Champion jockey among 16 held by police in race-fixing inquiry

At six o'clock yesterday morning, Kieren Fallon should have been thundering along the scenic gallops above Newmarket at the start of another ordinary but enriching day at the peak of British horse racing.

At six o'clock yesterday morning, Kieren Fallon should have been thundering along the scenic gallops above Newmarket at the start of another ordinary but enriching day at the peak of British horse racing.

The 39-year-old champion jockey was to perform his normal riding-out then travel to York to ride in six races, starting off with the catchily named Patrington Haven Leisure Park Handicap.

By the end of the day, his earnings should have topped £4,000. But, as dawn broke over the jockey's Suffolk home, other matters interrupted his routine.

Instead of riding thoroughbreds, Fallon, a millionaire Irishman widely held as the leading jockey of his generation, was under arrest and in an interview room at a Suffolk police station.

Detectives from the City of London Police spent five hours questioning him about an alleged conspiracy to defraud the racing industry of several million pounds by fixing more than 80 races over the past two years.

The arrest of Fallon along with 15 others in simultaneous dawn raids - including two other jockeys, a high-profile trainer and a millionaire former bookmaker - came after months' of rumours and adverse publicity about the probity of the £20bn horse-racing industry.

Police are said to be investigating the activities of a syndicate of racing professionals and businessmen using one of the new generation of online "betting exchanges", which allow punters to back horses to lose as well as win.

Mike Bowron, assistant commissioner of City police, whose fraud unit is leading the investigation, said: "This case is of great national significance, not just to the racing community but to the wider public throughout the UK."

The arrest of Britain's leading flat-racing jockey, along with Yorkshire-based trainer Karl Burke and jockeys Fergal Lynch and Darren Williams, who were also to ride at York, sent shockwaves through the racing establishment.

By midday, forensic officers combing Fallon's sprawling bungalow in the village of Cowlinge, close to Newmarket, had removed sacks of documents and a computer. More computer equipment was also seized at other addresses as 130 officers from five forces simultaneously executed 19 search warrants from North Yorkshire to Hertfordshire.

The Jockey Club, racing's governing body, which had originally been in charge of investigating irregularities in races involving some those arrested, admitted last night that the alleged scam threatened to damage the standing of the sport in Britain, which attracts an estimated £12bn a year in bets and investment from abroad.

Paul Scotney, a former senior detective who leads the Club's security department, said: "What had started as an investigation into possible breaches of the rules had uncovered evidence indicating criminal activity which could undermine the integrity of horseracing."

Detectives are understood to be investigating links between jockeys and trainers and several wealthy businessmen, including professional gamblers, after a series of unexpected results in races which also netted large wins on the largest betting exchange, Betfair.

The advent of the internet betting exchange has been credited with revolutionising gambling in the past four years by allowing punters to bypass traditional bookmakers and bet between themselves.

Services such as Betfair, which has 90 per cent of the British exchange market and 200,000 clients, act as meeting places for gamblers to place bets by offering or accepting competing odds on anything from the winner of a horse race to the scorer of a goal in a football match. But critics of the online industry, in particular the established bookmakers, say the system is vulnerable to corruption at the highest level by allowing gamblers with inside knowledge that a horse is not to going to win to "lay" or accept bets for it to lose.

Chris Bell, the chief executive of Ladbrokes, said last month: "I am convinced that at least a race a day, if not more, is now being corrupted by the availability of [gamblers to] lay horses to lose on [internet] betting exchanges."

In March, Fallon, was suspended from racing for 21 days for deliberately easing off and allowing another horse, Rye, to win at the last Lingfield race.

Hours before the race, the rider, who has been champion jockey six times and is the Queen's first-choice jockey, had allegedly told undercover reporters from the News of the World that his horse, Ballinger Ridge, would lose despite being favourite, and Rye would win.

When the race attracted betting worth £1.5m on Betfair, the newspaper's executives alerted the Jockey Club, which passed the information to City police. Sources involved with the investigation said that this "audit trail" had produced a link between stakes laid on Betfair and at least one of the jockeys arrested yesterday.

Fallon, who was released on police bail and ordered to attend a police station in October, last night insisted he was innocent of any race-fixing offence. His solicitor Christopher Stewart-Moore said the jockey had been questioned about a meeting with an individual while travelling between races

Mr Stewart-Moore said: "Kieren Fallon has not been charged with any offence. The circumstances that relate to his arrest involve an individual whom Kieren Fallon has met on one occasion and whose name he did not even know at the time the meeting happened. In the circumstances we do not anticipate this matter will be taken any further by the police."

Fallon, who leads the jockey championship and has won 17 races in the past fortnight, is no stranger to controversy. The man from modest beginnings in Co Clare first fell foul of the racing authorities in 1994 when he was banned for a week for striking another rider with his whip. Later that year, he was banned for six months when he was caught on television pulling a fellow jockey off his horse.

Five years ago, Fallon, who has three children, parted company with Henry Cecil after an untrue newspaper report of a relationship with the trainer's wife. Last year, he was treated for a drink problem.

A GUIDE TO BETTING EXCHANGES

By Iain Fletcher, author of "A Spread-Better's Diary"

Q: What are they?

A: They work like the stock market but for sport. There are "back" and "lay" prices. You back if you expect the horse to win and lay if you expect it to lose.

Q: How do you bet that a horse will lose?

A: You lay a horse at a price - say 3-1 - and accept a stake level. If the horse wins, the stake layer pays out at 3-1 multiplied by the stake. If it loses, they keep the stake.

Q: So punters are now cheering horses to lose?

A: Yes, but they always were. If you back a horse to win you want all the others to lose.

Q: Who uses betting exchanges?

A: Internet-savvy punters mostly but also on-course bookmakers.

Q: How big a business are they?

A: Betfair, which is the biggest exchange, has on average 50,000 active clients a week and matches over £50m in bets. It began in June 2001.

Q: Have exchanges made it easier to cheat?

A: Maybe. Exchanges have agreements with governing bodies such as the Jockey Club and the ATP and provide a clear audit trail. There is no anonymity, as there can be betting in high-street shops. It is, however, easier for a jockey to lose than to win. The risk is there but it always has been.

Q: Has cheating increased since exchanges started?

A: Nobody knows. There does seem to be more scandal, but this could be because those who do cheat get found out. Also high-street bookmakers dislike exchanges, so blame the exchanges for any misdemeanours.

Q: Are exhanges good for racing?

A: Racing needs betting to survive. All bookmakers, including the exchanges, have to pay a levy based on profits (15 per cent) and without that the sport would struggle.