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Result on an Enquiry heard by the Disciplinary Panel (R. Drye & H. Webster) on Tuesday 18 May
                                             

Result on an Enquiry heard by the Disciplinary Panel (R. Drye & H. Webster) on Tuesday 18 May


14/06/2021 @ 14:30:00

9.30 am - Patrick Chamings 

1. On 18 May 2021 the independent Judicial Panel of the British Horseracing Authority (BHA) held an inquiry to consider allegations that Robert Drye and Helen Webster, the owners of NEAR KETTERING had placed lay bets against their horse in races at Thirsk, Sedgefield and Kempton on 16 August, 29 August and 22 October 2019 respectively.

2. Of necessity and by agreement the hearing was virtual. Tomas Nolan presented the BHA’s case and both Mr Drye and Ms Webster were represented by Jeremy Phillips QC. No objection was taken to the composition of the Panel.

3. The Panel had to consider if there were the following breaches of the Rules.

4. In the case of Mr Drye:

(i) was he in breach of old Rule (E)92 by placing lay bets against NEAR KETTERING before and during its races at Thirsk on 16 August and Sedgefield on 29 August 2019?
(ii) was he in breach of old Rule (A)37 by assisting, encouraging or causing Ms Webster to place lay bets against the horse in those races?
(iii) was he in breach of new Rule (J)9 by placing lay bets against the horse before its race at Kempton on 22 October 2019?
(iv) was he in breach of new Rule (J)24.5 by assisting, encouraging or causing Ms Webster to place lay bets against the horse before that race?

5. In the case of Ms Webster:

(i) was she in breach of old Rule (E)92 by placing lay bets against NEAR KETTERING before and during its races at Thirsk on 16 August and Sedgefield on 29 August 2019?
(ii) was she in breach of old Rule (A)35.9.1 by allowing Mr Drye to access and use her account with Betfair to place lay bets against the horse before and during those races?
(iii) was she in breach of new Rule (J)9 by placing lay bets against the horse before its race at Kempton on 22 October 2019?
(iv) was she in breach of new Rule (J)13 by allowing Mr Drye to access and use her account with Betfair to place lay bets against the horse before that race?

6. The “new” (ie current) Rules came into effect on 1 September 2019, which is why the old Rules are applicable for the first two races and the new Rules are applicable for the third race. Nothing turned on the differences in wording.

7. By their Claim Response Forms dated 29 December 2020, both Mr Drye and Ms Webster stated that they admitted the breaches but not on the basis presented by the BHA. At the outset of the hearing it was confirmed by Mr Phillips QC that both of his clients admitted the breaches. He made it clear that whilst Mr Drye and Ms Webster were aware that there was a Rule prohibiting lay betting by owners against their horse, they did not believe it to apply to the betting strategy they adopted in the three races. Their desire was, according to them, that the horse would win and that they would not make an overall profit from the lay bets which were part of the strategy if the horse should lose. In essence Mr Drye and Ms Webster admitted to what they saw as technical breaches of the Rules but maintained that they understood the Rules were aimed at owners who placed lay bets with a corrupt motive and the overall intention that the horse should lose.

8. The BHA accepted at the outset of the case that the lay bets against NEAR KETTERING were not placed in the hope or expectation that it would be beaten in the races. However, they submitted that profits would have been made from the lay bets in the first two races if the horse had lost, and said that the gambling strategy, involving 192 lay bets placed in the three races, involved breaches of the fundamental Rules of Racing.

9. The Panel heard evidence from Mr James Moore, Principal Betting Investigator for the BHA, and from Mr Drye, as well as considering the contents of a large number of documents and the written submissions of the parties. Mr Drye was given leave to refer to Excel spreadsheets during his evidence to demonstrate points he wished to make. Ms Webster was not called to give evidence, it was explained by Mr Phillips QC that she was unlikely to be able to add anything to the evidence given by her partner Mr Drye.

10. In summary, the factual background is as follows.

11. Mr Drye and Ms Webster have lived together in West Yorkshire since about 2009/2010, and recently had a child born in November 2020. Mr Drye had been interested in racing, specifically racing at Cartmel, since childhood. It has long been a place for family holidays. Since 2005 he has sponsored races there. In 2010, he bought his first racehorse in his name alone and shortly after bought two other horses which he shared in partnership with his father (who had initially instilled in him a love of racing at Cartmel in particular) and in partnership with Ms Webster. Ms Webster did not come from a racing background. By about 2013, Mr Drye had five horses in training, three of which he owned in partnership with Ms Webster. Mr Drye’s Betfair account at this time had made large profits and attracted premium commission rates of 20% or so. Ms Webster’s account on the other hand had made heavy losses. They decided for financial reasons to leave horseracing in 2013 and for the next five years they did not own horses or follow the sport.

12. By 2018, Mr Drye’s business as a self-employed IT consultant was enjoying success and on 16 November 2018, he and Ms Webster used their Redivivus Partnership to buy NEAR KETTERING, then a 6 year old gelding. Mr Drye owned 99% and Ms Webster 1% of the partnership.  They sent it to be trained by Ms Sam England. Its first nine runs for them were unsuccessful, and it “tumbled down the weights” according to Mr Drye. However, by the time it ran in the first of the races with which this inquiry was concerned, at Thirsk on 16 August 2019, expectations were high as their betting shows.

The Betting

13. A total of 192 lay bets were placed against NEAR KETTERING by Mr Drye and Ms Webster in the three races. It was clear that these were part of a betting strategy that Mr Drye had evolved, and which is described in more detail later.

14. In the first race at Thirsk, a 1½ mile handicap with 13 runners due off at 20:05 hrs on 16 August 2019, there were 18 lay bets placed on Ms Webster’s Betfair account starting at 18:55 hrs. Both Mr Drye and Ms Webster were responsible for placing these bets. By 20:01 hrs (ie just 4 minutes before the scheduled start time), the total layed volume was £187, for a risk of £11,317. That equates to an average price of 60.52/1 (or 61.52 in Betfair terms). The individual prices taken varied between 55 and 73.63. The last of the pre-race lay bets was at 20:01.08 hrs - a £10 liability matched at 69.39. In all, by the time this phase of lay betting came to an end, the Drye/Webster liability amounted to 28% of the market. During this first phase of Mr Drye’s strategy, a few back bets were placed on other runners whose prices had been at or close to NEAR KETTERING’s price.

15. At 20:01.49 hrs, they began to back their horse. In all, 66 bets were placed before the start which was at 20:07.17 hrs. Initially, relatively small stakes bets were placed, but these plainly caused the odds to tumble. Within 2 minutes the price had contracted to between 20 and 25. The larger back bets followed and by the time these were matched a few seconds before the start (at Betfair prices between 6.89 and 5.31) a total of £16,036 had been risked to win £170,723. The average odds were 10.65/1 (or 11.65 in Betfair terms). Most of the back betting was in the win market, though there were some each way bets also.

16. After the start timed at 20:07.17, the third phase of Mr Drye’s strategy began. There were two lay bets placed in running at prices of 1.99 (a risk of £9,900 to win £10,000) and 1.5 (a risk of £5,000 to win £10,000). The timings indicate these were placed (in very approximate terms) 3 furlongs and 9 furlongs after the start. Both were matched.

17. The net position, according to the BHA’s betting investigator James Moore, was that Mr Drye and Ms Webster stood to win £144,505 if the horse won and £4,151 if it lost. NEAR KETTERING did win. Those figures do not take into account the £459 of back bets on two other runners which were matched at the time when they were laying their own horse prior to the start.

18. Mr Drye made some wide-ranging criticisms of the figures produced by Mr Moore and made a general attack on his competence both in the lengthy pre-hearing Claim Response Form and in live evidence. Practically all of that attack was concentrated on irrelevant points that did not affect the figures put forward by Mr Moore. It eventually emerged that just two points could have an effect on Mr Moore’s figures, though Mr Drye was difficult to pin down on quantifying them. He felt that the back bets on other runners should be subtracted from his prospective results. The Panel agreed that this would produce a more accurate overall picture of his result on the event. But these bets for or against other horses made no difference to the broader context, as they risked just £459 in this race. Secondly, he said that commission should also be deducted. In principle, that did not seem right to the Panel, as commission is a subject of private arrangement between the betting exchanges and their clients. The figures gross of commission are perfectly adequate for comparison purposes. Though he disclaimed knowledge of the exact percentage applied by Betfair to the account in Ms Webster’s name for this race, it was safe to work on it being about 4%, as this was seemingly what was charged for the actual outcome. Thus, even applying a deduction for notional commission on the outcome if the horse was beaten, there would have been a profit of £3,985. And if the £459 of bets on other horses were to be lost also, that reduced his potential event outcome if NEAR KETTERING lost to £3,526.

19. But as the horse won, the lay bets were lost and reduced the overall event profit from £170,723 to £144,505.

20. The Sedgefield race was on 29 August 2019 at 19:50 hrs. It was a 2 mile 1 furlong hurdle. On this occasion two accounts were used both to lay and back the horse: the Betfair account in the name of Ms Webster and a Betdaq account in the name of Mr Drye. Using his system, Mr Drye with Ms Webster’s help first placed lay bets against NEAR KETTERING. Amalgamating the figures from the two accounts, these were for a total lay volume of £998 risking £4,540 (ie at average odds of 4.55/1).

21. Shortly before the race started there was again a change of tack to backing the horse. A total of £28,937 was risked to win £97,151 (ie at average odds of 3.36/1). Then in running lay bets were placed and matched - for a combined liability of £25,000 and a potential profit of £35,000.

22. These lay bets meant that if the horse had lost, there would still have been a profit of £7,061 from the bets placed for and against it. But again there were bets placed on other horses in the race – originally 57 back bets on three runners who were market leaders along with NEAR KETTERING when backed. That, no doubt, was to try to create the impression in other punters’ minds that these other three were more favoured by the market than NEAR KETTERING. As with the Thirsk race, the amount risked on these (£1,857 after one of the three was later layed) would have reduced that profit of £7,061 if they and NEAR KETTERING all lost. However, he still stood to win over £5,000 in that event.

23. But NEAR KETTERING won again. That meant that the combined outcome for the two accounts was to show a profit of £67,628 (a little over £64,000 after deducting the different commissions charged by Betfair and Betdaq).

24. The third race took place at Kempton on 22 October 2019, due off at 20:30 hrs. This was a flat race over 1 mile 3 furlongs. The horse had run in one event in between Sedgefield and Kempton but had not then been the subject of any gamble from Mr Drye. On that occasion at Catterick on 21 September 2019, the horse finished 7th of 8 runners. The morning price was 4/1, and the starting price was then 13/2.

25. For Kempton, both the Betfair account of Ms Webster and the Betdaq account of Mr Drye were used, but the latter only had six small lay bets against three other runners, resulting in a £11 profit to the account. The figures for the Betfair account were as follows. The pattern of initial lay bets was repeated for NEAR KETTERING. 51 lay bets were placed, risking £11,632 for a profit of £302 (ie an average price of 38.48/1). Then when the switch to backing came just 4 minutes before the advertised race time, a total of 47 bets were matched, both in the win market and the each way market. In all, £14,648 was risked to win £129,654 in the win market (ie averaging 8.85/1).

26. But there was on this occasion more substantial betting relating to the other 12 runners in this 13 runner event. A total of 355 back and lay bets were placed to give a net lay position on 10 of those 12. The net lays were for risks of between £11,379 and £24,110, and 9 of those 10 risks were over £20,000. This form of betting was plainly an extension of the bets backing NEAR KETTERING.

27. There was no in running lay betting against NEAR KETTERING for this race. It never traded shorter than 5.2 (ie 4.2/1), so it is likely that that prevented the matching of lays intended at 2.0 or shorter, as in the earlier two races. There is every reason to suppose that the intended in running lays would have given a profit in the event of defeat, as had happened in the first two races. The horse only finished 6th and the outcome on the Betfair account was a net loss of £23,680.

The Panel's findings about the betting

28. It was common ground between the BHA and Mr Drye and Ms Webster that the betting in the three races was not “corrupt” in the sense that they wanted the horse to lose so as to profit from that. On the contrary, they wanted it to win for a much bigger financial return. The Panel agreed with that basic proposition.

29. A central question to be answered, however, was what caused them to indulge in the use of a betting system that involved admitted breaches of the Rules by placing lay bets against their own horse. They said that this arose because of ignorance on their part and that there was no dishonest intent. Mr Drye said he never thought of his strategy as corrupt and that he believed that the Rules around lay betting by owners were to stop corruption. This belief arose, he said, from his understanding of the Kieren Fallon case 15 years ago.

30. The Panel approached this issue with a good deal of scepticism about Mr Drye’s claim to ignorance. How could a regular gambler of some sophistication be ignorant of the clear Rule that prevents any lay betting by owners and which has been in place for well over 15 years? Also, there were well publicised cases in which owners were penalised for breach of the Rule even when the lays were part of an owner’s betting strategy that profited more from a win than from a loss. Harry Findlay’s case is one example.

31. Despite that scepticism, it was eventually decided that Mr Drye and Ms Webster were not engaging in a deliberate breach of the Rules. Their understanding of what was required of them as owners was woefully inaccurate and for that they bear the blame entirely. The Panel was persuaded to this view by their complete openness when first quizzed by the BHA about these bets, and by the lack of any hint of deception in the means they used to place the bets. They were placed on accounts in their own names, readily traceable back to them. Furthermore, the nature of the betting system used by Mr Drye provided some confirmation of this position. While the history of its use was realistically enough not investigated by the BHA, it seems to have been something he developed some time before the three races in question. He said he had employed it “hundreds of times”. So far as is known, he had not employed it before on horses he owned. It is a system which is perfectly lawful when used for horses in which he has no ownership interest. The Panel came to the conclusion that he used it for NEAR KETTERING without giving any thought at all to the Rule against owner’s lay betting. Though that amounts to grossly culpable negligence on his part, it does at least enable the Panel to conclude that he was not engaging in a deliberate or dishonest breaking of the Rules.

32. Another question the Panel addressed was the implication of the betting in two of the three races to achieve a profit even if NEAR KETTERING lost. Mr Drye was rightly embarrassed about that and sought to explain it away by saying that he miscalculated the lays in running. His evidence was that he did not want to profit from the horse losing the race, but only to get back to a level position if that happened – ie to lay enough to give him a free win bet. The Panel rejected that account. Indeed, if true, it could be seen to contradict his case that he was unaware of the prohibition on lay betting against one’s own horse. The better view is that he simply applied his strategy to NEAR KETTERING in the same way as he did (perfectly lawfully) with horses he did not own. His evidence of a “miscalculation” was not accepted. He scarcely needed to do any calculation in any event. The amount of his exposure at the end of the back betting phase of his strategy was in front of him on his computer screens. So the amount he needed to lay in running to bring himself to the “free back bet” position was obvious to him and calculated for him, if that was his aim, by the Betfair software once he chose his lay price.

33. Of course, these findings in no way absolve Mr Drye and Ms Webster from the consequences of their actions in getting to a position that gave them a profit even in the event of the horse’s defeat. On the contrary, they make their Rule breaches more serious and more blameworthy.

34. It was said on behalf of Mr Drye and Ms Webster that there were no “losers” from their lay betting against NEAR KETTERING, at least in the first and second races, because the people on the other sides of those bets actually won. That is true but ignores the wider context. The lay betting at the outset was designed, in Mr Drye’s euphemistic words, to “prop up” the market. The extent to which it did so is not quantifiable, but it can have had the effect of making more generous prices available to him when he switched to backing. On the face of it the initial lays at prices that average out higher than the average of his back bets might be thought to establish a short way to bankruptcy, but they were thought worthwhile for their influence on the later backed prices.

35. There was a further objectionable aspect to the lay betting. This was best illustrated by a question put to Mr Drye in cross-examination by Mr Nolan. Mr Drye was asked how he would feel when seeking to back any given horse in a race if he was told that the person offering to take his bet was the owner. His answer was that he would be “concerned”. This is a mild description. Any punter made aware of that fact before placing his bet would run a mile from the whole situation. That demonstrates the overriding objection to lay betting by owners against their own horse. It corrupts (or at very least appears to corrupt) the whole market, even if that owner privately intends to establish an overall back position.

26. Another issue that concerned the Panel was whether Ms Webster fell to be treated in the same way as Mr Drye. She was only an owner of 1% of NEAR KETTERING. The decisions about the betting strategy and its implementation were all Mr Drye’s. In the end, the Panel concluded that there was no reason to treat her more leniently than Mr Drye. She was not acting in a purely administrative or “secretarial” role. She had her own computer and was able to help by her own decisions about what bets to take and place. She added to the number of bets the couple were capable of making. Also, the use of her account was of benefit to them both, as her commission rate was lower than the premium rate that Betfair applied to the account Mr Drye had in his own name because of his history of success.

Decisions on penalty

37. The penalty guidance for breaches of old Rule (E)92 (applicable for the first two races) and new Rule (J)9 (applicable for the third race) gives a penalty range of between 9 months and 10 years disqualification, with an entry point of 18 months. The low point in that range was put in place in 2015: up to that time, the minimum was 3 months disqualification.

38. Mr Nolan for the BHA contended for disqualifications as the only option. He said that the size and repetition of the breaches here were aggravating features justifying an increased period above the 18 months entry point. He further said that the credit for the early admissions of breach that can be given was not appropriate here because the breaches were plain and obvious and also because unfounded challenges to the extent of the breaches were made.

39. On behalf of Mr Drye and Ms Webster, Mr Phillips QC suggested that this was a case that did not involve conduct prejudicial to racing. For the reasons given above, the Panel fundamentally disagreed with that. He further suggested that some form of deferred suspension or even a caution were appropriate penalties to consider. Those were ambitious contentions. To depart from the penalty guidance range or to impose a lighter sanction altogether, the Panel would have to find “exceptional circumstances”. Mr Phillips relied upon the lack of intention to profit from the horse losing as the “exceptional circumstance” here. But the Panel could not see that as an exceptional circumstance in principle. Further there was in fact an intention to profit if the horse lost. It was no accident that the in running lay bets produced that effect, even if the profit was going to be smaller than the gain from a win. Racing would be impossible to administer if there had to be an investigation in any given case into whether an owner who places lay bets against his horse intended to profit from them.

40. The lack of a corrupt motive or dishonesty which was accepted all round was a mitigating factor, and an important one, but not an exceptional circumstance. Along with the openness about what had happened when investigators began to look into this case, the lack of a dishonest or corrupt motive for the lay bets led the Panel to consider a disqualification period at the bottom end of the range – ie 9 months.

41. However, the whole problem arose here from a culpable ignorance of a vital Rule for the protection of the sport. That feature, together with the fact that the betting strategy was used to achieve a profit if the horse lost in two of the races, indicated the need for a longer penalty.

42. Hence the Panel decided to impose disqualifications of 12 months on each of Mr Drye and Ms Webster from 21 May 2021 to 20 May 2022 inclusive.

43. For the other charges each of them faced (breach of old Rule (A)37 and new Rule (J)24.5 in Mr Drye’s case; old Rule (A)37 and new Rule (J)13 in Ms Webster’s case), the Panel decided not to impose any separate penalty. The breaches were admitted, but the Panel took them into account when imposing the disqualifications. The breaches essentially relate to the methods they adopted to carry out their betting strategies in the three races.
 

Notes to Editors:

 
1. The Panel for the inquiry was: HH Philip Curl, Timothy Charlton QC and Anthony Connell. 

Please note, the BHA Judicial Panel is an independent body which encompasses the Disciplinary Panel, Appeal Board and Licensing Committee. It receives administrative support from the BHA via the Judicial Panel Secretary. 
Copyright © 2021 BHA, All rights reserved.


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