Detective misunderstood the mechanics of betting

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The detective leading the police investigation into an alleged race-fixing conspiracy yesterday admitted that he had fundamentally misunderstood the betting at the heart of the case. Mark Manning told the Old Bailey that he had set out under the impression that Miles Rodgers made profits in excess of £2m by laying horses in suspect races. It was only later that he discovered that this sum related simply to Rodgers's liabilities. In reality, as the jury learned on the opening day of the trial, Rodgers lost £278,000 after risking £2.12m against the 27 horses ultimately brought to their attention.

Rodgers is one of six men accused of conspiracy to defraud customers of the online betting exchange Betfair. The others include the six-times champion jockey Kieren Fallon and two other riders. All the defendants deny the charges.

Asked to trace his mistake, Manning told Peter Kelson QC, counsel for Rodgers, that it must have arisen from initial briefings by a Betfair contact, David O'Reilly. Kelson advised him that O'Reilly had already told the jury that it was "inconceivable" anyone could confuse liabilities and profit after their conversations. Manning disagreed, and said that he was sorry that he had made no notes of their meeting. He understood the figure of £2m to be an accurate reflection of the facts as presented to him at the time.

Though he received schedules of races under review, Manning had never attempted to calculate profit or loss. Even now, the figures made little sense to him. "I'm not a gambler," he said. "I knew nothing about Betfair . . . If I had a better understanding I would not have made what, on the face of it, is a mistake."

Manning's misapprehension found its way into a series of applications to place Rodgers under covert surveillance. In his own, initial submission, in April 2004, Manning claimed that Rodgers was "making substantial financial gains". The authorisation subsequently issued by a senior officer included a suggestion that Rodgers had so far made in the region of £2m. Manning did not recall seeing this document and had no idea how his senior officer might have come up with that figure.

Later applications, during the summer of 2004, were made by another officer, who was instructed by Manning as to the "value of the fraud". The officer's applications claimed that Rodgers had made "at least £2m to date".

Under sustained questioning from Kelson, Manning claimed: "To me, this £2m figure is an extremely trivial matter." He suggested that it was immaterial to the success of the surveillance applications.

Manning also admitted that earlier this year he applied for a post with the same regulatory body that had first passed the case to the police, then known as the Jockey Club. But he had never previously disclosed any interest or even availability to its director of security, Paul Scotney, and though he was offered the post, he had now turned it down. It was "most definitely not the case", Manning said, that he and Scotney had been working on "a cosy retirement plan", as Kelson suggested.

Earlier the trainers of two of the 17 horses ridden by Fallon expressed satisfaction with his performance. John Dunlop said that Goodwood Spirit's strong finish at Goodwood in August 2004 suggested that he needed an extra furlong, a conclusion vindicated when the horse won his next start. And Luca Cumani said that Fallon had tried several "different lanes" on Lost Soldier Three at Newbury the previous day, but that the gaps had come too late.

Fallon's counsel, John Kelsey-Fry QC, asked Cumani about a letter he had written to the regulators before they suspended the rider's licence pending this trial. Cumani confirmed that he had "absolutely no complaints" about Fallon's ride on Lost Soldier Three, and that he and his patrons would have had no hesitation in using Fallon, despite the charges against him.

The case continues today.