Tag Archive for: bookmaker restrictions

Tony Keenan: The Bookmakers’ Perspective

The bookmaker-punter divide is one where the boundaries are permeable with many people playing both sides, writes Tony Keenan. Ian Marmion is one such example: Ian has worked with a number of the big betting companies as well as punting professionally for a time; and, along with some friends, he has a few horses in training, not least Ch’Tibello with Dan Skelton.

Much of what I write for Geegeez tends to be punter-centric but it is worth remembering that there are multiple sides to any story. With that in mind, Ian was kind enough to give me his thoughts on the state of the betting industry at present as well as on how racing interacts with it.

 

Let’s start with some biography Ian, what’s your background and how long have you been working in the betting industry?

I suppose I was always a keen punter and got into the industry with various jobs like a cashier and betting shop manager.  I then worked in the raceroom at Paddy Power before moving to Victor Chandler where I progressed through the company, coming back to start operations in Ireland in 2005 when we go some pitches and shops. I thought I was home for good but one day I was over in Gibraltar for a meeting and having been very critical of the firm’s trading policy (which I felt was antiquated) I was asked by Victor to sort it out!

In truth, I was a mug punter up to that point, though I was strong numerically and had a good eye for product. We had a lot of high-stakers and lead accounts, which is very different to how that firm operates now, and I was able to educate myself on how to win. We were aggressive punters in the market and I was following others’ opinions but learning plenty. Over a period of years it got to a point where I was making more money punting than working and having had a tempestuous relationship with Victor I thought I was good enough to give it a go full-time.

I reckoned my bets were coming from about 30% what I got in Chandler’s, 40% other contacts I had made along the way and 30% my own opinion though I probably got that pie wrong! It started badly as I had two consecutive losing months for the first time in a long while but it soon turned around and I was at it full-time for five years.

My skill was getting money on, that’s what I was good at. I was doing business for warm punters with about 10 lads in shops. They’d be ready to go at 10 in the morning, know what shops to do at 10.15, get the message what to bet at 10.30 and have everything done by 11. Getting on is as important a skill as picking winners.

 

You’ve since come back into the betting industry proper; what was your reasoning for stepping back from the punting and joining BetStars as trading director with their sportsbook?

There were a few different reasons. With the punting, I was getting a bit sick of it and some of the developments in the game weren’t helping. It was certainly harder to get on with overnight pricing killing a lot of what we did in the shops in the morning, and the machine [Betfair] was definitely getting more of a grip on Irish racing. Where once we were getting twelve monkeys [£500 at 12/1] at half-ten in the morning, now it was three hundred at 7s. With BetStars, PokerStars were launching a sportsbook and it was going to be based in Dublin; I thought if I turn this down I’m never going back to Ireland and I’m here three years in which time the punting has taken a back-seat.

 

The elephant in the room is account restrictions so we may as well deal with that. When I talk to punters, rightly or wrongly, it’s the only issue they want to discuss. Now maybe there’s some selection bias there as I talk a bit to people who have an idea what they’re doing but restrictions are happening. What are your thoughts on them, both from a work perspective and personally?

With BetStars, we are a new sportsbook so we’re trying to attract customers and inevitably you attract sharp business first. Our horse racing runs profit to 4% return after Best Odds Guaranteed, 7% before BOG which is reasonable and we’ve restricted about 6% of customers this year. Recreational customers have a typical profile. They bet in or around your average stake, they play a good mix of singles and multiples, they tend to do multiples early and singles off the show and they tend to play on higher grade racing. As a new entrant we get a lot of customers that fall outside this typical profile. We don’t have many punters who bet in or around our average stake of €xx [redacted] who we have to restrict. Typically there will be a blatant reason to restrict them and more often than not that blatant reason will be they are arbers.

I’ve been both sides of the fences and for many reasons – cost and technology for example – undoubtedly the quality of trader is not what it once was. There is a part of it where ‘arbers’ is just an excuse where a trader doesn’t want to make a difficult decision, playing lads that aren’t inside the model. That said, I don’t think this is a problem for the tenner and score punter in shops and even online but outside of that, there’s a nervousness and good punters do get caught up due to lack of skills in trading rooms. However, bookmakers have no obligation to feed money to pros or non-recreationals, arbers or bonus abusers.

When I’m looking at it, there are a couple of reasons I wanted to bet a punter. Firstly, when I had a fair chance of beating him and secondly if he told me something I didn’t know myself and that includes bets to a reasonable size.  I didn’t want followers or people just following the machine; you’re not going to beat them and they’re not offering you anything. You can have some winning accounts but you don’t need to pay everyone for the mark.

As for the punting side, a friend says to me that people who can’t get on don’t work hard enough. If you’re that serious and hard-working about it, you’ll get around it. There aren’t as many recreationals as we know it left and, while everybody always criticises bookmakers in saying that they won’t lay without looking at the machine, nobody ever says that the same is true for punters who won’t strike a bet if it is bigger on the machine. We’ve reached a point where nearly every single bet we strike is borderline with the machine price, which is basically borderline zero margin price.

 

Let’s go into a little bit more detail on some of these things. Line tracking seems to be the new term for arbing and people at it are copping plenty of flak. Is there much of this going on and can it be done with computer programs?

Punters can do this robotically with programs like OddsMonkey which flag up arbs and automatically places the bets for you. [I ask at this point doesn’t this business stand out a mile.] The biggest industry that has grown up around it is the show arbers, playing off show not earlies. There’s a significant time lag on show and machine prices, where you might have someone backing a horse at 5/2 that is 3.4 on the machine and that business can look square.

I actually think it’s impossible to lose betting show arbs on the front two or three in market with best odds guaranteed as the bookies are betting overbroke. And that’s a scourge for the ordinary punter that people don’t really think about. Recreational punters have to lose to enable some of that money to be distributed to the winners.

 

Some people have suggested that a minimum bet or lay-to-lose guarantee could be a way to go. How would the maths of that stack up?

We have to ask ourselves if can we sustain a minimum bet guarantee without altering the experience of the ordinary punter and I don’t think we can. If minimum bet guarantees came in then best odds guaranteed would have to go and margins would have to increase. Ordinary punters have never had it so good and the fact is that most punters never reach a limit. Increasing margins might well satisfy people who aren’t the typical punter but you would have to remove concessions too. Maybe those who are better than the market would be better off but the ordinary punter won’t be.

 

You’ve mentioned overnight prices earlier. What are your thoughts on them?

They’re the single biggest tool in the bookmakers’ armoury at present as they’re getting to 10am when they typically increase limits and open shops and have prices right for two-eighths of nothing. No one is getting on to any size bar a few VIPs who are big long-term losers and in effect they adjust after every bet and keep adjusting until they get it right. The firms don’t win on overnights and even pre-10am bets and are actually happy to lose as when the limits are upped they are more confident about their prices. Remember, the vast majority still play on the show with the breakdown being roughly 70% show, 30% earlies.

 

On the subject of punters beating you are there any cardinal sins that they can avoid or that make them stand out? And if you don’t like their business, do you think there would be any point in having a yellow card-type system where they are warned about how they are operating?

Customers who consistently beat the Betfair SP are impossible to beat long-term. They are buying something for a dollar and selling it for a dollar ten. Followers who are price sensitive and just follow warm money either because it drops under on the machine or because they work in a trading room offer no long term value. Customers who abuse antiquated systems like traditional each way terms or Rule 4 are no good to you either.  On the subject of bad each-way, a lot of that is a problem with the system and the rule 4 model is broken too, completely out of date. If I had my way, I’d get rid of each-way terms and have separate win and place books. There would be a correlation between the win book and the place book but there would also be changes depending on the make-up of the race. The each-way system is too entrenched though and another thing we’d be better with is decimal pricing as 6/4 to 13/8 is too big of jump, what about 2.55 or 2.6?

I don’t mind anyone having the conversation about how they are betting. We don’t do this well as an industry and this is where the skill deficit is coming into play. You should be good enough as a trader to look at an overall basket of goods to see he’s getting the better of me overnight but not overall. So I can’t let him win the lot overnight but you can have more on the show. The problem is when you get restricted with most of the firms, BetStars included, it doesn’t matter what you want to bet on, whether it is the Gold Cup or a seller at Lingfield, which makes no sense.

Technology has contributed to this in a big way. More and more firms don’t have a call centre and make hard and fast rules about limits to be applied online. A few have an over-ask tool that allows you to request bigger bets but it’s generally not afforded to non-recreationals.

 

In the past year or so, regulation has become a much bigger deal in the UK. How do you think the industry is responding to this?

Responsible gambling has become a massive part of our industry though I do think it’s important to say that being a high staker and being a problem gambler are different things. For some people, big stakes are normal. There are plenty of important developments going on in UK at the moment including staking limits on FOBTs, the Gambling Commission and firms being held accountable for responsible gaming.

As an industry we’ve been let get away with too much for too long. I had a boss who used to say ‘never feel sorry for them [punters]’ but in this day and age that’s not acceptable.  Gambling is 24/7, and punters have access to so many opportunities to feed an addiction. I know it sounds hypocritical of me to say I’m anti-FOBTs when I get my living from people losing money but I’m not a fan of them. They prey on a demographic that shouldn’t be preyed on. There’s a counter-argument that they can go online and do it just as easily but I’m not so sure they can as you need debit cards and access to funds in a bank account.

I remember reading an article about FOBTs where a manager in a William Hill shop said ‘I’ve never seen anyone play them happily’ and that about sums it up for me. Obviously they are an incredible money-making machine with over half of Ladbrokes’ profit from them and you saw the impact of reducing the stake limit had for the GVC bid for Ladbrokes Coral. Personally, I’d much prefer to see 1,000 punters lose a tenner than one lad lose €10,000 as it’s just more sustainable. Stuart Kenny [one of the founders of Paddy Power] was an absolute visionary in this regard as he wanted the punter to go away thinking he got value for his few quid, it was something he intrinsically believed and it was him who came up with money back specials and such like.

 

Racing remains a big part of your life, Ian, and you have a number of horses in training, not least Ch’Tibello with Dan Skelton. I always thought it was a little unusual that you opted to have your horses trained in the UK rather than at home in Ireland, allowing that Skelton is excellent. What are the reasons for that?

There are two reasons. When we got into them, we were abroad and it didn’t matter while latterly, it’s too hard to win a race over here. Dan has trained about 105 winners this season for 40 different owners but with the stranglehold the pair of boys [Willie Mullins, Gordon Elliott] have over here, Ch’Tibello would struggle in graded races so there is a better chance of him winning one in the UK.

The punting opportunities are better too. It’s impossible to get on in the mornings in Ireland but you have half a chance of getting on in the UK. We landed a small touch with one last January and got to back him at midday when he was still 25/1 which would never happen in Ireland.

I was at Fairyhouse for Bar-One day earlier this month and there was a great crowd and atmosphere but it was like Jebel Ali with the same colours going around race after race. Maybe I’m being negative but I can’t see us winning graded races over here; though it must be said that what Elliott has achieved is incredible and we all should have stood up and noticed when he won the Grand National way back.

 

What do you think racing is doing right at the moment and where do you think it could improve?

For one, we’ve so much more wrong with the game than the declaration of wind ops. I think racing and betting are one and the same and we need to look at changing the demographic of who is going racing. In Ireland, we’re not too bad at it but in the UK you have silly stuff where they won’t let you into the owners and trainers without a tie. I would abolish enclosures and some of the entrance prices in the UK are ludicrous.

From a betting point-of-view, integrity is still an issue. With Douvan and the Tingle Creek, Altior and Nicky Henderson it is more transparency than integrity. Racing is competing for the betting euro with sports that have 24/7 transparency or at least the perception of such, football being the main example. If that is their expectation then it’s important that we try to emulate that. The ordinary guy in the street thinks racing is crooked to start with, which he doesn’t think that about a football game, and racing needs to work against that notion. The younger trainers are much better at this but we need to reach a level of transparency where when an owner tells a trainer to stop a horse, the trainer tells him to eff off.

The bad racing during the week has integrity issues. Battle-hardened punters know how to factor that into equations and to use it in the decision-making process but if we’re trying to attract an ordinary guy to spend his leisure pound on us, it’s never going to happen. Maybe racing just doesn’t have a product that it can sell to a punter Monday to Friday. Football is the one that is targeting the betting pound more than any other with the good stuff spread out over the week, group races most days in racing parlance, where we’ll have dross Monday to Friday.

I don’t know if this is practical but perhaps we should have a more concentrated programme, less racing but better racing. Some of the issue is horses rated 45 on the flat that are simply useless; what are they even running for, they shouldn’t be able to get into races. If they were not able to get into them, they’d as soon not be bred and the industry would be better off in the long-term after a period of pain.

 

I know you’re not a fan of the bookmaking firms using trainers and jockeys to provide content through blogs, and your horses with Dan Skelton don’t run under the Ladbrokes sponsorship that his yard has. What’s your thinking here?

I don’t think from a transparency point of view that bookies should be sponsoring trainers and jockeys. For the ordinary guy in the street who don’t forget thinks racing is bent anyway, this looks terrible; how many guys told you Ruby jumped off Annie Power? Optics is the big word at the minute. Nor do I buy the content argument that they are providing material that engages people in racing; if that were so, why aren’t they doing it for Geegeez or the Sporting Life or for free? It’s for money.

The firms are doing this for marketing first and foremost, you are associating your brand with something premium which is always a plus. Bwin did this well with Juventus and Real Madrid a while back and people believe in you instantly when you associate your brand with another premium brand. I don’t take any of them seriously as I don’t believe you’re ever being told anything significant.

 

Let’s wrap up with a final question: Where do you see the industry going in the future? I listened to a podcast recently with Marco Blume of Pinnacle where he said e-sports were their sixth biggest market which I couldn’t believe. Is this the case and what else is coming down the line?

I think the e-sports stuff is a lot of spin. I don’t believe in them as a fixed-odds betting product, it’s like badminton in terms of turnover. Pinnacle might be trying to popularise it, Marco Blume has a background in that area, and to be fair the age of your typical e-sports punter is lower than that of football, 27 and 40 in our case. It makes sense trying to make a go of it in that regard but I don’t buy it. Mind you I didn’t think cash-out would work so I’ve not exactly got a strong pedigree in this area!

There are massive changes coming in football around how markets are done and presented. The whole Request-A-Bet stuff will be automated and we need to remember that football betting looks the way it does because that’s how a football coupon looked in a shop 40 years ago. We still tell punters what they want to bet on but in 6 months’ time punters will tell you what they want to bet on. They will be able to drag in what they like to bet on. The maths isn’t the most difficult aspect of this, it’s the tech that is the hard part with issues of how you present it and do it quickly.

We are all trying to convert betting into gaming where the punter can circulate his money, bet on next corner, throw-in or goal. Nobody has got this right yet but it’s coming.  The thing is when a punter has a bet on the win-draw-win in football, he is dead for 2 hours. I’m not sure how this would work with racing, perhaps with punters who miss the off or are waiting for a bet to settle or have had a faller in a race and want plough back in again. This appeals to the young demographic who want things quickly. We are a world that doesn’t read anything anymore and is so used to 140 characters, and punters are naturally the same.

The views expressed above are the personal opinions of Ian Marmion and not necessarily representative of The Stars Group.

Tony Keenan (twitter: @racingtrends) was talking to Ian Marmion (twitter: @marmobet), sports book trading director for BetStars

10 Things I think about the Betting Industry

The betting industry has been getting about as much coverage as Brexit negotiations in the past month or so and at times it seems about as complex; so if you’re expecting a unified view on the subject you are in the wrong place, writes Tony Keenan. That said, I’ve tried to read most of the coverage and have thoughts on a number of areas within the subject that might be worth mentioning so I’m going to ramble on and see what comes back from readers.

 

One: The Issue

Aside from any views I have on the content of the betting industry coverage in recent weeks, it is a good thing that the area is being addressed at all. In this period, there has been discussion on the AtTheRaces Sunday Forum and with Bruce Millington on Racing UK’s Luck on Sunday along with articles on account restrictions, the work of the UK Gambling Commission, the David Evans/Ladbrokes case and so on.

This cannot be a bad thing as there are lots of punters, winning and losing, who have issues with how the industry is being run. It is difficult to make any progress without discussion and hopefully this media engagement with the industry will continue.

 

Two: Who cares about restrictions?

There is a belief out there, perhaps propagated by bookmakers, that few people have any interest in the workings of the betting industry, particularly with regard to restrictions; we are often told that the vast majority of punters get their bets out without issue and it is only a few vocal customers who have been restricted who care about the issue. I could not disagree more with this.

Maybe it’s naïve of me to think so but I’ve always believed that bookmakers, to some degree at least, are in the business of selling hope, whether it is the hope of having one’s opinion validated or the hope of winning money. Even the most unprofitable punter hopes that one day he will win and the thought that this may be impossible due to restrictions is not an appealing one.

Furthermore, stories of trading practices that may be less than ethical or at the very least skirt into grey areas are interesting for the wider, non-betting public to read about. Bookmakers and their various hues of blue, red and green are ubiquitous on our high streets with betting becoming big business and now more socially acceptable than ever; the demographic of your local betting shop has likely become more diverse in the last few years. When I speak to non-betting people about the idea of restrictions, they are invariably fascinated and surprised by the practice and to say that this is a non-story is a gross misrepresentation of the reality.

 

Three: Insiders

I have never worked inside the betting industry with the closest I came to getting a job in one of the companies when I got sacked from a cashier’s job with Sean Graham before I even started; there was confusion over the date of first day rather than anything more sinister! Thus everything I write here lacks insider knowledge and is inevitably biased towards the punter. The one thing I find irritating however is when punters suggest a change in the industry only to be told by those working inside it that their ideas could never work.

Perhaps they are correct but many of these industry insiders are less willing to put forward ideas that might help improve their product and can become quite uppity when challenged on this; it’s almost the ‘how many races have you traded’ argument! On a related point, one of the most interesting things to emerge from Bruce Millington’s appearance on Luck On Sunday was his comment – and I paraphrase – that the betting industry is not set up to write monthly cheques to former employees of the bookmaking firms. I sometimes think that these sorts of punters might be about the most dangerous for the bookies in the modern betting landscape; they know the systems and models used but more importantly they know their weaknesses and are really playing anything but a fair game with the layers.

 

Four: Winning recreational punters

Another thing that piqued my attention in the Millington interview was his comment about the ‘clued-in, recreational, price-sensitive punter’ who should be permitted to win somewhere between two and five grand in a year. I realise Millington was on the spot and likely pulling figures out of thin air but perhaps he has thought deeply about it and believes these are valid numbers and I certainly wouldn’t disagree.

They are far from outlandish in terms of profit and I strongly suspect that such a punter would give plenty back to racing in terms of things like subscriptions to TV channels and digital media, purchasing a Racing Post a few days a week or simply going racing. In short, they are exactly the sort of enthusiastic customers racing wants. I would however by very doubtful that such punters are avoiding restrictions and, speaking to other gamblers, it does seem to be the case anecdotally.

 

Five: Self-Regulation

Ireland and the UK are two different betting jurisdictions and have different levels of regulation, with the level of control in the latter becoming much stronger through the Gambling Commission who have made some major rulings on things like terms and conditions and treatment of customers who self-excluded. There is no such body in Ireland though HRI chief executive Brian Kavanagh has recently called for something similar here.

The one thing I cannot understand, in the UK but especially in Ireland, is that the major firms have not gone down the road of some form of self-regulation and are essentially leaving themselves open to the whims of government. The current political setup may be inclined towards the industry but there are more left-leaning parties who are much less in favour of racing and by extension gambling and might indeed take great pleasure in installing draconian measures on the industry. At the moment there seems to be a free-for-all but that period without regulation could come to an end at any point and bookmakers may regret not installing some of their own measures of control when that time comes.

 

Six: Irish Racing Integrity

In a recent interview with Johnny Ward in The Times, Brian Kavanagh commented that ‘it would be fairer to all’ if bookmakers would not restrict bets on Irish racing. Personally, I would love that but it is a very strange comment and one that seems to take no cognisance of the integrity issues, real or perceived, that dog Irish racing.

There has to be some give-and-take with the HRI and the bookmakers and I suspect that our horse racing rulers have much more of a take-and-take approach to the big firms, constantly appealing for betting tax increases but offering little in return. The share of betting turnover in Ireland that is actually on Irish racing is relatively small and I would question what HRI have done to grow this market.

They have promised sectional times at all tracks in January 2017 and they remain undelivered, seemingly failing to understand that richer data gives betting markets more solidity. The new running and riding regulations (applied by the Turf Club) are often challenged and overturned, and rules around drug testing remain unsatisfactory. With Irish racing, the issue is perception and, while I think our racing is much straighter than many believe, what the wider betting public believe is important and you have to try to do something to redress the balance.

 

Seven: FOBTs

We are constantly warned not to conflate the argument about FOBTs and restrictions on horse racing which is fair enough but I do find it hard to get past a visceral, deep-seated loathing of these machines; as a horse racing punter who wants to play a gambling game of skill, I find these games of chance pointless as you simply cannot win over a period of time.

FOBTs are not in Ireland and there seems to be little appetite for them here though it is worth pointing out that society in general is becoming more automated; Paddy Power shops all over the country have recently been fitted out with more betting terminals though in this case they are used for sport only which is obviously fine.

There are those who argue that there is no reason why Irish shops should not have FOBTs, taking a libertarian view that people should be allowed to spend their money in whatever way they wish provided no one is harmed. Sometimes however people need to be protected from themselves and that is what a proper society should do, paternalistic though that may seem.

 

Eight: Too many markets

As of last Thursday at 5:16pm, there were 63,524 markets available to bet on with 888Sport across 37 sports, though admittedly almost 51,000 of those were on football; the reason I choose this company was ease of calculation as they tell you how many markets are up in each category but the number of betting opportunities is hardly unusual for the big firms.

It is not unreasonable to wonder what is the point of all these markets and who do they serve? Many of them are derivative and take little effort in terms of creation; a team total in a US sport is derived from a combination of the spread and overall total while a without the favourite market in horse racing simply comes from removing the market leader from the betting. Yet even so, one has to suspect that some of the bookmakers are on a hiding to nothing with these and they could be ripe for exploitation allowing that many will have low limits and hefty overrounds; from the point of view of sheer numbers, they have to be difficult if not impossible to monitor.

One of the best podcasts I listened to recently was an interview with Marco Blume, Director of Trading at Pinnacle Sports, on the Business of Betting where he basically said he had little or no interest in endless sub-markets, pointing out that the vast majority of their business came in the big three markets of outright, handicap and total.

The Pinnacle model has proved hard to replicate and likely is impossible in horse racing where wild price moves are common but his views on the huge number of markets seem valid. No bookmaker can reasonably trade thousands of markets and it seems they are only trying to price them up because everyone else has. Herd mentality in bookmaker business seems deep-rooted.

 

Nine: Line-tracking

Line-tracking seems to be the new buzz concern for bookies; for those that are unclear on what line-tracking is, it means taking a priced with a fixed-odds firm when the selection is trading below those odds on the exchanges. Simon Clare on the Sunday Forum implied that there is an army of these methodical line trackers out there, ‘a sea of punters’, some real and some robotic, seeking to take advantage of this approach.

That may be the case but it is easy to see how an ordinary punter could be misclassified as such; in effect, we are all line-trackers as it essentially means being price-sensitive which can hardly be seen as a sin. For instance, let’s say I fancy a horse that is running later in the afternoon and I decide to wait until later to back it, holding off until liquidity enters the exchange markets or I can get to a betting shop. That plan goes out the window when a major tipster puts up the selection, someone like Andy Holding or Gary O’Brien with a big following, and I need to make a move now to back it or else I will miss the price entirely.

The selection was my own but if I think the odds are wrong then it is more likely others will too and I am being lumped into the bracket of a line-tracker which isn’t accurate, at least in the sense that these line-trackers are systematic in their approach.

 

Ten: Patterns of Play

The whole idea of betting fair is a fascinating one and it seems the Gambling Commission are interested in this area, looking to set down some rules about what is acceptable in terms of patterns of play. We all know things that are likely to be frowned upon by bookmakers from exploiting bad each way to trying to grab stale prices. But what might be seen as ok seems more difficult to define.

Simon Clare commented on AtTheRaces that punters need to be original in terms of their selections if they want to avoid restrictions, but I have already pointed out in the line-tracking section that there are problems with this sort of view. Punters may do their best to be original – that is certainly how I tend to construct most of my bets – but the issue is that the bookmakers may simply have made a mistake in terms of pricing the race and most punters are spotting the same error and wanting to back the same horse. Rather than the bookmaker being punished for poor odds-making, too often it is the punter who bears the brunt of their error, made to pay in terms of restrictions.

- Tony Keenan