He may once have been Billy Connolly's manager, but for the big multi-national betting chains, dapper Scots toff Henry Spurway is no laughing matter. In fact, the former casino owner, vaudeville promoter and racehorse owner is their worst nightmare. He is the man who looks set to change the face of punting forever.

I spoke to Spurway shortly after a Scottish judge had thrown out a case against him brought by William Hill. It may turn out to be one of the most significant decisions a judge has ever taken on betting. Basically, in a unique experiment in Edinburgh, Spurway has pioneered easibet.net, a truly revolutionary 'onestop shop' for punting. As well as the usual cash bets, punters can also indulge in in-running bets and lay selections to lose in a way that used to be the exclusive preserve of bookies. In the near future, thanks to a tie-up with Sporting Index, they will also be able to spread bet in Spurway's gambling emporium.

The shiny new £500,000 flagship facility in the city's Tollcross area has a bank of 14 terminals with broadband connections and a room of traders scouring the world to find the best value, whether punting or laying. As Spurway says: 'The whole set-up is more like a stockbrokers' office than a traditional bookies.' It is, in truth, more like a cross between a newspaper office on deadline and a day-trading hothouse.

'We've got a rank of traders, one from Bell White, another from London, another a Chinese specialist,' he says, 'but the emphasis is very much on online betting, although we do have cash betting for those folk who can't use a terminal.

'But we're finding that many of our customers run what amount to self-contained businesses working for themselves from our terminals - we are merely the facilitators. We've got a few really successful punters already: one made £16,000 last week, another made £30,000 in three months and a third made £90,000 in the same period.

'For these guys it's like a day in the office - a very exciting office, mind. We even have a café selling food and cappuccinos and the like, so they don't even need to go out. And we're now finding that most of our terminals are being booked up in advance by the same names: people who are basically personalised owner-occupiers.'

But how, I asked, does he intend to make money - or is easibet.net a cunning Starbucks or Pret À Manger corporate stalker in deep cover? 'No-one's going to get rich selling coffee or baguettes here.' He laughs, then returns sharply to his serious and businesslike manner.

'Ours isn't exactly a no-risk business, but it is completely transparent. We charge £20 for a four-hour session on the terminal and between 3.5 per cent and 7 per cent on the cash betting. But that's great value because we dig out the best prices from around the world. Take yesterday: we had one horse that was 40/1 with SIS and we had two customers, one from Liverpool and one from Edinburgh. We managed to find them odds of 105/1 with a bookie outside the UK who simply didn't fancy the horse. That's a staggering service.'

Although this is his third chain of bookmakers - he owned the Larkspur chain of eight betting shops in central Scotland before selling them to a Birmingham-based bookmaker in 'a multi-million pound deal' less than two years ago - Spurway now believes that the traditional bookmaking business is in irrevocable decline. Within ten years, he reckons, the rise of betting exchanges and the degree of computer literacy among punters will mean that the high-street bookies, as we now know them, will be all but defunct.

With the nationals now having bought virtually every independent bookmaker in an effort to dominate the market, Spurway believes that they will now move in force into betting exchanges. Yet the canny Scot already has plans in place to be the man leading this revolution. As well as his Edinburgh operation, he has also bought a site in central Glasgow and has well-advanced plans to open a third branch in Dundee. If he is to be believed, Spurway will have opened over 100 branches within five years.

Donald, where's me punters?
Even were it not for the inroads already made by Betfair - who control about 90 per cent of the UK exchange market of 200,000 active users, matching 12,000 bets a minute - it's little wonder the bookmaking big boys are running scared at Spurway's vision of a world where punters get more choice and pay a smaller percentage to the middleman.

'I've had a vast amount of support from the punters. They recognise that this system is fairer than the traditional bookies because this way it's actually the customers who make the price and then we match them. After they've named the price they want, we try to find it and, if we can't, then their money is safe in their account.

'This is another step towards a future where the industry as a whole will have a bigger turnover but less profit. The nationals are taking so much out of the game at the moment, but this way there will be a lot more money left in the pot - instead of taking out 10p in the pound, exchanges will function on a margin of 2.5 per cent.'

This perhaps explains why Spurway has found himself in court. With no way of exerting pressure in the usual manner - easibet.net doesn't run a hedge fund as traditional bookies do, and its only supplier is Betfair, which has over £100 million of liquidity per week - this was surely the only way for the big bookies to stick a finger in the dyke protecting them from the betting exchange deluge.

This is a development which threatens the traditional bookmakers, so it was no surprise when William Hill took official umbrage with Spurway in Scotland's Court Of Session. They argued that the decision of Glasgow and Edinburgh City Councils to grant him a license was unlawful because they disagree with the government's contention that exchange users - in other words Spurway and Betfair's customers - should technically be licensed on the same basis as bookmakers under the 1963 Gaming Act.

It was also no surprise that they named Betfair - thought by many to be the real object of their ire, and the party they ultimately wanted to put on the stand - in the law courts. What did come as a surprise was that the case against Spurway was thrown out ('disposed of' in court parlance) last month without so much as a by-your-leave from the courts. A surprise to everyone except Spurway, that is.

In fact Spurway is now almost used to battling through the courts to get his ground breaking scheme off the ground. In January this year EasyJet founder Stelios Haji-Ioannou, who has either registered or is in the process of registering 500 different trademarks featuring the 'Easy' prefix, settled out of court on legal advice after bringing a case against Spurway for passing off. The budget airline magnate had already successfully sued the owner of the easy4car.com website, but found himself stumped by Spurway's clever use of the alphabet - had he tried to trade under the name easybet.net, he would have been a sitting duck, but taking the easibet.net option put him in the clear.

Och aye the noo way of betting
Should Spurway prevail (and there now seems no reason why not), the end result could be that many of the small independent bookmakers who have been gradually forced out of the market or bought off, could be back on the high street in a new guise. In the week that I spoke to Spurway, he'd already had bookies from Wales, Ireland, Jersey and most corners of England come to see him, several with proposals to take his betting exchange formula to their areas.

Although the bookmaking world is a small one, and one in which Spurway has made tsunami-sized waves visible from the Cayman Islands, there is also no doubt that his flamboyant personality has contributed to the speed with which news of his legal and commercial triumph has spread.

Yet if the racing world instinctively loves an underdog, Spurway is no gifted amateur or lucky dreamer. A former head of the successful Scottish radio station start-ups, Forth and Clyde, he has an impressive business pedigree. He also got a two-furlong headstart in life: currently the owner of a grand estate in West Lothian, he is the well-connected, Fettesian son of an Etonian father and a scion of one East Lothian's most established old families. Spurway even acts as the honorary bookmaker to the Scottish parliament. Indeed, rumour has it that Robin Cook and Alex Salmond see more of him than they do of their partners or constituents, and although Spurway laughs at the suggestion, it was Cook who helped force attheraces.com to restore Spurway's feed after it had been unilaterally cut.

Yet while he may have been born with a canteen of silver spoons wedged in his mouth, the man is also so personable, enthusiastic and palpably right that he has still managed to win the backing of most of those who have witnessed the bull-necked way he has taken on the bookmaking establishment. Equally enjoyable was the way he cocked a snoop at Stelios at the height of the EasyJet passing-off action by naming his new horse easibet.net and buying two new personalised number plates: EA51BET and EA51NET.

Spurway is a regular at all Scotland's racecourses and a voluble activist on the sport's behalf, and he knows how important his racing credentials are: 'I'm in this game because I like a punt and because I've gambled all my days. You couldn't possibly want to go through all the hassle I've been put through if you didn't really enjoy gambling,' he laughs. 'Basically, I just really enjoy gambling on all sports.

'I named my last chain of shops Larkspur Racing after the horse that I backed heavily won the Derby in 1962 at 22/1. I had lumped on at 50s. That's the sort of day you never forget, but I just love the whole rigmarole of gambling; it's how I have fun.

'Take the Scottish Parliament thing. That just started out as a bit of fun, but it was great to be the first to put up prices for when (First Minister) Henry McLeish would go. We were getting bets for several thousand pounds from little Ayrshire mining villages where there were obviously people with insider information, but that's all part of the grand game. It was the same last year when you had a bunch of asylum-seekers who were staging break-ins all over Scotland. We ran a book on them being caught within 28 days, and started off at 33/1. Within a couple of days the odds were 7/1, but they never caught them, so I kept the lot!'

A tee-totaller with a mischievous sense of humour, Henry Spurway has led a life less ordinary. From youthful playboy to Edinburgh casino owner in the 1960s and then a successful bookie, he has lived life to the full, yet still seems to have an insatiable appetite for pushing the boundaries. It is, he says, what keeps him young.

'At one stage I was (singer) Andy Stewart's manager when he died, and I was also Billy Connolly's promoter on his first major tour,' he remembers. 'I looked after lots of acts in those days, including Johnny Logan, who won the Eurovision Song Contest, and Sidney Divine. That may have been a different life, but what it had in common with easibet.net - and everything else that I've done - is that I've always had great fun. For me, easibet.net isn't a quantum leap from my past work because it's still within the leisure industry. More importantly, I'm still having fun.'

That, undoubtedly, is more than can be said for the men in the huge, London-based bookmaking behemoths. They're all worrying about what they can do to stop this mad Scot from turning their world upside-down.