The long awaited verdict from the International jury over the cheating allegations against Oracle Racing has now been delivered. The America’s Cup defender was found guilty of illegally modifiying its AC45 cats and has been dealt a series of fines, crew bans and a points penalty in the America’s Cup itself.

The issue relates to illegal modifications that were made to the king posts of the team’s AC45 one design cats which were found to be too long and found to be carrying additional weight inside.

After a detailed investigation by the jury, Oracle Racing has been ordered to pay total of $250,000 in fines split between two charities. Five team members have been dealt penalties ranging from a wrap on the knuckles, to a ban from participating in some or all of the 34th Americas’ Cup. The team members involved include Bryce Ruthenburg, Andrew Walker, Kyle Langford, Matt Mitchell and Dirk de Ridder.

The team will also be dealt a two point penalty come the America’s Cup match that starts on Saturday. This penalty sees the team lose two of their wins, (should they do so), before they can start putting points on the board. The result is that to win the34th America’s Cup Oracle racing needs to win 11 races while Emirates Team New Zealand only needs to win 9.

Here in San Francisco the chatter is currently focussing on whether the penalties are severe enough as people start to digest the 30 pages of reports on the hearing. There is, as you’d expect, plenty of discussion as to how much damage the findings will have done to the reputation of the defending team and some of its team members as well as the PR damage to an event that has been beset with problems.

Never has an America’s Cup started with the defenders losing points before the racing had even started. It’s not a good look for an event that some fear could degenerate into a game of last man standing as teams struggle to get their complex, fragile boats around the course.

But the issue that no one seems to be able to resolve is whether the penalty will make any difference to the racing. If the Kiwis are blisteringly quick then the event will simply be over sooner than previously expected with two fewer victories to notch up. If the reverse is true the Cup will take a day longer to decide. The problem is that no one has a definitive view on the relative performance of the two teams. As one team member said, “I guess we will have to have a yacht race to find out.”

For all the angst and stress that has surrounded the 34th America’s Cup so far, the fact that there is no clear favourite is the one thing that many are hoping will turn the event around and produce a true needle match.

The tension here in San Francisco is palpable and is only going to grow as we count down the last few days to the Cup.

An Oracle Racing statement reads:

Today, the America’s Cup Jury announced that one Team USA sailor, our primary wing trimmer, and two shore crew have been excluded from further participation in the 34th America’s Cup. This penalty was assessed because of a rules breach occurring in early 2012, well over a year ago, involving modifications to the team’s AC45 yachts, not the larger AC72 yachts that will be used in the America’s Cup.

The Jury has also penalized the team by deducting two races from Team USA in upcoming the 34th America’s Cup. That means Team USA will have to win 11 races to win the America’s Cup while Team New Zealand will only have to win nine races.

“The rules infractions involved only a few of our 130 team members, and were done without the knowledge of either our team’s management or the skippers who were driving the boats,” said team CEO Russell Coutts. “While we disagree with the unprecedented penalties imposed by the Jury, we have no choice but to make the necessary changes to personnel on our race boat and do our best to use the next four days for the new team to practice and get ready for the start of the 34th America’s Cup.”