The Disciplinary Panel of the British Horseracing Authority (BHA) held an enquiry on 10th July 2012 in relation to the activities of Mr Jason Parfitt and Mr John Spence and the lay bets they placed on races in between 11th March and 5th October 2010.
1. Topics for Enquiry
1.1 The Panel enquired into the following issues:
1.1.1 Whether or not Mr Parfitt, a registered owner, was in breach of Rule (A)41, by committing a corrupt or fraudulent practice by laying NORISAN and/or SOCCERJACKPOT (USA) with the benefit of Inside Information relating to the prospects of the geldings in relation to races on 11th March 2010 and 1st May 2010.
1.1.2 Whether or not Mr Spence, a registered owner in 2010, was in breach of Rule (A)36 of the Rules of Racing by communicating Inside Information to Jason Parfitt for material reward, favour or benefit in kind about NORISAN and/or SOCCERJACKPOT (USA) in relation to races on 11th March 2010 and 1st May 2010.
1.1.3 Whether or not Mr Spence is in breach of Rule (A)37 by assisting and/or causing the commission of a corrupt and/or fraudulent practice by Mr Parfitt (namely placing lay bets on NORISAN and/or SOCCERJACKPOT (USA) with the benefit of Inside Information by communicating Inside Information to Mr Parfitt knowing that or being reckless as to whether or contemplating as a real possibility that Mr Parfitt will use it for such a corrupt and/or fraudulent practice.
1.1.4 Whether or not Mr Spence is in breach of Rule (E)92 by laying ST SAVARIN (FR), a horse owned by Burnham Plastering and Drylining Ltd of which Mr Spence is a Director, to lose in the win and place markets in relation to a race on 5th October 2010.
2.1 At the outset of the Enquiry, Mr Spence admitted that he was in breach of Rule (E)92 and set out the basis for his admission, namely that the lay bet was made in error and was a genuine mistake.
3. Background Facts
3.1 On 11th March 2010, NORISAN ran in the Higos Insurance Handicap Hurdle at Wincanton. The gelding was trained by Alan Jones, a licensed trainer, and owned by Burnham Plastering and Drylining Ltd, a Recognised Company, of which Mr Spence is a Director. Mr Parfitt layed the gelding using his Betfair account. Prior to this race his account had been dormant since 20th October 2006. The sum of £1,416 was risked in the place market to win £74.
3.2 Prior to the race, at 15.13, a deposit of £10,000 was made into Mr Parfitt's Betfair account. (The only other previous deposit into the account was made in July 2006 for a sum of £200.) At 15.29, Mr Parfitt layed NORISAN in the place market at prices ranging from 16.5 to 22.6. NORISAN was not placed in the race. The liability incurred on the account was almost four times larger than the second largest lay liability and, moreover, the account had not previously placed any bets at odds as large as those placed on NORISAN.
3.3 On 1st May 2010, Mr Parfitt layed SOCCERJACKPOT (USA) a gelding trained by Mr Jones and owned by Burnham Plastering and Drylining Ltd. It ran in the Toteplacepot Maiden Hurdle at Uttoxeter. The sum of £14,001 was risked by Mr Parfitt in the place market to win £2,104.
3.4 Mr Parfitt placed a series of lay bets on SOCCERJACKPOT (USA) in the place market which were successful; the gelding was pulled up with two hurdles left to jump, due to bleeding. After the race, the racecourse veterinary surgeon confirmed that SOCCERJACKPOT (USA) had burst a blood vessel and that it had bled from the nose during the race.
3.5 The BHA was contacted by Betfair very shortly after this race in relation to the unusual and suspicious betting activity by Mr Parfitt. This was by far the biggest bet on Mr Parfitt's Betfair account since its inception in 2006, and more than twice the next biggest lay liability on the account. The bet was by far the biggest single lay bet on SOCCERJACKPOT (USA) in the Uttoxeter race and represented over 80% of the market opposition on SOCCERJACKPOT (USA). Betfair froze Mr Parfitt's account due to concerns that the bet was suspicious.
3.6 Prior to the enquiry, Mr Spence was interviewed by BHA Investigators. He confirmed that prior to the 1st May 2010 race, Jones had told him that SOCCERJACKPOT (USA) had bled in training and that he was not confident of a good performance.
3.7 Mr Spence admitted to knowing Mr Parfitt and said that Mr Parfitt would phone him every time that he had a horse running, including on race days, asking him for his views on the horse's likely performance.
3.8 Mr Spence's assumption was that Mr Parfitt was using the information he passed to him to decide whether or not to back a given horse. He said that it had not occurred to him that he might use the information to decide whether to lay a horse, and only became aware of this on the eve of his interview with the BHA, when Mr Parfitt telephoned him to tell him what he had done.
3.9 Mr Spence said that whilst he could not remember telling Mr Parfitt about the difficulties SOCCERJACKPOT (USA) had in training, it was possible that he had done so.
3.10 When Mr Parfitt was interviewed by BHA Investigators, he confirmed that he knew Mr Spence and Jones, but he denied having spoken to any of them about SOCCERJACKPOT (USA) before the 1st May 2010 race and denied speaking to any of them on the race day. He said that his business, selling cars, had been doing reasonably well and that was the basis for his increase in risk on his Betfair account. He said that he had not realised how much money he had committed on SOCCERJACKPOT (USA) until the Betfair screen had told him that his account had reached its limit. He said that the reason that he had placed the lay bets on SOCCERJACKPOT (USA) was because he had a theory that horses trained by Jones do not come in the first three if they are not backed early in the day. He admitted sometimes to placing a cash bet on Mr Spence's behalf on other occasions but stated that the Betfair account in question was solely his and the risk on the bet was entirely his own.
4. Telephone and Betfair Records
4.1 Mr Parfitt and Mr Spence provided telephone records to the BHA. The records show that on 10th March, the day before the Wincanton race, Mr Parfitt called Mr Spence twice and texted him once. On the day of the race, Mr Parfitt texted Mr Spence at 10.11, before depositing £10,000 in his Betfair account at 15.13, Mr Parfitt logged on to Betfair at 15.15 and made four lay bets between 15.19 and 15.35. During that period, at 15.20, Mr Parfitt called Mr Spence for a period of 45 seconds. Mr Parfitt texted Mr Spence during the race at 15.36.
4.2 In relation to the race at Uttoxeter, where SOCCERJACKPOT (USA) was layed, Mr Parfitt called Mr Spence four times and texted him prior to the start of the race. Mr Spence called Mr Parfitt once and texted him prior to the race. The call was at 15.36 and took place whilst Mr Parfitt was placing his lay bets on SOCCERJACKPOT (USA). Mr Parfitt conducted 51 transactions on Betfair between 15.26 and 15.49.
5. Betting Analysis and Oral Evidence
5.1 The Panel received written and oral evidence from Tom Chignell, a BHA Betting Investigator. He presented details from Mr Parfitt's Betfair account to the Panel; 88 bets were placed on the account from 26th July 2006 to 19th October 2006. Those bets made a total profit of £177. 16 of those bets were lay bets, which had an average liability of £119 and the largest lay liability during that period was £297. No bets were then placed on the account until 11th March 2010. The 5 bets that were placed between March 2010 and 1st May 2010 were significantly different from the 88 previous bets. Most of the bets placed in 2006 were back bets, whilst all 5 bets in 2010 were lay bets. The largest liability in 2006 was £297, whilst the largest in 2010 was £14,001.
5.2 In relation to SOCCERJACKPOT (USA), Mr Chignell told the Panel that in his view betting on SOCCERJACKPOT (USA) was "extremely suspicious". Mr Parfitt layed SOCCERJACKPOT (USA) at prices ranging from 4.3 to 13.2 in the place market, and in the four minute period between 15.37 and 15.40, the account aggressively layed the gelding in the place market from prices of 5.24 out to 12.66. Those bets were matched at prices which appeared completely out of context when compared to the win market price.
5.3 The fact that Mr Parfitt was willing to lay the gelding, whose win price was 18.5, at odds of 12.66 in the place market was, in Mr Chignell's view, extremely suspicious and demonstrated an exceptional confidence that the gelding would not finish placed. In his view it demonstrated 'a willingness to lay the horse irrespective of price'.
5.4 Mr Parfitt's account made up 82% of the total liabilities taken on Betfair and his bet dominated the market and forced the gelding's price to increase. There was no previous pattern on Mr Parfitt's account to show that he layed a horse because it has not been gambled on, which was Mr Parfitt's original explanation to the Investigating Officers for the basis of his bet.
5.5 In respect of the Rule (E)92 allegation against Mr Spence, Mr Chignell gave evidence which contradicted Mr Spence's explanation of events. Mr Spence had asserted that he placed the lay bets on ST SAVARIN (FR) by mistake in that he would have probably been accessing his Betfair account from his office and he would have been busy and on the 'phone. He thought he would have probably pressed the wrong button on the screen with the intention of backing ST SAVARIN (FR) but layed the gelding in error.
5.6 Mr Chignell explained to the Panel the sequence of events from Mr Spence's Betfair account. Mr Spence had placed 6 lay bets on ST SAVARIN (FR) prior to the race on 5th October. 4 of those lay bets were in the win market and 2 in the place market. Mr Spence went on to back ST SAVARIN (FR) heavily in the place market, placing a further 13 bets on ST SAVARIN (FR) to win and 3 bets on ST SAVARIN (FR) to be placed. By the time the race started, Mr Spence was an overall net backer of ST SAVARIN (FR).
5.7 The first lay bet placed by Mr Spence was at 15.02. when he entered a stake of £200 at a price of 9/4. Of that stake, £95.44 did not get matched and at 15.03. Mr Spence then cancelled the £95.44 bet and submitted a new lay bet of £95.44 at an increased price of 9.6. That bet did not get matched and again, Mr Spence cancelled the bet and increased the price of his lay bet to 9.8.
5.8 Mr Chignell explained that if Mr Spence believed he was backing ST SAVARIN (FR) as opposed to laying ST SAVARIN (FR), he should have reduced the odds of the bet in order to get his bet matched. Mr Chignell also noted that the lay bets were made in both the win and place markets, which suggested that Mr Spence did not simply repeatedly press the same button by mistake, but rather had exercised a degree of thought in relation to what he was doing.
5.9 The Panel heard oral evidence from Mr Parfitt. He said that he had been retained by Mr Spence to back horses for him, and the reason why he had layed NORISAN and SOCCERJACKPOT (USA) was that he knew Mr Spence was not going to back them, and he took a decision to take a calculated risk that the geldings would not win. He said that Mr Spence did not tell him to lay the horses. He explained that Mr Spence used to transfer money to his bank account and he would keep a 10% commission on any profit made from winning bets. He said that he only made back bets for Mr Spence and primarily used the high street bookmakers when placing bets. Mr Parfitt said that the arrangement had come to an end a couple of months ago, since there was a big bust up when Mr Spence found out about the issues regarding NORISAN and SOCCERJACKPOT (USA). When asked about the "significant sum" that was layed on SOCCERJACKPOT (USA), Mr Parfitt said that he kept pressing the green button and did not realise how much he was betting until his account limit was reached. In respect of the telephone calls around the time of both races, he said that Mr Spence would have been calling him to discuss other horses.
5.10 The Panel also heard from Mr Spence who confirmed his arrangement with Mr Parfitt, namely that he would ask Mr Parfitt to back horses for him and allowed Mr Parfitt to keep 10% commission on any winnings. He trusted Mr Parfitt to get the best prices for him. He said that he did not lay horses as a rule and had only ever layed horses by human error or mistake. He said that he could not be held responsible for Mr Parfitt laying his horse and asked the Panel to note that Mr Parfitt had admitted that he had "done it off his own back".
5.11 He said that he was very disappointed with Mr Parfitt's actions and since then he had little to do with him in respect of horse racing. He admitted that he had asked him to place a bet in respect of a rugby match and a football match.
5.12 On being questioned about ST SAVARIN (FR), Mr Spence said that he had layed the gelding in the win and place market by mistake, probably when he was distracted in his office being a busy time at work after lunch. He said that he did not intend to hedge or manipulate the market.
5.13 He confirmed that he talked to Mr Parfitt about his horses and indicated when he wanted him to back them. He also explained that Mr Parfitt used to ring him to try and encourage him to back his horses and he would explain to him whether he would. He had assumed that if Mr Parfitt was betting, he would be following his lead and backing the horses he was backing. In relation to SOCCERJACKPOT (USA) he said he could not recall whether he told Mr Parfitt that the horse had bled previously. Until these events he felt Mr Parfitt was a "trusted friend".
5.14 Regarding the phone calls during the race days, Mr Spence said that the calls were probably in relation to Mr Parfitt asking him to bet on another horse.
6.1 Having considered the evidence carefully, the Panel made the following findings:
6.1.1 That Mr Parfitt was in breach of Rule (A)41 of the Rules, in that he committed a corrupt and fraudulent practice in relation to racing in Great Britain, by laying NORISAN and SOCCERJACKPOT (USA) with the benefit of Inside Information relating to the prospects of the geldings in the 11th March 2010 and 1st May 2010 races.
6.1.2 In relation to Mr Spence, that he was in breach of Rule (A)37 of the Rules by causing the commission of a corrupt and fraudulent practice by Mr Parfitt (namely placing lay bets on NORISAN and SOCCERJACKPOT (USA) with the benefit of Inside Information in breach of Rule (A)41) by communicating Inside Information to Mr Parfitt, being reckless as to whether Mr Parfitt would use it for such a corrupt and fraudulent practice.
6.1.3 In respect of Mr Spence's admitted breach of Rule (E)92 of the Rules, in that he layed ST SAVARIN (FR), a horse owned by Burnham Plastering and Drylining Ltd of which Mr Spence was a Director, the Panel found that the facts underlying the breach were that Mr Spence intentionally layed the gelding. The Panel did not believe Mr Spence's account that the lay betting occurred by human error or mistake.
6.1.4 The Panel did not find Mr Spence in breach of Rule (A)36 of the Rules.
7.1 In making its finding that Mr Parfitt used Inside Information to lay NORISAN and SOCCERJACKPOT (USA). The Panel were persuaded by the following key factors:-
7.1.1 Firstly, the extreme confidence displayed by Mr Parfitt in his betting activity. He took risks which were completely out of character with his normal betting patterns, both in the win and place market.
7.1.2 In relation to SOCCERJACKPOT (USA), he was clearly willing to lay the gelding, irrespective of the price. In the Panel's view, he wanted to match every possible bet because he was confident, through the Inside Information he received, that SOCCERJACKPOT (USA) would not be placed.
7.1.3 The Panel had no confidence as to the veracity of the account provided to them by Mr Parfitt. When questioned by the BHA's Investigating Officers, he informed them that he layed NORISAN because he did not "fancy it" and layed SOCCERJACKPOT (USA), on the basis of his belief that Jones trained horses, if they were not backed in the morning, they would not win. His betting account showed no evidence of such practice.
7.1.4 Before the Panel, Mr Parfitt provided a new explanation that his choice was informed by the fact that Mr Spence was not backing the horse. The Panel did not believe his explanation. The preferred explanation put forward by the BHA, in respect of the evidence, was that Mr Parfitt chose to lay NORISAN and SOCCERJACKPOT (USA), since he was in possession of Inside Information which gave him the absolute confidence that these horses would not be placed.
7.2 Having made this finding, the Panel went on to consider who had provided Mr Parfitt with the Inside Information. Mr Spence admitted before that he may have told Mr Parfitt that SOCCERJACKPOT (USA) bled on the gallop. By Mr Spence's own admission, he was in frequent contact with Mr Parfitt and provided information to him about his horses concerning which ones he wanted Mr Parfitt to back for him. Mr Spence told the Panel that he had never told Mr Parfitt to lay his horse. The Panel accepted this evidence. The Panel noted that Mr Parfitt and Mr Spence were in frequent telephone and text communication prior to and during the days of both races in question. The Panel concluded that Mr Spence had been careless in the manner in which he passed information to Mr Parfitt in relation to backing horses, and through that carelessness, Mr Parfitt had been given enough information from those conversations which gave Mr Parfitt the confidence to lay the geldings. The Panel concluded that Mr Spence had shown a careless disregard for the Rules in his conversation with Mr Parfitt and through his actions, had provided Inside Information in breach of the Rules.
7.3 In relation to ST SAVARIN (FR), the Panel had to decide whether or not the lay bets (4 win and 2 place) were intentional or as Mr Spence submitted, were as a result of a mistake and human error. The Panel concluded that the lay bets were intentional. In its view this was not a mistake of a single click of a button on a computer screen, this was a course of action composed of 6 separate bets. On 2 occasions, Mr Spence cancelled the bet and resubmitted it at a higher price, in order to get his bet matched. This was not the action of a careless gambler. If Mr Spence had genuinely thought he was backing the horse and his odds were not being matched, then he would have cancelled the bet and decreased the odds in order to seek to get them matched. He did the opposite and raised the odds twice.
7.4 In making its decision, the Panel was aware that Mr Spence had been warned on two previous occasions about lay bets on his horses. In June 2004 and June 2006, Mr Spence layed the same horse, MIGHTY MINSTER. His explanation on that occasion was that he was unfamiliar with how Betfair worked and would have layed the horse by mistake. The Panel would have been prepared to find against Mr Spence in relation to the facts re ST SAVARIN (FR) alone. The additional information regarding MIGHTY MINSTER further reinforced the fact that Mr Spence should have been acutely aware of this issue and should have cancelled the bet or failing that and discovering the error later, informed the BHA of what had happened. Neither action occurred on this occasion.
8.1 Having made its findings of fact, the Panel considered the issue of penalty. It noted that the entry point in respect of Mr Parfitt, for breach of Rule (A)41, was 3 years in the Guide to Procedures & Penalties 2012. In 2010, when the offence was committed, the entry point in the Guidelines was 18 months disqualification. The Panel determined to adopt the 2010 Guidelines in fairness to the respondents.
8.2 The Panel considered, whether in relation to the circumstances of Mr Parfitt's conduct there were any aggravating features. It identified several issues, namely there was more than one episode of utilising Inside Information, and also the sums involved were significant. The Panel also noted to Mr Parfitt's detriment, the differing accounts that he gave to the BHA investigating officers and put before the Panel.
8.3 The Panel therefore determined that the appropriate penalty was 2 years disqualification from Wednesday 25th July 2012 until 24th July 2014. This reflected the Panel's adoption of the 2010 entry point, but provided for an increase in respect of the aggravating features.
8.4 In respect of Mr Spence, for the purposes of his breach of Rule (A)37, the Panel looked at the penalty for the primary offence namely that of (A)41 stated above. The Panel felt that this case did not deserve an entry point level penalty. This was not a case where an individual had determinedly and knowingly passed Inside Information to another for the purposes of a corrupt or fraudulent activity; this was a case of reckless regard of the Rules. It was a failure to keep confidential Inside Information which is a necessary part of the integrity process in the sport of racing.
8.5 The Panel therefore determined the correct penalty in respect of Mr Spence for this offence was one of 6 months disqualification. This reflected the adoption of the 2010 entry point of 18 months and a mitigation to 6 months based on the above factors.
8.6 In respect of the breach of Rule (E)92, the Panel determined that this was an intentional offence and that this combined with the previous record of lay betting were aggravating features. The fact that Mr Spence was a net backer of the ST SAVARIN (FR) went to his credit, as did his early admission in respect of the offence albeit on an incorrect basis. The Panel noted that there was no evidence of market manipulation. The Panel determined the offence should also be marked with a disqualification for 6 months - the penalty to run concurrently with that of the breach of Rule (A)37 from Wednesday 25th July 2012 until 24th January 2013.
8.7 The Panel did consider whether it would be appropriate in all the circumstances to impose a fine on Mr Spence but saw no reason to do so. The Panel felt in particular Mr Spence had been previously warned as to the laying of horses and Mr Spence could not have expected to be treated leniently in view of his earlier transgressions in relation to this issue. In making its decision the Panel is mindful of the disruption that this will cause to the 10 horses Burnham Plastering and Drylining Ltd has in training, but believes it is the appropriate course in all the circumstances to adopt this penalty.
1. The Panel for the hearing was: Matthew Lohn (Chair), Didi Powles and Sandra Arkwright.
2. NORISAN, SOCCERJACKPOT and ST SAVARIN were all owned at the time of the runs in question by Burnham Plastering & Drylining Ltd. As the director of this organisation John Spence is liable under the Rules for these animals.