A strong market – dominating a weak market?
It’s right we have a scandal. But an SP regulatory body that presides over false returns from our Grand National? Say it isn’t so – but it is precisely that. A false mechanism, condoned by the controlling body, deceiving the customers of Racing – many of whom bet just once a year. What are they to think – and do those responsible for such a system understand it enough to make sure it doesn’t happen in 2016?
It is right to talk about Aintree. It was a very successful event, and our showcase race managed a few more viewers than Toffs In Boats. What an thorough non event that is in comparison to our great race. So why are we permitting anything to take away from the experience?
As a betting man, and you’ll forgive me being a bookmaker here, I fully recognise the SP return from Aintree, for our biggest betting heat as too large with an overround of 165%.
In laymans terms, this means (roughly) a bookie should clear roughly £65 profit for every £165 taken. That’s if he manages to lay every runner, a minor red herring, in actuality, the number of horses a bookie lays has considerable bearing on the overround. However, I don’t dispute journalists rights to question it. It is, though rich of those same journalists who ‘bullied’ bookmakers into betting to 5 and even 6 places in the National to complain about whether or not we profit from the principal event in the betting calendar– this has a massive effect on the potential to profit. It’s likely anyone betting to five places were hammered by McCoy finishing fifth. I’m unclear why an entire industry betting on a premier event should be subject to such criticism. Are we supposed to trade to zero profit to suit folk? Why the surprise? Not as if there’s a journalist out there who’d buy a pitch at Chelmsford City is it?
What’s also true – almost nobody takes SP on the National. It would be a fraction of the percentage of wagers laid. Even novices naturally take a price- wouldn’t you take a price rather than take the system you don’t understand- SP?
Surely as many have suggested, the bookmakers at the track who are totally responsible for the betting ‘shows’ are simply taking the punters for a ride, with a knock on effect to the considerably larger betting empires off course.
Well, the latter part will always be true – what’s good in the SP’s will benefit anyone laying bets on the event. However, the former is manifestly false.
What we’re being asked to accept, and taking the favourite as a clear example here, was that customers at Aintree couldn’t wager on the favourite to any reasonable weight of money above 6/1 at the off. Big firm reps were running round like flies backing a variety of horses near to the off, and you can take it as read they expected those sample firms to co-operate on returning a favourable SP. Is that necessarily unfair on the consumer – or a reflection of the proper weight of money off track. I will let you decide. For me, I think big betting should be part of the mechanism in the first place
Should bookies who lay some horses be ‘tugging’ unbacked horses to compensate? Well in practice they rarely have the time, and when they do, the inclination, when there’s no one there to bet to.
It’s useful to examine the Betfair returns vs starting prices – since they pretty much govern on course returns.
Shutthefrontdoor 27/1 (?) (6/1) SP
Rocky Creek 11/1 (8/1)
Soll 12/1 (9/1)
Balthazar King 12/1 (17/2)
The bookmakers at Aintree reported that 9/1 was ‘widely available’ at the track, and looking at the Betfair return(which people have suggested could be an error, bear in mind that Betfair had technical difficulties prior to the race) it’s still easy to see that offering 6/1 Shutthefrontdoor when it was evidently drifting significantly on the machine, would have made absolutely no commercial sense. We know most play into exchanges- if there were indeed such a significant ‘arb’ do we honestly believe the SP regulatory return of 6/1 or the bookmakers assertion that that return was fictional and it was at least a widespread 9/1. Why wasn’t that offer price returned?
If Shutthefrontdoor was correctly returned at 9/1 as opposed to 6/1 we would have a percentage difference, on one horse, of 4.3%! Now we’re down to 161%. If you carry this argument forward to include the other runners backed by big betting, to include certain ‘outsiders’ then the actual overround was nothing like 165%. I would hazard a guess at best prices representing about 125% with an average on board margin nearer 140% with most firms near the off.
OK, I hope I’ve convinced you it isn’t simply just the little bookies having a field day. But what is actually occurring?
The SP system is flawed . Anything that is that cheap to manipulate can only be assumed to be rife with integrity concerns, and disadvantaging consumers
Allow me to explain this point. I read on twitter and the Racing Post one James Knight, senior horse race trader from Coral decrying returns from the track. Well that would indeed be laudable were his on track operators not influencing the returns, virtually assuring a hefty margin, instead of producing their own SP’s- which would be logical – but clearly more expensive.
Truthfully, I’d like to hear a little less from the Coral PR machine. The latest utterly perverse decision, from BHA Towers, to permit Simon Clare, of Coral, the archetypal ‘wall to wall racing’ specialists, to sit in on the engorged committee on jump racing. Perhaps as a blocker to necessary and positive change to the sport? Quite why such clear vested interest is contemplated on a committee to improve racing is totally beyond me. But I digress
What started out as a fair spread around of the betting cake has warped. Of course it’s right for the big players to hedge into on course markets. And they were all emptying themselves on Saturday to ensure a variety of horses they had laid, contracted by the off time.
But what used to be an on course rep running around trying to shorten a 9/4 chance into 7/4, by first taking 9/4 – and then 2/1 and so forth until he achieved his target, has become a rather grubby exercise in manipulating returns. Now the ‘player’ walks up to bookmakers offering 9/4 and tells them privately he will take 2/1 if they go less than that at the SP. Now how is that viewed by the gambling commission?
For the track bookie, he gets to lay the horse at less than he’s offering. Right or wrong, he’s never going to turn down that is he? Should he care about the wider off course market. Since that doesn’t put bread on his table in the morning, one can’t blame them really for failing to consider that.
A couple of points to clarify. Those placing wagers for large concerns on track are naturally enthusiastic to please traders and directors of these impressive organisations by achieving goals laid down to them. The practice of manipulating weak markets by taking less wouldn’t be fully appreciated by directors of said firms. I don’t mean to tarnish the reputation of any firm in this regard, as some of their ‘cogs’ are doing their best and don’t appreciate its questionable practice.
Second, it isn’t the ‘fault’ of off track empires if the SP regulatory body has been out to lunch for decades. Why would a responsible commercial entity not continue to take advantage of a system that permits 3 grungy little bookies at Kempton to return the SP’s for a colossal empire off track?
Going back a decade, the on course market was very strong. There wasn’t the coverage of sport as there is today-competing for spectators. There weren’t the betting mediums we have today. People bet on horses by habit. Racetracks were extremely well attended. Today’s SP mechanism was born out of such healthy markets, fairly representing the weight of money.
That’s not true now. Many tracks attendances are decimated, particularly midweek, as they put on a product geared for betting. Bookmakers have become sparse and rarely take more than £500 a race turnover at such meetings, particularly at the all weather.
On track firms are basically desperate at many meetings, and large betting knows it. They throw them a bone in the knowledge they will co-operate. It’s widely accepted the practice of taking a lesser price from some firms has been going on for a few years now, it’s happened to me on numerous occasions, from different firms, and I confess up until now I had never appreciated there could be a problem. I throw myself at your mercy for my failings, as a fair man.
So what happened to the 9/1 STFD? Because the SP regulatory body has determined a maximum of 24 firms shall determine the SP’s. It’s called being ‘in the sample.’ In practice, it’s easy to know who is ‘in’, – the better, more sensible layers, who lay substantial wagers on demand at standard each way terms (ie no win only) are chosen from the rank and file. Is there a list of these put up for bookies reps to know who’s in or not? No, but it’s very easy to work it out. Are those returning SP’s doing it fairly? No.
So in practice, if you want to boss the SP of the Grand National, on several runners, you simply wager with those firms ‘in the sample’ and ignore the other 200. You bet late enough so the possibility of adjustment to other runners doesn’t take place
Final piece of the jigsaw? The large concerns are all in the sample every day, it’s in their commercial interest to bet just that bit better than the small on course bookie, and the SP returners favour their shows often disproportionately to the volume and size of wagers they are taking. They are there of course, in large part, to govern SP’s.
The SP commission for example permits a system where one company – Betdaq the exchange, governs the prices on course, via an insidious relationship with RDT. Racecourse Data Tech are a major provider (over 90%) of on course betting systems. They benefit from every hedge a bookmaker places with the exchange. Isn’t this simply a cartel?
The commission has also reduced the number of bookmakers included in the system. It allows just three tiny bookmakers, standing in the rain, betting to fresh air, to return an SP, and govern the multi-million pound empires off track. I mean honestly, how ridiculous a situation is that? Why hasn’t Lord Donaghue, the Chairman of the SPRC done something about that a long time before now?
We must have a regulatory body presiding over s system that accurately reflects the true weight of money
Who should be interested in this report? The BHA most certainly as the regulatory body in charge of the sport, the SPRC and of course the gambling commission, who’s remit is fair play, and the protection of punters as well as bookmakers.
So Lord Donaghue, – you need to read this accept the old ways are out of date. We urgently need a new and fairer mechanism
Time to move to a new and fairer mechanism, which fully integrates big betting, exchanges, tote, on course markets and racetrack bet. And not a decade before time.