnold was accordingly disqualified for 3 months with effect from Friday 6 December 2013 until Wednesday 5 March 2014 inclusive.