Racing: Betting braced for big bang: A new form of wager may prove a Trojan horse for beleaguered backers - Richard Edmondson explains the pluses and minuses of spread bets

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THE virtual reality of Rorke's Drift has arrived. Just as punters may have got the idea that all the bookmaking troops storming the financial battlements have been identified, a new wave has appeared on the horizons.

Sporting Index, the leading purveyors of sports spread betting, are the new kids on the block. Sports spread betting, the child of a system that has worked in the City for many years, is a refreshing, if dangerous, departure from fixed odds speculation.

The main plank of this betting is that punters can either 'buy' or 'sell' about an eventuality. For example, Sporting Index's most popular bet concerns the fate of favourites. The company have a grading structure of 25 points for a winning favourite, 10 for a second and five for a third, and, before racing, sets a spread of, for instance, 70 to 73 points.

If a punter believes the favourites will not do well, he would 'sell' at 70; conversely a backer with faith in the market leaders would 'buy' at 73. If the favourites totalled 65, a seller would win five times a unit stake ( pounds 5 for pounds 1), while a buyer would lose eight times a unit ( pounds 8 for pounds 1). Earnings, as well as liabilities, are high, though there is a built-in safety limit in most instances.

For those in a financial and emotional trough early on in a card, Sporting Index update prices after each race to allow punters to defray costs by either buying after they have sold, or selling after they have purchased. 'You can take your loss just like a share,' Compton Hellyer, the company's chairman, said.

Hellyer, like many of those who both work for and bet with Sporting Index, used to work in the city, as a futures broker. Others on his team have relinquished formidable roles, such as Alistair Hunter, who would formerly have told dinner guests that he was a Japanese warrants market-maker with Warburgs.

Sporting Index was set up last year on April Fool's Day, but like all in their business they are no mugs. All customers have to supply references (checked annually) and enjoy the advantage over their fixed- odd counterparts of not having to pay tax.

As this is a regulated company, punters are safeguarded should the company go the wall, but a caveat for the less scrupulous backer is that wagers with them, unlike other layers, are legally enforceable.

Sporting Index say they now have 2,000 regular customers, and there can be little doubt that those who think of gambling as a little more than a simple financial transaction will find their different service an interesting departure.

They do not limit their services to racing and also offer a choice of bets in football, cricket, golf, tennis and rugby, among others. Hellyer insists his boys do not want to fleece the unwary, but rather maintain a regular turnover from regular clients.

It could well pay to remember Virgil's words here, though, the ones that greeted the large equine entity left outside the city of Troy: beware of Greeks bearing gifts.

There is, however, one golden rule to remember for those who enter this market. Human nature always seems to demand a favourable result and those at Sporting Index usually find that their spreads are 'bought' at the higher end. If you bet with them, 'sell' the spreads to avoid selling the silver.