When the Tote was sold to Betfred last year one of the first questions asked of the new owner was whether he would reduce deductions from the betting pool. At the time he told the Racing Post, “Absolutely. I want to sit down with the Tote boys and see why we can’t do it.”
Now, just 18 months on, that indication that there should be a reduction has been turned on its head, and from Monday 22 October the deductions will increase by more than 20%, from 13.5% of the pool to 16.5%. It hasn’t taken long for the profit imperative to take precedence over service and value for customers.
Setting out the reasons for the about turn, Totepool managing director Phil Siers made much of the term “co-mingling”, which has nothing to do with hanging around at a speed dating evening, but appears to have more to do with drawing in money from other international Tote activity. The argument is that by drawing in money from overseas markets the Tote will have more liquidity, prices will more closely reflect SP odds, and therefore customers will be better off long term.
Does that make sense to you? Isn’t one of the attractions of the Tote that you can get a significantly different return on longer priced horses? Siers set the impact of an individual bet in the context of a sluggish overall UK market in an attempt to justify the changes. He said, “If you take the UK market at the moment it is relatively stagnant, with single digit growth and that will continue. However, the issue for us in the UK market is that it is not tremendously strong and what happens is that because you have low liquidity in some races then the market is volatile. In other words, if you wanted to have £100 on a horse who is showing 10.0 all of a sudden the horse goes to 5.0 because there’s not much liquidity.”
Come off it Phil, when the money comes on a horse, the price contracts, it’s as simple as that. And to use the example of a single £100 bet as representative of the whole business – Siers reckons the change in deduction could generate an additional £200m - is nonsense.
This approach has cleverly turned the whole issue into a justification of an increase in deduction and disregards what Fred Done said last year. I’m only a small time punter, but if toe Tote took les out of the pool, there would be a bigger dividend. Wouldn’t that increase turnover?
The question that’s been ignored, and so hasn’t been answered is “Why have you not cut the deduction, as you said you wanted to last year?”