Ronin,
You are making one big mistake in your presentation and that is you bring ethics up as a rule. Ethics are no rules (unless you bet with the Irish cvnts of Tradebetx). If I see on BetFair that some gambler makes a huge error by laying some bet at 100-1 instead of 10-1, should I then just say to myself: Oh, I am not going to bet that, because it is unethical and that is against the rules? No way, look at it the other way round, imagine me myself making such a mistake, do you think I have any chance of having that bet reversed? So do me a favour and stop talking about if the bet should stand based on ethics! I will go even one step further; imagine if the bettor knew which stunt Michelin was going to pull up. Is he still allowed to bet? If not, why are horse trainers then everywhere in the world (apart from Japan) allowed to bet on their own races? They should always have inside information.
Now back to the incident. If the guy would have backed the drivers with William Hill, he would have been paid and no questions asked! Why, because in their rules it clearly states that the parade lap is included in the race, so there was a sufficient no. of starters and all bets stand. In this particular case the bettor decided to bet with some low life that does not have clear rules, so the bettor gets fvcked.
By the way I think this whole saga is absolutely fantastic! Imagine if it concerned BetRoyal and not Olympic. The moderators in this forum would then be jumping up and down that this is the clear example of how one sould not bet with a sh*t book, becuase of their unclear rules, etc. This whole saga proves once again the hypocrisy to the max. I love it!