Welcome to the bi-weekly column of Geoff Banks — CEO of Geoff Banks Bet and leading gambling expert in the UK. Not afraid to put his views forward, he is a proudly independent bookie and more than happy to take on the big bets.
This week we hear of the departure of two major betting firms from the on course market. Ladbrokes and Coral, who have been betting on UK racetracks for decades. It is a disappointing development, although hardly surprising, since these companies have been operating those pitches at a significant loss for some years now.
Was that, however, the determining factor in their decision to withdraw from the UK market? Well I’d argue their expenses were of little real concern. Even if their portfolio of pitches was operating with a six figure loss annually, this was pale in significance to the real benefits they enjoyed as betting companies on track.
In the simplest terms both companies (and the also-departed William Hill) were in the betting ‘sample.’ These are the ten or so bookmakers who offer prices on racetracks, whose odds were accepted by the starting price returners, and transmitted to the off track market. Such firms were chosen on two criteria: Did they lay a meaningful wager? And did they offer standard place terms in every race?
So for more than a decade now, and certainly after the notable departure of Big Mac from our screens, these companies have used their influence on the starting price mechanism to improve their profits in the vastly critical off-track businesses they operate. The monies they could take on track were but a tiny drop in the pool of monies taken in their shops, or online. Control the starting price, and you can have a horse returned at 6/4, instead of 7/4, simply because you are more respected than the likes of on course pure exchange traders like Rocky Roberto.
As Bic Mac sadly became an irrelevance, his pressure on bookmakers to offer punters the fairest and most competitive odds deal disappeared. This was particularly true of his unstinting opposition to ‘industry prices.’ Those odds set by online gambling companies themselves.
Personally I see no benefit to the huge online gambling industry in being in any way tied to the cottage business that are racecourse bookmakers. They trade in a fundamentally different manner to their off-track counter parts, who are far more in the business of traditional risk.
As industry odds have taken over from odds from the track bookmakers, so the necessity for the supermarket betting companies to maintain a presence has become mute. With their departure I believe the starting price mechanism should be removed from the tiny on-course market.
What is the future for the remaining bookmakers on course? Unfortunately, as I alluded to earlier as to the manner of their trading, bookies no longer make a book in the traditional sense of the word. The vast majority ‘trade’ the wagers they take on betting exchanges to create additional margin. Finding a bookie prepared to buck Betfair odds on track has the same price as Elvis to return from the grave.
Additionally, finding a layer on the racecourse prepared to offer ¼ odds in all handicaps has become increasingly rare. Personally I have always seen it as critically important to offer the standard place terms and compete with online companies (even my own!), there were a few layers who agreed with that point of view. Unfortunately the diet of excuses from the huge majority of layers as to why they saw 1/5th the odds as adequate in major handicap races has worn my patience, and those of their customers, very thin over the years. What my colleagues simply cannot grasp is the basic concept that they need to compete head on with online firms, not betting exchanges, in an era of betting apps. This head in the sand approach to basic business concepts defies logic.
To boot racecourse bookmakers, being so aligned to betting exchanges, all too often offer a uniformity of price that the casual punter finds boring. A traditional ring, in the absence of bookmakers trading bets, offered wide variances in odds which customers enjoyed shopping for.
As a notable aside, many bookmakers, and their staff dress in an increasingly casual dress code these days. Something I always found as disrespectful to their clients.
I totally get the small firms argument that their expenses are arduous. And I respect their persistence in providing a service in all weathers, and in doing so adding flavour to the ring. However, their refusal to put their heads together and come up with a system which appeals to customer ideals better will result in their continuing decline on UK racetracks. As evidenced clearly by their serious decline in their turnover. They are too poorly led, too mired in backward business models, to survive in their current form.