Racing and Betting- the unhappy marriage

 

Let’s keep things simple and you’ll appreciate an honest approach here..

On Track

A few years ago, a racecourse bookmaker would rock up to Lingfield, lay the  (false) favourite to lose a reasonable sum, have the second in the market ‘sweep’ the book and win an appreciable amount of money with everything else.

These days if you tried that tactic, laying not trading bets, you’d go flat broke within a month. Racing is less competitive, mired in short fields and target driven at larger festivals. The favourite you’re laying is the result of number crunching on exchanges, mathematically it’s the most likely winner. You’d be pricing a book to exchange odds, the 100% zero margin book. You’d be taking peanuts. Most meetings these days are levy driven affairs, to such a degree the track has little incentive to actually attract people to come watch. There would be no office money from major betting firms. You’d be trading every lay on exchanges to create sufficient margin to turn a bare profit. With so few punters about, you’re pushing the envelope on prices to the enth degree, literally betting to the bones to take what you can and trade. Most punters would be using their smart phones to bet with Gibraltar. You and your five colleagues would be standing in puddles.

The zero margin you’re betting to is being negotiated to betting companies around the globe offering guarantees against SP.

The on course market, based on trading numbers, differs from the off course market, which is based on risk. It requires complete disassociation from exchanges or exorcism from the SP mechanism. The two systems are simply not the same.

 

You’d have thought major betting firms wouldn’t be interested in derivating their odds from five tiny traders standing at Lingfield in the cold. I mean it’s laughable isn’t it? Betfair sportsbook taking odds from Jolly Jack. You’d be right in thinking that such a weak market is surely subject to integrity concerns. You would be right if you surmised the likes of Ladbrokes, whose liquidity could gobble up most firms would be quite happy to offer their own odds, based on their own lays. You would imagine responsible bodies like the SP regulatory commission would be flagging up those security issues for the sake of the sport.if not the Gambling Commission, the very Kings of ‘in denial.’

But you’d be wrong. For as long as aggressive supergiants like Paddy Power threaten to ‘go it alone’ on SP’s, basically undercutting the competition – there’s no chance of industry odds. Even if it’s entirely logical and business-like. Breon, you’re missing a chance to bet well dear, and save on sacking the staff..

Perhaps you’re an owner, trainer or racetrack manager reading this and switching off to the message. It doesn’t affect you, who cares if bookies lose? You’re a first class fool if you think that. They fund the sport. Directly or indirectly you need those shabby bookies and their grubby punters to fund your entertainment, even your life.

Off track

PUT SIMPLY -RACING DEPENDS ON BETTING TO FUND THE SPORT

Aintree is one of the biggest betting festivals of the year. Allow me to highlight some of the benefits you could have enjoyed from the largest company, Bet365. The ones with the odd advert. This isn’t to drive you towards their offshore offerings, far from it! Fortunately not everyone lives for a free bet.

Their highlight deal, half your money back if your horse was beaten in the Grand National. You have to be joking surely?The premier betting heat of the year, run at a loss?

Most offers of this ilk take the form of free bets – disguised as money back. No wonder so many are enticed in. If you add in deals such as non runner no bet on ante post – the best deal ever devised by bookmakers for punters, it’s more than a golden age for punters, it’s a Cheltenham 100 million bookie bloodbath. Back Vautour in the Ryanair and the Gold Cup – you’ll probably end up with cashback for the gold cup and a 9/4 ticket about an odds on chance in the Ryanair. Think it’s a blip? Cast your mind back to last year’s Ascot.  Or Cheltenham in 2015, where the firms were one fall away from total catastrophe. As it was they lost last year on what used to be racing’s feeding bowl.

God bless Annie Power 🙂

 

It will continue in this vein. Roulette will pick up the slack, but it doesn’t fund the sport

 

On other races at Aintree recent, 365 were prepared to offer a 100% book. In laymans terms – if you backed every runner, with an appropriate staking plan, the bookmaker simply could not win. Add to this their best odds guarantee, their Channel 4 offer to give you another bet if your horse won at over 4/1, and price matching the best odds of their rivals – it’s easy to imagine a significant loss being accepted on the race. By the way, the place book was 13% overbroke in one race. A guaranteed, and significant loss.

Is there a benefit to deliberately accepting a book loss? There can be in marketing terms and their bottom line allows 365 to pay a hundred million into their own charity, so Denise can tell me to go jump. I say can, because there’s a merry go round of bonus junkies, with their associated Mothers and Sisters running around the offer companies helping themselves to a small business, and eating her lunch. Traditionally they’re the ones who do the most whining about ‘not getting on.’

In amongst the traders, though, there’s the odd nugget who likes roulette. And that nugget pays for an awful lot of junkies. We’ve seen price wars like this before, many household names will disappear – replaced by an inevitable hike in prices, and wait for it, loss in sponsors. oops – still don’t care? See Easyjet, Tui for your historical data on market share wars etc..

The impact on other bookmakers is clear – they’re forced to compete – as William Hill did at Cheltenham. Their annual report discussed a significant and self imposed loss to the old firm. The cost to Hills of their ‘we’ll match everyone’ + best odds guarantee. Sell your bricks and mortar shares is my confident tip. If you pay tax and levy in the UK – you’re a million to one to compete with those operating almost exclusively in Gibraltar  – and keep a healthy Chinese speaking team to service your new client base!

Kung Pow Fat Ker-Ching a Stoke

If you’re a punter, and you’re surprised at being restricted as soon as you show a profit, or spend your time scanning websites for the best of the prices before you wager? Don’t be surprised anymore. Money supermarket offers don’t last forever – they know what you’re looking at..

Ok, so you’re not in betting. Why should you care if these big bullies batter each other senseless and casually accept a loss on horse racing at what used to be betting’s most profitable festivals?

Because it’s a cancer on the sport. You can turn to racing right’s – as opposed to levy, but if the product isn’t profitable  – the outlook for a sport funded by betting is poor. You win the ABP battle and lose the war. 7.5% of nothing is, err, nothing.

It’s fair to say most people imagine bookmakers win all the time. Six favourites can hose up in an afternoon and I get people asking me if I’ve had a good day. Such inquisitors politely asked to get stuffed. It’s not rare to see 4 or 5 favourites oblige in a card- is that what you think drives bettors to get involved? Other folk think because Joe Coral make 150 million a year, from other products they market, that Racing is entitled to some of those profits. No idea why you should think that.

The bottom line for racing? It’s a pure marketing tool for other products, and our biggest and most profitable festivals are the new battle ground. Like the farmers selling milk to supermarkets. Undersold to further higher margin products. Gaming.

Denise Coates, let me be honest, take your squillions and go play in another yard, you’re junking the sport.

The current war between betting and racing over ABP’s and racing right would have further soured relations. Co-operating with a sport that yields less every year, but costs more to display is losing its appeal. We’re not the only sport. I know some out there think racing is amazing all the time – but the reality to punters is it’s fairly poor, most of the time.

Unless Racing structures deals with betting companies that ensures margin for those firms trading on the product. Unless racetracks stop shooting themselves in the backside by offering superfast fibre broadband to on course traders. Unless we look to rework a failing product with a focus on quality – as opposed to quantity (which we cannot deliver upon by the way!) Unless we tackle the culture of avoidance amongst the sport’s biggest stars, – we will have problems.

Next time you experience Cheltenham and watch Douvan, Vautour and Annie Power hose up at attractive odds, non runner no bet, bonuses attaching – remember racing depends on profit from bettors. You can be as snobbish as you like about the sport, but you need the punters to fund it.

 

Above – the queue for payouts 1 hour and 12 minutes after the last at Cheltenham