Bookie Geoff Banks wants big changes in the betting ring

Geoff’s last guest article drew quite a bit of interest. He sent me this one, worth reading for the passion and plain-speaking alone, although it is a bit ‘technical’ for the everyday racing fan. To find out a bit more about how Geoff’s business works, you might want to read this one before reading Geoff’s.

The ringMy last blog about modern day racing, and its sanitized ways, seemed to attract a lot of attention or hits as they say apparently. And more than a few compliments from like-minded souls, or perhaps concerned, individuals on Twitter. It’s hard to be humble when you’re as great as I am…in future my rate for such scribing shall be ten pounds an article, and I’m not budging from that.

What was absent – was the contra view. Which I expected from trainers and connections of horses boxed away in padded cells for months on end- awaiting their glory moment. Shame that. However, all is not lost. I did receive one rather hateful response from a fellah describing himself rather grandly as ‘a proper Bookmaker’ who ranted about my attitudes to modern day betting rings. He wasn’t quite brave enough to tell us all who he was, doubtless of the view should he reveal his true identity, some would have realized the true worth of his business practices.  Few punters thoroughly approve of modern day Bookmakers. The horrible truth: exchanges are the ‘good guys’ wherever they trade from. Who’s going to criticize someone for low liquidity when you’re part of the problem?

It’s perhaps helpful if I illustrate the problems as I see it in the modern ring, for those who do not understand the issues. Anyone who goes racing, midweek in particular, can’t have failed to notice the distressed state of the ring. A handful of Bookies, usually with just one member of staff each, huddling for warmth whilst serving but a few customers. In an environment where racetracks claim attendances overall are holding up, it’s a paradox that rings are so quiet. Of course, were I the RCA, I’d be talking up the product. And yes, if they don’t address the problem of stable stars retiring as 3 year olds or worse sitting out for Cheltenham, they’re going to have attendance issues, we’re agreed on that. On a Saturday, and at the major meetings however, the crowds still look good to me, but the public aren’t betting as they used to.

Or perhaps they are. I mean who goes racing these days and doesn’t have a bet? Racing’s pretty dull if you don’t have some kind of interest other than an anoraky view of form or breeding. Why does the Queen have so many ladies in waiting when she’s in attendance? Quite right, they’re running her bets out! She’s no fool. Loves a Union Jack does the Boss. Everyone’s having a play in reality. Because if you’re racing, and not betting, you must be wondering what all the fuss and noise is about!

As to the Punters, they’re just getting bored. 98% of Bookies these days have turned to trading as a simple and cheap method of making a living. From the moment the interminably ignorant Rob Hughes, of the then controlling Levy Board, cast his vote in favour of opening up the Ring to outside influences-in particular exchanges, the die was cast for the Bookies. Led by ‘pioneers’ like Martyn of Leicester, who I recall describing it as the new Holy Grail to me one day.

Many leapt from odds, percentages and margins, to trading every dollar they took with an exchange, at better odds. Presto, easy money – minimal risk. At the outset the gap between the odds offered by the trader and the exchange was wide, and the method simple. It was a golden time. As the years progressed, with traders chasing a diminishing pound, and their own silly greed for every bet available, the odds soared to the punters. Traders found with what profits could be engendered, squeezed so tight, they couldn’t breathe. Even when the crowds were good, they moronically bet so tight to the exchange, the profits, if at all, were derisory.

18-03-2013 15-10-30

In the same period, liquidity on exchanges fell markedly. Now we had a situation where Traders would offer 7/1 about a horse trading at 8.2 on the exchange but only to £20. Lord-A-Mighty if someone asked for a couple of hundred each way- a bet far larger than they could stand, trade or even dump with the few proper Bookmakers betting to opinions. Casually they knocked the larger punters back, without thought for their future. They turned to following the exchange win price, but restricting the place returns, making something off of that book instead, tossing casually away years of agreements and the code laid down by Tattersalls.

This code was, and still is, respected in betting shops and credit offices and even improved upon. They laid off staff, and finally stopped going in some cases, altogether. So when ‘a proper Bookmaker’ tells me I shouldn’t be going about criticizing their business plan, I have to laugh. Proof of the pudding is in the eating. It gives me little pleasure to be proven totally right. I said this operandi would fail on every platform available to me, to whoever would listen and many who would not. If there’s no work – you’ve failed.

I’ve covered the traders, what about the views of my customers? First off, make no mistake, I like a laugh with my punters, especially when they lose – but I don’t mind the jibes when I do either! It’s part of the fun of betting with the old enemy. Because I am, the old enemy in all but age… I still offer odds which reflect my views and I don’t knock back bets from genuine punters, ever.

Why aren’t the punters flocking to a ring where they can very often beat an exchange price and pay no commission? Because my friends, like me, they’re so famously bored of a ring with rows of Bookmakers betting like soldiers – all offering the same odds. There’s no variety or choice. It’s uniform and drab. Worse it’s an exchange driven Cartel. Most Punters believe the Bookmakers win, whatever the result. If everyone has the same price- it appears like price fixing. They disapprove of restrictive practices such as 1/5th odds on the National, and traders who dress as if they’ve just stepped out of their front rooms.

And worse, they just want the fun of a bet. It really makes little difference to them whether a horse is 5/1 or 4/1 when the nags are toiling up the straight. One of the loudest punters in the ring I love, little Tommy, makes the most noise. He doesn’t bet big, but to him it’s still the buzz, and I love him for his enthusiasm. These days, customers are afforded little of the respect of past days, when Giants like John Banks and Stephen Little battled them with a smile, a thumping bet at their odds, and a tie.

I offer two thoughts for punters at this stage, out of balance. If you moan about poor place odds and you give those Traders who offer them your fiver each way at 1/5 the odds on the Cambridgeshire because they are 17/2 about something which is 8/1 elsewhere, then you’ve only yourselves to blame for supporting them, in any race.  I believe you should identify the culprits and never bet with them, period. That’s how you rid the ring of scoundrels without the business acumen to appreciate exchanges aren’t the savior, but their death knell. Oh, and tell your friends.

18-03-2013 15-23-07

Second, although I enjoyed the banter from Big Mac, even if it occasionally made no sense, the culture of moreism always has a price, go for service over value, every time. Think I fly Ryanair if British Airways head in the same direction?

Fine, I’ve given my thoughts. What of the future? For those leading Bookmakers these days, and for the empty vessels in the ring, standing looking at the tumbleweed, bitching away, and blaming everyone but themselves for the problems, I offer these solutions.

Number one; allow the racetracks to dictate the terms of business in the rings. Fundamentally to restore order on place markets, introduce a guaranteed minimum lay to lose amount for each ring. This stops traders betting to pennies, offering unsustainable odds, and knocking back the larger punters. It’s so tiresome to hear dinosaurs claim tracks ‘shouldn’t be allowed to dictate the terms of business.

What a narrow view, especially as even now, they already do! It’s hardly in the favour of racetracks to do away with the draw of their betting rings, is it? Chesterbet is a success, but only in parallel with Bookmakers bringing the punters to play into the track in the first place. On their own, and without a ring, tracks – whilst they can deliver on the bet at more restrictive odds – can’t deliver on the flavour and atmosphere people in this country enjoy about the ring so much.

Think that Simon Bazalgette and Charles Barnett are rubbing their hands with a go it alone approach? They’re no fools. They would prefer a symbiotic relationship. Every time we say no to their requests for improved service standards, they become just a little more unsympathetic to our problems. They will naturally turn their vast expertise in running business, into taking Betting under their wings and employing people like me to show them how it’s done successfully. And yes, I would, if the alternative is to stand amongst a bunch of fiddlers trading dollars in their jeans.

Number two, for racetrack bosses. Extinguish the cosy little relationship between RDT (betting software provider for on-course bookies) and Betdaq (betting exchange), with software capable of skillfully enabling traders to hive off bets at lightning speed to the exchange. Do away with track Broadband & Wi-Fi altogether. Outlaw data cards, secondary laptops and hand held PDA’s for Bookmakers. No, it’s not air tight, but it does go an awful long way to restricting the ability to trade with exchanges. Especially at festival meetings where mobile phone networks like Vodafone do a total runner.

Fundamentally, switch off the exchange displays on laptops provided by companies such as RDT and return rings to a lower tech environment. Give serious pause for what I’m advocating if you value a vibrant ring, its draw and income. Stop worrying about losing a few traders who do not approve of restrictions. Believe me, they’re no loss! Enfin, if you’re showing exchange odds on a big screen at your Racetrack, you’re doing yourselves no favours. It isn’t about price.

Number three Bookies, get into the modern day age of cashless societies and find Bank’s willing to offer the new fast generations of swipe debit cards to enable punters to bet without the need to queue for hours and days at cash points.

I accept there will be a variety of views out there to this. If you’re a hard working Bookie, you have my respect for your efforts, but you’re going nowhere, if you don’t adapt, and you know this is true. If you’re the blinkered sort, who believes the Son of John Banks got here through luck rather than focusing on service standards. Or if you’re worried someone else in the ring on a mobile will break the mould and have a huge mass of punters at his joint, whilst you have nothing, then you’re missed the point.

Geoff Banks

Geoff Banks

It is greed, and an unworkable long term business plan that got you here in the first place. You have to work as a collective, rather than a series of individuals, and you have to act now and stop thinking of what’s good for you, but what’s best for the customers you’ve lost. The tracks have the power to lay down sensible practices, if you’d only let them. One thing’s absolutely for sure, the one you’re using right now has failed, miserably. I don’t think anyone could argue with that. For those that view some of the points as ‘legally challengeable’. I point you to the free for all 2008 Gambling Act. Good luck in Court trying to get a decision as to what is, or isn’t legal anymore, because the Gambling Commission certainly can’t.

One final point, Bookies. Just a few years ago, many of these points were laid down by the NJPC articles. I don’t recall anyone at that time complaining, or challenging the terms. We can change, and we must, if the whole shebang doesn’t migrate to GoodwoodBet in a very short time.

Geoff Banks

March 2013

About Steeplechasing

Writer, horse-racing fan, cyclist, consultant, entrepreneur. Worked at Aintree, SiS, The Tote, Ladbrokes. Created scoop6. Now run Gamtrain Ltd

Posted on March 31, 2013, in General and tagged . Bookmark the permalink. 13 Comments.

  1. Re place or each-way terms – ever considered going the Australian way and just having separate boards for win & place. Gives the punter more freedom to have more on the drum if so inclined and the miserly bookie’s terms are there for all to see…

  2. You will never abolish the exchanges now. The traders are happy to milk price liquidity bringing the prices down for the normal Joe Punter. The morning prices are shrinking so fast due to these penny pinchers.

    The top of the market fancies get backed into nothing by mid day and most of the time there is no value to grab at leading up to SP. Each Way betting at long odds seems to be the future for me now and I would imagine many other Joe Punters; for Its a race to get on the early prices and the traders always get there first.

  3. A good read, having worked in all aspects of the betting industry,it never failed to amaze me the arrogance of the on-course layer,I only worked in Silver Rings or for ‘money finders’ in Tatts.
    As soon as one broke ranks and offered courtesy and civility theri trade improved, I remember seeing Geoffs Father giving away free ice creams one day, a great promotion and the friendly banter with punters went down well as well as courtesy to the first time punter , not the normal “what do you want” attitude.
    I copied this manner in the shops I worked in/owned, free gifts in chocolate bars, ice creams etc, as well as always dressing smartly (not sadly as today both on and off course).
    I have seen and survived many changes,but do feel that the on-course bookmaker is a dying breed unless they ‘market’ their product in a different way (as the off-course has, compare a LBO now to one of 25 years ago).

    • absolutely correct Mo. Traders on course forgotten the values cherished elsewhere. ie the customer is king and not fodder

      • I know plenty of books who moan about the ‘concert’ days, “big crowd but just lookers” is what they say. If I had an extra few thousand near one of my shops, then I would have lots of promotional personale giving out leaflets and being cheery and of course, explaining how to have a bet, and the fun side of it.
        I have never seen or heard of any on-course firm trying such promotion,even trying to tie it in with the artiste who is appearing, staff wearing t-shirts with their names on etc.. It must be worth a try

  4. Trevor Pettitt

    Fundamental to the reclamation of the on course market requires that the racecourses recognise and acknowledge their USP which cannot be effectively replicated elsewhere. One only has to look at the deserts that are bookmaker free European racecourses for evidence of this.

    Professional racecourse bookmakers.

    Without them the British horse racing business at racecourses will continue on its terminal decline.
    The racecourse need to start recognising that the exchanges are their enemy and take effective action to reduce their influence.
    It is hard to believe that racecourses, for relative pennies in revenue, promote exchanges, for example, in customer toilets with eye level advertising. Even more unbelievable are the bookmakers who, for the price of a free umbrella, advertise their greatest threat daily on the racecourse.
    You really couldn’t write it. Imagine Ladbrokes offering to pay for a free facia sign and William Hill displaying it over their shop front and you’ll get the idea.

    Racecourses need to recognise that less is more. Less bookmakers equals more atmosphere and buzz with a increase in enjoyment and attendance.

    Again for the relative peanuts of badge money obtained by allowing the rings to be overpopulated with bookmakers the racecourse diminishes and damages itself irreversibly.

    There is nothing more of a turn off to customers than seeing hoards of bookmakers standing around doing little business and looking suitably depressed and bored.

    But the overall effect is far worse than that as, due to the overpopulation, most bookmakers cannot hold sufficient field money to make a book, which is after all what bookmaking is all about, the clue being in the name.

    A symptom of this, of course, is that many will refuse to accept unusually big bets when they are offered because they are unable to absorb them within a book without being in the position of gambling disproportionately to their turnover.

    So punters of higher magnitude go elsewhere and the cycle of decline continues.

    It is possible to buy betting pitches for as little as £100. A business for £100, looks to good to be true. Exactly, because it is. But because these business’s are associated with gambling there is no shortage of gamblers willing to buy in and stand there for a few weeks, months depending on the depth of their pockets until they realise why someone is prepared to effectively give the pitch away. And the cycle starts again, another £100 purchase, another doomed sum of money.

    So why should professional bookmakers who have been prepared to invest substantial sums of money to provide a racecourse bookmaking service care?

    Because the dilution of business caused by this constant turnaround of unviable business’s makes it very difficult for serious professional bookmakers to earn a living and have the confidence to invest and in turn provide the service that customers deserve and expect.

    Now you may say, as a punter, why should I care?

    You should care a lot. The SP is determined on course historically but the off course companies would dearly love that system to fail and for them to take over returning the SP.

    Off course control of the SP and betting shows would be disastrous for each and ever punter in the country. Fact.

    I started by saying that racecourses need to recognise and nurture their USP, independent racecourse bookmakers, and work with them to build a unique racing experience that attracts people to take the trouble to go racing and spend their hard earned money.

    They need to look at themselves and the prices they charge for attendance and recognise that in recent years these have risen, along with, in many places, car park charges and other ancillary race going costs far, far in excess of inflation.

    I believe that we need to adapt to a changing world but so too do racecourses and a good starting point would be a national committee of bookmakers and racecourse representatives to discuss these issues and to put in place a coherent strategy to stop the rot.

    In my view that cannot come too soon and, if successful, will be to the mutual benefit of racecourses, their patrons and professional bookmakers alike

  5. Excellent post Trevor. Lucid and intelligent. I will, with your leave, transmit your thoughts elsewhere too.

  6. Trevor Pettitt

    Further to my previous post I would continue on the issue of betting exchanges.

    As a lifelong bookmaker I have been involved in many aspects of bookmaking, both on course and off course over the years. I am a former director of the ABB, from which I chose to resign following the sale of my betting shops.

    The problem with the rapid rise of the Internet has meant that legislators have been unable to keep up with the pace of change and are also hampered by those exploiting the expansion who will, naturally will only ever put the positive side of the emerging technology before them. A major factor to success in these fields is critical mass and obtaining such a position means substantial funds for lobbying lawmakers to see their point of view.

    Tax avoidance has been a major factor in the growth of some of the major players in the Internet business, for example, think Amazon, who have been in the news recently over the pitiful levels of tax they have paid. Take for example CD and DVD sales which have been conducted by selling from tax havens such as Jersey, effectively VAT free.

    The damage this has caused high street retailers such as HMV has been catastrophic. It is, in effect, unfair competition. There has been recently some moves to correct the situation but too late for the likes of HMV who find themselves in administration.

    Now punters, CD and DVD buyers couldn’t care less because all they are interested in is getting the cheapest deal, and I suspect the likes of Amazon don’t really care about the belated tax measures because the delay in action has resulted in a number of their largest retail competitors are now safely out of business. However the long term prognosis for CD and DVD buyers is poor because a huge business is now in the hands of a few Internet players and prices will inevitably rise accordingly.

    Applying this to betting exchanges we are seeing a similar scenario only with the companies further bamboozling punters with a false premise. Better odds.

    When the deductions on off course betting were 9% the true rate of taxation to the punter was, in fact, around 44%.
    This is because, if you take a theoretical punter who starts with £1000 and, say bets in £10s or £20s by the time he has exhausted his original £1000 he will have backed many winners and many losers and will have generated £440 in tax deducted from his winning bets.
    These days, as you will know, there is no deductions on winning bets for traditional betting with off course operators being subject to a tax of 15% of GROSS profits.

    However exchanges are very different and, of course, their profit is generated by a deduction from winning bets which for the average punter is 5% (some discounts apply according to volume and frequency but to qualify for these one needs to be a substantial and regular punter)

    Your exchange deduction is from winnings only and not from original stake so this means your theoretical deduction is around

    So from the so called ‘better price’ that you receive from an exchange,to compare like with like,
    will need to be somewhere between 15-20% better

    So you will need to take 2.15-2.20 to match an SP of evens
    3.87-4.00 to match an SP of 5/2
    6.75-7.00 to match an SP of 5/1
    And so on through the spectrum of prices.

    In other words the much vaunted better prices on which the exchanges that is much trumpeted are based on a fundamental falsehood.
    This, of course, is further clouded by the exchanges use of stake inclusive decimals which conveniently, psychologically, enhances the illusion.

    This is not the only example of false advertising strategy that the exchanges have used.

    An example of this was the campaign which featured a man on a bar stool being punched

    ‘Cut out the middleman’ was the claim.

    When you bet with a bookmakers, whether it be Ladbrokes, an independent or a racecourse bookmaker you are having a direct bet with the bookmaker, no middleman involved whatsoever.

    When you have a bet with an exchange, that’s exactly what the exchange is….a middleman
    It takes its commission by matching up a punter and a bet taker. Exchanges do not take bets.

    Given this blatant misrepresentation in TV advertising you may ask yourself whether many of their other claims are factual or accurate.

    Now, I accept, notwithstanding these matters that we are moving in changing times and irrespective of these matters some will find it convenient to bet with exchanges. I have no problem with that, I do, however, have a problem with governments failing to deal with their unfair advantages

    To take bets as a betting company whether it be off course betting shops, credit offices, Internet based businesses or a racecourse bookmaker, the bookmaker must be licensed under the strict regime of the gambling commission.

    Any profits made are subject to an array of taxes from gross profit tax, corporation tax, individual income tax, national insurance and god knows what else. These have to be paid, along with the many other expenses associated with the business. You know the sort of thing that has to be paid by you, the reader of this comment, in whatever business or work you happen to be in.

    But we are now being asked to compete with ‘bookmakers’ who can lay bets on exchanges, without any of the licensing requirements or taxation liabilities that fall on us.

    Just for a moment think about that and apply it to your own business. Maybe you are a newsagent and have a ‘competitor’ who can legally sell cigarettes without the regulation or duty that you have to charge your customers, or maybe you have, like HMV a business being allowed to sell products in direct competition without VAT.

    So I call for the Government to require ‘layers’…’bookmakers’ on exchanges to be licensed, be required, as we do, to contribute towards the Levy, to pay a gross profit tax of 15%, to pay income tax and national insurance on any earnings and we will welcome them on a level playing field with us they’ve had their head start, they’ve had their period of grace, now lets see some action.
    Or perhaps maybe the government would agree to level the field by scrapping those requirements of us. Likely?, what do you think? Now I really am being silly

  7. so true excellent insight trevor especially when the punter is using the same money over and back all day and you still pay tax on all of it this has to changed bookies should only pay tax on profits

  8. Well written article, my thoughts exactly just wish I could write them down as above.would be nice if exchanges could be proved to be illegal with none payments of taxes by the layers and no license to lay bets. DAVE money

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