Bookies killing themselves by not laying bets?

Bookies: Rights and Wrongs

A few weeks back, I wrote a piece on racing and the data revolution, an article that to my mind had little or nothing to do with bookmaker restrictions. The response to the blog surprised me as it provoked a rash of comments about bookies restricting punters so I’ve decided to return to that issue as a separate matter now.

There are those that tell us that the subject of restrictions concerns only a small minority of punters and by extension people. I disagree. There is an aspect of social justice at play here and companies behaving unethically will always interest the mainstream, regardless of whether they are bettors or not. Bookmakers have become ubiquitous in modern life; odds are everywhere and having a bet is becoming more socially acceptable where once it was not. If nothing else, that is a credit to the PR teams of the major firms.

However, we do have to ask: what are we allowing into our lives? Bookies sell the chance of making a profit, but are the promises of winning hollow? There seems to be a rising tide of questioning if not open opposition to bookmakers in the media of late, from the Final Furlong Podcast to Kevin Blake of ATR and perhaps most notably Aaron Rogan of The London Times (paywall) which suggests the debate is about to be opened up.

Reasonable discussion on this topic is difficult. It is a complex area but more than that both sides are deeply entrenched, the Republicans and the Democrats in the United States cordial in comparison. I can bookie bash with the best of them and have done in the past but it’s pointless: I don’t think anyone wants to read about the clichés of bean-counting accountants or the cancer of FOBTs. Bookmakers do have a side to tell too in this partisan debate and while it is hard for them to present a unified voice – different firms have vastly different attitudes to risk – it is at least worth acknowledging their perspective.

Bookmaker black ops are a fascinating part of this issue. From the punter’s side of the divide, there is so much we don’t know about the dark arts used to monitor and restrict customers so some of this is necessarily vague. The firms rightly use methods to prevent fraud like slow counting but there is bound to be a huge grey area between using the technology available for limiting crime and using it to trap winning punters. This can be achieved relatively easily online as Matt pointed out in an excellent recent piece on IESnare (recommended reading if you haven’t already done so) while systems like OpenBet can monitor and limit stakes.

It is in the shops that things really get interesting though as security cameras, facial recognition and handwriting analysis are all open to use and misuse. None of this is to suggest that punters are squeaky clean; they are anything but. From ghost accounts to commission agents to arbing to bad each-way races, bettors have used them all but one is conditioned to take the side of the single underdog against large corporate powers. I do believe that there is the exposé of all exposés to come on dodgy practices in the bookmaking industry if a journalist can get an insider to go on the record; everything from the baiting of losing customers, to money laundering, to underage betting could be hiding under the rock.

There is an argument to be made about the ethics of laying a bet and whether or not a bookmaker should feel a moral imperative to allow a decent stake. At least, I think there is, but other punters tell me that you can’t apply emotion and feeling to business. Bookmakers, like any company, can argue their primary loyalty has to be with shareholders and providing as much profit as possible. Researching this in an Irish context, I found that the Office of the Director of Corporate Enforcement here states that ‘[company] directors must exercise their power in good faith and in the interests of the company as a whole.’

This is suitably vague but those in charge of the big bookmaking firms have applied it to mean they should maximise profit now over the long-term health of betting on racing. And we can be in no doubt that restrictions do impact racing; people become disillusioned with them and, in turn, the sport. This might point to there being no such thing as ethical capitalism and perhaps laying limits need to be legislated for as part of license application. The bus company that applies for privatised routes may have to satisfy legislative requirements to continue to run some unprofitable services along with the more valuable parts of the pie so why not the same for bookies?

Bookmakers do have a solid argument for restrictions though. Racing is one of the sports where wild fluctuations in odds can take place; we have all seen instances of a debutante being backed from 20/1 to 7/2 from a yard not known for prepping runners first time out. This doesn’t really apply when punters are playing both sides of an NFL over/under total and a massive swing is two and a half points either way. A lot of this comes back to data and integrity, and Irish racing are world leaders in neither, sadly.

I can sympathise with the bookmaker that finds themselves with a one or two horse market on an Irish race, as is often the case, and they are left with a totally lop-sided book; this is far from bookmaking in the traditional sense. A cynic could of course argue that poor initial pricing of the race was the problem and bookmakers deserve to be punished at least to some degree; their odds compilers, if indeed they have any, have missed something that punters have spotted. So often, modern bookmaking firms are much better at risk management than odds compiling.

A further problem bookmakers run into when left with a big bet or multiple running up is that they have no real avenue to have the bet away; hedging accounts provide some respite but someone is always left carrying the can whereas the Betfair market close to the off may see the price having totally collapsed. A further problem that may develop here, albeit infrequently, is that the big loser in the book is disqualified and the bookmaker is caught on the hook for paying double result; punters may have no sympathy for the big firms in this regard but what of the smaller independent? Double result has a lot to answer for as it is part of the wider bonus culture that has eroded margins and played a part in increasing restrictions, the genie seemingly having escaped from the bottle here.

So is there a way forward? I’m probably not qualified to answer that, but there are certainly some small things that could be done to improve things and it’s basically a list of bookmakers eradicating ‘punter irritants’. For instance, the quoting of massive bets in the media grinds on any winning punter, and that they are unsubstantiated even more so; they are just an unnecessary annoyance.

So too is having a bet knocked back and the price remaining the same: take the bet (or some of it) and move the odds. Technology has been a vital tool in the bookies’ war against the winning punter but there has to be a place for more human common sense; it is intensely frustrating when a punter looks for a bet of €30 and is knocked to €28.57. I know it’s a computer algorithm at work but wouldn’t it just be simpler to allow the full bet and reduce the level of punter ire?

An area that bookmakers need to consider is the restricting of recreational, and by that I largely mean non-winning, punters. The feeling abroad is that too many of these punters are being caught in the limits net and while they may hit on the odd gem or springer in the market, their overall pattern is a losing one. Surely these are just the sort of gamblers – let’s call them the 80% to 95% group in terms of return on stakes – worth having on the books.

One firm that does deserve a little praise is Coral. They drew more than their share of criticism in my initial article on racing data but their new position on laying horses in good class races to lose up to £2,000 after 11am in shops can only be a good one. That allows for a reasonable bet at a time when prices have settled down and I hope that they get the benefit of being first movers on this rather than having their heads blown off, as an extension of the guarantee to other bookmakers – and, dare I say it, online betting – would be excellent.

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21 replies
  1. 10 Things You Didn't Know about Geegeez Racecards
  2. buckieboy
    buckieboy says:

    Why are bookmakers engaging in war?
    The prime business of a bookmaker is to make a book but these international gambling behemoths have the profit motive as their first objective.
    I know they’ve got it arse about face when I hear that I’m restricted, as a small punter, by BFSB to the same stake (12p) as Neil Channing who pays BF £100K a year.
    I use these instances to suggest that it is the mindset of these companies that is at fault by seeing each client as a profit centre and no longer seeing that winning punters have a place in their daily work, as the old style bookie accepted. The certainty of the FOBT return has poisoned the relationship between punter and such businesses and that change is primarily attributable to these bottom line bums.

      • Henry Gondorff
        Henry Gondorff says:

        Matt – May I suggest you copy this article and all the comments to the UKGC new Chief Executive. There is no abuse, just logical discussion around business practices that are laughing at all the regulators in the UK.

  3. Pat
    Pat says:

    No bookie deserves any praise they are all crooked and totally against the punters

    • buckieboy
      buckieboy says:

      Whilst I understand that your experience might tell you that, I think in recent times they have been held accountable for their more ‘arcane’ practises. Of course, that was because they had indulged in all sorts of manoeuvres to avoid paying punters in past decades and had given themselves a reputation for deviousness. Consequently, when I read now that they think that bettors are exploiting them, I say ‘What goes around comes around’ and have a little smirk.
      However, we await that expose that Tony refers to above to get the modern version of ‘arcane exploitation’ which may justify your view! Though I fear that a change of government might be necessary to hold them fully to account, as this administration will always find ways to protect its corporate backers rather than being on the side of the common wo/man.

  4. Andrew
    Andrew says:

    as someone entering the debate why is arbing wrong? there is too much written about arbing that is wrong; any form of trading is arbing; the majority of money on betfair is trading; if a bookmaker prices a horse at 5/1 why should they be concerned that it is laid off at 9/2? their bottomline is unaffected; all this anti-arbing talk is hiding the real debate; read Mark Coton’s piece in Racing Ahead this month;

    • Tony Keenan
      Tony Keenan says:

      That’s a very fair point about arbing being used as a catch-all for winning punters and it’s one I would largely agree with.

      • Henry Gondorff
        Henry Gondorff says:

        As anyone ever asked themselves how a bookmaker knows you’re arbing? There are two answers. One; they don’t and are therefore lying when they claim this, be it, to restrict or close your account or for whatever other reason/s, e.g. PR to explain their accountancy practices as opposed to bookmaking. Two; they are acting illegally, by not stating in their terms and conditions that they are tracking your internet activity in a way that is personally identifiable, i.e. they know you’ve laid a bet at a smaller price than you backed it with them. Their T&Cs claim that the tracking data they collect (a huge amount) is only available to them as pooled data. Either way they are liars or fraudsters, so dubious gits.

  5. maverick99
    maverick99 says:

    The theory in bookmaking parlance is that the “book” is meant to ensure that a bookmaker makes a profit regardless of the result, hence the override percentages. The reality though is that this art has been replaced by punters now being seen and treated as individual profit centres or should I write “risk” centres as invariably actual long term liabilities are never proven. With the advent of technology this has meant that the Joe Bloggs with his small £10 – £20 stakes is as likely to be deemed a liability as Mr Big with his £1000 – £2000 bets. Seemingly (from my own experience) a punters long term liability to that firm is not even considered, but his/her type of bets is deemed more likely to incur restrictions. How many times have we all read of accounts being restricted on overall losing accounts? This surely can’t be good business for any firm and just pushes a losing punter to another firm or the exchanges. I’m sure that we can all understand (albeit with reluctance) a bookmaker restricting a successful long term account based on their annual profit and loss, but to restrict an account for any other reasons outside of any proven long term liability is difficult to understand.

    • Henry Gondorff
      Henry Gondorff says:

      Smack-on. But you try and explain this to the UK Gambling Commission. You’ll end up head-butting the wall and concluding that they are there to protect bookmakers, not consumers.

  6. John
    John says:

    Hi, l have been betting on horses for around 42 years and most certainly spent the great majority of them losing a substantial amount of money sometimes more than l could afford!
    Thankfully the penny eventually dropped and l got together a proper betting bank and kept very detailed records,also with age came discipline that previously had been in too short supply.
    Last year l turned over over £90 000 and made a modest £7000 often betting in races like the Stewards Cup my stake rarely exceeded £50 e/w but William Hill have dropped the Best Odds and the web site always refers my bets to a Trader but that is still VIP treatment compared to most of my other accounts,Stan James &,BetVictor, closed my account via email,Stan James even said the decision was taken at the highest level and any appeal would be pointless.
    Corals,Ladbrokes,BetFred,Tote Express,Ladbrokes and Betfair Sportsbook limited my stakes to around £5 on any bet.
    Obviously it is deeply frustrating and l feel the treatment is disproportionate to my actual threat to their profits and when l had all the accounts my profit was spread more evenly and was even less a nuisance,it seems the pattern of betting is enough to attract restrictions nowadays!

    • Pat
      Pat says:

      All punters want is a fair level playing field, everything is edged towards the bookies, just like this current government they are corrupt and criminal in its policies against punters

  7. pat d
    pat d says:

    Most punters would accept knockbacks as part and parcel of the betting experience. In general bookmakers would be imprudent to lay the whole of any bet if it did’nt suit their “book” and any reasonable punter would accept this practice. Whether you were offered 75%, 50% or even 33% of your request, while irritating, you could accept the offer and execute your bet and move elsewhere to get the remaiing % on. However what bookmakers indulge in nowadays in not knockbacks it is clearly an emphatic two fingers approach to a huge number of racing punters. Typically most firms now only offer from 5% to 10% of your request & this approach is what frustrates. Large sum restrictions would be understandable but if your betting 100 or less it sends a clear message that they simply do not want your business. These firms may as well close accounts as so many others do as they take the pisstachio. Bookmakers are responsible for the success of Betfair by driving punters towards towards it over the last 15 years.

    • acranea
      acranea says:

      True.But Betfair are cashing in their chips now thanks to the merger.Actually “merger” is a misnomer.Paddy are buying Betfair to all intents & purposes.It may be a merger in name but in terms of the changes that will inevitably occur it’ll be all Paddy.Once all the exchanges are bought up by the bookies (you watch it’ll happen) we’ll be back to square one with nowhere to go.

  8. MikeA
    MikeA says:

    Good article and some very interesting points in the comments as well. Having had virtually all of my accounts restricted at one time or another then at the risk of talking through my wallet I think there should be a minimum amount a bookmaker should be required to lay on any individual bet. A £20 stake for me would be adequate, though I expect far too low for many people, or a suitable minimum liability per bet (i.e. not refuse up to a liability of £500). If they are unhappy with liabilities then as has been repeated above they have the option of reducing the odds, or in some cases hedging. Cherry picking customers because they are more profitable (to the bookmaker) or at least behave in ways that would tend to make them more profitable and restricting the “threats” to their bottom line is a disgrace. The problem is, it’s difficult to accuse them of being “morally wrong” (which in my view they clearly are) when a large part of the population would question the morals of the whole sport, either in terms of animal cruelty or a general aversion to gambling, or have the “it’s all rigged anyway” mindset so therefore it doesn’t matter. I’m not very optimistic that this situation will change but it is encouraging that it seems to be getting more attention.

  9. Brian
    Brian says:

    Praise of Coral sticks in my throat. How many on-line accounts did they restrict last December? Judging by 1 forum I used at that time it must have been hundreds. They won’t take a bet from me now but are happy for me to use their on-line slots!

  10. simon
    simon says:

    I dont sympathize with the bookies at all ,they hedge their losses on the exchanges and also bet with other firms, restricting winning punters is a joke

  11. acranea
    acranea says:

    First response has absolutely nailed it & I’ve held this opinion for a long time.FOBTs are now the bookies primary business.If they could get away with dropping sports betting altogether they probably would do.They’re also the reason I don’t bother with shops anymore.They now resemble arcades more than anything.Who would ever have thought that a betting shop would have a majority of customers who know nothing about sport?

    Crowds of yelling idiots pushing money into a machine then trying to smash the guts out of it when they inevitably lose isn’t my idea of a fun Saturday morning.2 years ago I even saw a machine punter pull a knife on a shop manager.Screw that.

    Against this background the war will be never ending.The galloping greed of the firms knows no bounds.Not content with the massive income from FOBTs they want more by removing anyone who might get one over on them.

    I also agree that a change of govt will be needed for any real reform.Hearing Fred Done before the election saying a Tory win was essential for “all business not just bookies” Made me want to spit.It may be true for your average billionaire like Fred but having run 2 small businesses myself I can tell you that a Tory administration does nothing for you if your turnover is less than in the millions.

    In the meantime we just have to keep dancing around spreading our stakes as widely as possible just to make a few quid.

    • Pat
      Pat says:

      Don’t start me on FOBT, how the government have allowed these machines is scandalous, they have caused untold misery, fellow punters taking there own lives, broken families, major debt problems, all due to the corrupt manner in which these machines are controlled

  12. John
    John says:

    I remember Racing Channel having a nice little chat about all the various ways of making profit,the merit of speed figures,stats,trainer form etc and asked people to contribute, but very quickly they had to put a stop to anyone saying about the problem of even getting on to small stakes online because of massive Bookmaker restrictions even though they had barely been with the bookmaker 5 minutes and won very little!
    The trio of experts said we do not want to get into that area,(probably due to the revenue they receive from Bookmakers and not wanting to rock the boat!) as both sides will just slag each other off.
    I tweeted bet with your Bookmaker for years and lose you are sir,have a purple patch and we do not want your business, Thats the Ladbrokes Life!!!!
    I had a chat with a Corals shop manager and mentioned my online restrictions and he said you must be arbing which is not something l have ever got into just because you want the best price on a horse do they really think everyone is arbing? (I am sure its just an excuse to exclude customers who do not lose and will not be drawn into playing Black Jack etc)
    I think that when you use oddschecker that is a big black mark against you and as someone said previously they only want to supply the Las Vegas experience where the odds are heavily stacked in their favor,its a shame that Betfair lacks the early liquidity to snap up early value,perhaps if it had l would be able to bypass the Bookmakers completely but its still vital to have some accounts to make a profit for my betting as my bets often shorten up which they hate!

  13. Philip Clayton
    Philip Clayton says:

    The problem with bookies is the same problem now afflicting all large corporations, the computer. Just as with banks nobody has the power to override the computers parameters, e.g. if you want a small loan, which may be refused because your credit rating is too low because you may have been late paying a bill; not defaulting, just late. I work in catering and Mitchell&Butlers, who own chains like All Bar One, have computer programmes that say how many staff you need and are allowed for every hour of the day based on turnover. Believe it or not this includes a category labelled 0.5 of a chef.

    So you cannot get hold of a ‘reasonable’ person who can look at your bet and simply O.K. it because they aren’t allowed to. I think you will find that there is no difficulty in placing a bet of any sum you choose on ‘virtual reality’ racing. I wonder why?

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