There’s a famous saying that ‘you never meet a poor bookmaker’. That, of course, sits hand-in-hand with the idea that the house always wins. In short, the idea is that the people doing the gambling will always lose in the long run, whilst the people taking their money will always end up on the winning side of the conversation.
Yet how true is that? Let’s not forget that the idea of the house always winning comes from betting over a long period of time, not just one session. Put ten people in a bookmaker’s shop and seven of them could win, but the money will only remain theirs as long as they walk away and never come back.
We’ve all been to the races in the last few years and have noticed the odds on track are not always the best compared with what you can get online, there are also less concessions such as best odds guarantee. Then again people like to bet with on-track bookies, it is part of the novelty of attending a race day, and many are happy to trade worse terms for this. One of the reasons on-course operators are lower value is due to higher proportional course, but just how pricy is it to work on a course?
There’s Money To Be Made
The first thing to acknowledge is that in the world of betting there are vast sums of money to be made. When you’re operating in an environment in which tens of thousands of pounds can be staked on a horse or a football team by just one person, of course there’s a chance that the bookmaker will end up in the black more often than not.
Yet it’s also important to remember that much of the money-making is being done by huge betting operations that can afford to plough large amounts into the development of their online betting arm. The likes of William Hill, Paddy Power and Ladbrokes are so well-established that they’re able to develop customer loyalty and cope with the peaks and troughs of the season.
When you’ve got the likes of Denise Coates, the Chief Executive of Bet365, paying herself £323 million, it would be folly to argue that there isn’t enough money in the world of betting. That sort of figure is based on incoming money, of course, and punters spent £64.5 billion with the company in the financial year leading up to Coates’ payout.
The Industry Is Lopsided
The problem is that the money being made by the juggernauts in the industry is nothing like the money that bookies at the thin end of the wedge get to take home with them. The people that run bookmakers’ pitches on racecourses operate in a completely different sphere to the powerhouses that rule the roost in the world of online betting.
That’s not to say that they don’t make any money, obviously. The busiest pitches at the most popular racecourses can see the bookmakers there earn vast sums of money, but when the racecourse is quiet or it’s an unpopular midweek meeting, that income will be dramatically reduced. It needs to be looked at over the course of a year, not just a month or so.
The Expenses Of On-Course Pitches
It’s easy to forget that the bookmakers that take up on-course pitches have to pay for the privilege. To do so at a venue like Cheltenham is virtually impossible, such is the rarity that they’re actually made available in the first place. When they do, though, they can cost as much as a quarter of a million pounds to secure.
That is the expensive end of the scale, of course. Yet they’re expensive for a reason. You can get a pitch for precisely no money, but that’s because their position is so bad that you’re likely to make no money from them either. The expenses are the same in terms of equipment for all positions, but the ones on the edges will take far fewer bets during a day.
Even a popular racecourse like York can set a bookie back around £200,000 for the best pitch. Then once you’ve got a pitch sorted you then need to get the equipment that you’ll need for the day, which is by no means cheap. Three digital billboards set Bryan Hazell back £13,800, which the battery adding close to another £1,000 for the battery to run them.
There are then other things that you need to add in if you want to be able to actually take bets. The computer that helps to work out the calculations is in the region of £650, whilst the printer for bets is more than £200. All of that needs to go onto a stand, which costs in excess of £2500. Even an umbrella isn’t cheap, coming in at £400.
The pitch and the equipment you need to be able to take bets are obvious expenses, but there are less obvious ones that bookies need to take care of too. The most important one is an operating licence from the United Kingdom Gambling Commission, which allows you to take bets in the first place from punters coming to the racecourse.
How many days a bookmaker wants to work will dictate how much the application fee alone will cost them, ranging from a couple of hundred quid to just shy of £1,000. There’s then an annual fee that is also dictated by the number of days a bookie wants to work, with more than 200 working days likely to cost more than £1,300. The price has gone up considerably over the years.
Each time a bookmaker wants to go to a race meeting they need to buy a betting badge, which will set them back as much as eight times the normal admission cost. A bookmaker called Joe O’Gorman said that somewhere like Royal Ascot can result in him needing to win £1,000 just to cover his entrance fee before he starts making a profit for the day.
If it’s a popular meeting then a bookie will know that they’re likely to be busy, meaning that extra staff will need to be brought on and their wages will need to be paid. Their admission will also need to be paid for, whilst if it’s a meeting that lasts for several days like the Cheltenham Festival then accommodation and meals for all will also need to be paid for.
Midweek Can Be A Killer
The reality is that Festivals and big meetings will almost certainly still see bookmakers make a decent amount of money. The most difficult time for bookies is during the week, when many of them can struggle to make any money. The expenses are cheaper than in a big meeting, but they can still be in excess of £300, needing at least £2,500 in takings to cover expenses.
It got so bad a couple of years ago that race operators at Lingfield’s all-weather course gave an attendance allowance to bookmakers in January and February in order to ensure there were some there. They were needed to offer a Starting Price for the horses, so at least three had to be present and working for that to happen.
Minimum Requirements For Profits
When you take into account all of the possible expenses for a bookmaker you can see how the smaller ones based on poor pitches might not make as much money as you’d expect. Even at the busiest and most popular race meetings, many punters will bet online with their mobile phones thanks to accounts with the well-known names in the industry.
Others will turn to the Tote for their bet, wondering if they can get a bigger slice of a smaller pie than with a fixed-odds bookie. Once they’ve dealt with all of that, a bookmaker working on a course will be lucky if 12% of their turnover will end up being profit. That can still end up being a healthy amount of money, but often it will need to cover the quieter meetings too.
Bookmakers Are Closing Up Shop
The ever-increasing costs that bookmakers are being met with is resulting in more and more of them deciding to call it quits. Many more are changing the way that they work, especially when it comes to midweek operations at quieter meetings. Limited trade compared to running costs has made operations unviable for many, resulting in staff cuts where possible.
In 2002 there were 612 on-course bookmakers registered and able to work. By 2017 that number had dropped down to 415. That’s a 32% decrease in numbers over just fifteen years, suggesting that something may have to change if the on-course bookmaker is going to survive as a going concern. The biggest names are fine, but the smaller ones are struggling.
Bryan Hazell, the bookmaker who spent nearly £15,000 buying digital billboards to use on his on-course pitches, thinks that the numbers are unlikely to ever recover. He said, “Anyone starting out now, I would honestly consider their chance is between very difficult and nil”. It’s a depressing statement, but one that gives pause for thought.
The phrase mentioned at the start of this piece about never seeing a poor bookmaker might be true when you’re looking at the top end of the industry, but towards the bottom there are plenty that are just about scraping by. It certainly isn’t the job awash with money that many think it is. Unless on-course punters can find a way to change their fortune, they may not be around for much longer.
There’s A Novelty Factor Betting On Course
All is not lost for on-course bookmakers as many people who go to live meetings prefer to bet with then rather than online. It is part of the experience to walk past the rows of boards in the tattersalls choosing your bets and finding the best prices. It can become a game to see if you should get your bet on early in case the odds come in or wait until the last minute hoping the odds will drift out.
Bookies therefore will always be a fixture and fitting at race tracks, especially for any big meeting like the Cheltenham Festival. It is a reality though that the market is getting tougher and tougher to operate in and the number of on-track boards is likely to decrease further.
There is also the worry that as independents struggle more and more that courses will become generic, featuring the same old big named operators, and in effect reducing the competition. Could race courses become like high streets, with everyone looking the same?