THE new year celebrations started a little late for Simon Bazalgette – it wasn’t until 3pm on January 1 that he could let his hair down. As one of the most senior figures at Turf TV, a broadcaster specialising in beaming live horseracing into betting shops, he had been up all night negotiating to sign up Ladbrokes, Britain’s biggest bookie, as a customer.

At least he had been in London; his Turf TV colleague Alan Morcombe had been negotiating on a phone line while on holiday in Dubai.

They both agree it was worth interrupting the festivities to ensure the deal went smoothly. Securing Ladbrokes was the middle part of a hat-trick of deals that saw Turf TV, which had been nothing more than an idea 18 months ago, win all three of Britain’s big bookies as clients.

In so doing the start-up completed a remarkable year in which it cemented its position as a credible alternative in a market that had been dominated for years by a monopoly provider.

Before Turf TV, pictures from all 59 British racecourses were provided to betting shops exclusively by Satellite Information Services (SIS), a business founded in 1987, and in which both Ladbrokes and rival William Hill have sizeable stakes.

But when Racing UK, the subscription-only satellite TV channel, was launched three-and-a-half years ago, Bazalgette, its executive chairman, felt there might at some point be a way to expand the business into the country’s 8,700 betting shops where SIS held sway. However, it would be a couple of years before he did anything about it.

Morcombe, chief executive at Alphameric, a firm that has a niche supplying betting shops with all sorts of technology, such as electronic point-of-sale (Epos) systems, had been having similar thoughts.

Although neither can recall who first mentioned the idea to the other, both believed that a combination of their skills would give them a unique chance to challenge the existing arrangement. The concept of taking on SIS had gathered additional momentum when Racing UK ran into a legal dispute with the betting-shop broadcaster over overseas media rights to British horseracing.

As their thinking developed, both Bazalgette and Morcombe were aware that the SIS contract with a large number of courses would be coming up for renewal. It spurred them on and on December 4, 2006, Alphameric and Racing UK announced a joint venture, Turf TV, that would take on SIS and beam the sport into betting shops.

The two companies claim that the idea behind challenging the existing monopoly arose from the fact that many of the courses they dealt with were disillusioned with the service they were getting from SIS. Morcombe said: “I don’t feel that SIS was working hard enough on its relationship with the courses, and we came along with a different approach.”

This is not quite how SIS, and Bags (Bookmakers’ Afternoon Greyhound Services), the organisation that operates as a middleman selling courses’ rights to SIS, saw the prospect of a new rival. Tom Kelly, Bags’ chief executive, said Turf TV would add £50m to bookmakers’ costs “to obtain exactly the same service as it had before”.

Many racing courses seemed delighted. By the spring of 2007, 31 of them had signed up to Turf TV; six of those were able to switch over to the new service in April, with the other 25 following from January 1, 2008.

The bookies had to grapple with the possibility that unless they signed up to Turf TV they would no longer be able to screen the races from those 31 courses for their punters. The 31 included some of the best-known tracks in the country – including Ascot, Aintree and Cheltenham.

The first races shown by the new service were on April 20. The day before that, Paddy Power signed up, on the basis that it did not want its clientele to suffer. Many independents, as well as big chains such as the Tote and Better, had also agreed to take the new service, but crucially the big three – Ladbrokes, William Hill and Coral – were holding out. David Harding, then William Hill’s chief executive, angered by what he regarded as an outrageous attempt to squeeze more money out of the bookmaking industry, went so far as to describe the situation as a “war”.

That became an apt description when the three, together with Bags, launched a legal action against the start-up, alleging anticompetitive behaviour. That case, which is still pending, was met with a counterclaim by Turf TV.

The case did not deter the newcomer and this, said Bazalgette, affected the bookies’ thinking. “It got to the stage where they realised Turf TV may launch [in January, depriving them of pictures] and that required a different strategy.”

As long as all three refused to negotiate, it might not matter, but if one broke ranks the others would have to follow to remain competitive. Coral became the first of the big three to break away. Talks began in earnest last month and a deal was announced two days before Christmas. “We wanted what was best for our customers so long as we could get a deal that we were comfortable with,” said a Coral insider.

It was inevitable the other two would follow. Ladbrokes signed nine days later and William Hill joined last Monday.

As ever with horseracing, nothing is straightforward. Despite the three agreeing to take Turf TV, the wrangling is far from over.

First, some industry figures fear that costs will rise, damaging some of the smaller betting-shop operators.

More fundamentally, though, the sport remains locked in a vicious tussle with the bookies over how much money the latter should give back to the sport that provides it with a big chunk of its income (known as “the levy”). Bookmakers say that the increased costs they now face from tele-vision should be offset against their contribution to the industry. The government is set to adjudicate, possibly as early as this week. One battle may have been won, but more bad blood is likely to flow.

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