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Industry S.P.

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  • #4314
    Nick Hatton
    Member
    • Total Posts 399

    Today Kieren Fallon rode a very big price 4 timer at York, but as pointed out on ATR by Patrick Kinghorn the off-course firms failed to shorten the final runner which actually drifted from an opening show of 2/1 right out to 3/1 before eventually being returned at 11/4.

    This surely poses a few questions ……..

    1)  Do betting shop punters actually place multiple bets purely based their favourite jockey ?

    2) Did the big 3 (should be tiny pathetic little 3 IMO) attempt to shorten the horse up ?

    3) Did the big 3 fail to shorten the horse up as they would have liked due to the on-course market being tied to a strong market on Betfair ?

    4) Will industry S.P.’s happen in the near future ?

    5) Should we be concerned ?

    Any opinions would be extremely welcome.

    Nick

    #102971
    Smithy
    Member
    • Total Posts 720

    And while you are there TDK, why can’t i have a bet on the Lockinge with Corals now?

    #102976
    wit
    Participant
    • Total Posts 2155

    Hi Ian

    Couple of months ago Argos and Littlewoods were fined £22m by the OFT for price-fixing in relation to toys such as Monopoly and Action Man.

    Though there was no formal agreement between them, the OFT decided that they were exploiting a market phenomenon whereby if one decided on a price for a toy, the other tended to follow suit, and due to their predominance in the market, what the two of them did effectively set the standard for the whole market.

    Apparently most consumers look up the price of the toy with Argos, check the price with Littlewoods (or vice versa), and that determines what they’re ready to pay.

    You might say "If a punter can’t be bothered to do that [shop around] and get value for himself, why should we be bothered if he gets ripped off", but price-fixing is seen as theft from the consumer and often is implied from observation of a market.

    Difficult then to see how somethiing as blatant as an industry SP could be squared with the competition laws.

    So real question is whether the Big 3 really want to compete among themselves in returning their own separate individually-arrived-at SPs ?

    <br>Best regards

    Wit

    #102977
    Dungheap
    Member
    • Total Posts 113

    Wit,<br>There is one major difference between, a monopoly game and "industry SP", Argos et al know their own purchase price of the product, the "big three" have to second guess this price and then change as the market does.<br>There are those consumers that will not for whatever reason, look up the price of the game, and buy it at the first sighting.<br>Many of the betting shop punters are, not computer literate (and will never be) and many do not even own a computer, so to them an industry SP is preferably as it is their only protection.<br>Many of us can sit here and scoff at the lack of knowledge, that these punters have and deride them. But I would certainly put forward the proposition, that nearly all the punters on this forum have done it, before they found that magic thing value. The only difference being our education and social backgrounds.<br>There must be an industry SP, or quite simply there will be no new entrants to the bettors market, because if people get ripped off, initially they will not be back.<br>Until the latest generation of, entrants to the betting market complete their induction to the market, and become the old sages to pass on their knowledge to new punters, about internet betting possibilities. Then the status quo will remain, until the point at which the big three force change.<br>Arguably the OFT can not do much about prices, as they are arguably,  dynamic not passive, and reflect the current market position.<br>The most overlooked fact, though is that the market is about "personal opinion" an intangible product , that the price reflects, and as such, whovever accepts a bet will want their profit margin overall.<br>With the advent of betting exchanges and now the rails being allowed to lay off onto exchanges, indirectly the big three can enter the exchanges, means you can effectivly lay the big three!!!<br>The Industry SP will stay, if only for historical records, where it is formed and who does it, is irrelevant as long as it is a "free market", which before the advent of exchanges it certainly was not.<br>Should we be concerned? I thought we always were.

    #102978
    cubone
    Member
    • Total Posts 70

    Dung… what is wrong with the Starting Price structure that exists at present.

    Say 40 Bookmakers all independant of each other creating a market, that has stood the teat of time for over 100 years.

    If the big three wish to shape the market to safegaurde there liabiilities they can hedge into that market.

    With the introduction of the very competative exchanges the on course market is now trading to a less % than they did before the introduction of those exchanges <br>The alternative is a Industry SP controlled by the big two.

    How can that be in the interest of the offcourse punter.

    Parliament since 1928 have fought very powerfully to maintain the independance of the SP structure.

    What is wrong with Racecouse Starting Prices, and Industry Prices, and Exchange Prices, the more the merrier.

    Competition Rules. or so it should.

    Cubone.

    #102979
    Dungheap
    Member
    • Total Posts 113

    Hi Cubone<br>The SP price must be at the final point of where the money goes.<br>Bettor>bookie>rails the old/present method<br>Bettor>bookie>rails>exchange<bettor the new order.<br>If there is no final all encompassing SP, then the market in part or whole can be distorted or manipulated.<br>The excahnges must now be part of, or become, within the SP compilers equation.<br>The very idea of having differing SP is dangerous, an example is american prices, against british prices on a particular race, with the advent of exchanges and the internet I can place my bet and LAY wherever I want.<br>But what if there was a good price at say Hiralbrokes, they might always give me the RSP the IP or EP, which ever was lowest.<br>The protection of the betting shop punters, is one of the most important parts of the whole racing industry. They are the future US, and are do not have the protection when there is multiple prices.<br>Ian <br>Our posts crossed, you did understand me right.

    (Edited by Dungheap at 1:02 pm on May 15, 2003)

    #102980
    cubone
    Member
    • Total Posts 70

    dung.. I agree partly but isnt it fair to say that you can only protect the punter so much, he also should know if he is being abused and I am sure that the industry watchdogs, Government,, that have a duty to see fair play would bring it to there attention,,, for some time now backing horses has only been the method of inducing punters into the shops so that they play on more lucrative games.<br>There is a good argument that the % profit of the racing industry should be very competative, and in fact it may well become a loss leader. if the exchange service is fully introduced into the SP structure.

    We have a Tote system, why not an indipendant SP structure,

    An industry Price structure created by the offcourse industry is more of a worry to punters than the other two.<br>In my oppinion.

    Cubone.

    #102981
    Dungheap
    Member
    • Total Posts 113

    Ian,<br>I agree with you totally caveat emourer (if I have spelt it right), all the prices can be there and are there now.<br>But we all know of the betting scams that happen, if the SP is fragmentised then, another genie will be out. I <br>think that we are lucky in that we do not have a pari-mutual kind of straight jacket, nor do I wish for one.<br>But as cubone rightly pointed out it has worked, for the good over a number of years, lets see if the baby is worth throwing out first. (LOL). <br>A In a similar vein, all the privatised businesses have an OFsomthing, a standardised SP is racings OFsomthing.

    Cubone<br>How many shop punters bet on the tote, only the enlightened. The price structure is formed by the punters at the moment, that’s why horses etc shorten or lengthen. <br>Hiralbrokes will allways try to manipulate their bettors to spend spend spend, but the industry as a whole needs an SP because not everybody is capable of a)the maths b)the concept and c) the technology to form their own enlightened book.

    #102982
    No axe
    Member
    • Total Posts 5

    Despite the various views expressed here there is an inevitability about what will happen and the only question is when?

    The Big 3 and others have venture capitalist and shareholders to placate.  The fall in horserace margins, partly due to exchanges and partly due to the NJPC Pitch reforms, has hurt them but has been offset by the phenomenal success of fixed odds betting terminals.  However, the Government has alreadt told parliament that it will act to curb those machines.

    When that happens, if not before, the bookmakers will have to take control of the pricing structure for their main product (ie horseracing).  The OFT will prevent them operating as a cartel and they will not be able to produce an ‘industry SP’. Instead they will be forced to produce their own prices (as they already do with some other products) and return Ladbrokes, Hills, Corals Tote etc SPs.

    In fact this sort of off-course competition is the main reason they want to keep using the SP system.  There may be a short term PR downside in dropping it, but that would soon pass.

    #102983
    wit
    Participant
    • Total Posts 2155

    Hi Ian, Dungheap

    I don’t disagree with much of what you say, but on Nick’s original question of whether the Big 3 could get together and produce their own unified SP  – no, the OFT just won’t let that happen.

    The "market" is not unified – the folk who spend their time in betting shops are, as you both say, different from those who have computers, and that makes them as a market very vulnerable to the Big 3.   That’s why they need protection.

    The best the Big 3 could do, as No axe affirms, is for each of them to run their own SP from their own book.

    They won’t do that (a) because it will confuse their punters and (b) maybe also because their shop business is less and less reliant on SP on horses.

    IMHO the thrust of the shop trade is heading for something between an amusement arcade and a casino, with the push on virtual rather than real horses, plus self-owned real dog tracks.  

    Best regards

    Wit

    #102984
    cubone
    Member
    • Total Posts 70

    In the 1800th century punters would bet with Bookmakers with there prices nailed to Oak trees at Hyde Park Corner, and the Myndon in Leeds.<br>It wasnt until 1790 that the god father of horserace Bookmaking began to offer prices on  horses against the field instead of match betting. his name was Ogden.<br>The prices offered at Speakers corner where all in run or not, and the industry itself realised that that situation could not last forever.<br>There was also a stance by the police to move the existing Bookmakers away from these sites. <br>The majority moved into buildings, the best known being the Alliance Club and The Bentinck.<br>Although raided on a regular basis illegal Betting continued.<br>During the period a firm of Bookmakers called Valentine and Wright decided to offer there clients the same odds being offered at the racecourses by the followers of Ogden.<br>Adverts began to appear in the sporting papers, stating that all bets placed with them would be governed by a price calculated by the press and known as the returns.<br>Starting Price, the price governed at the time that the race commenced.<br>It would appear that the first official starting price was in the 1883 Evening News. this took off overnight and was excepted by the general public as fair.<br>The circulation of the paper doubled.<br>Most of the Sporting Papers seemed to disapear during the early 1900s until there was only the Sporting Life and Sporting Cronical.<br>However it was not until 1926 that both of these papers returned a uniformed return.<br>The fact that the Starting Price has carried on to the present day clearly indicates the integrity of the system.<br>During the time there have been so little actual abuse, considering the transactions that have taken place, that it will be very dificult to find a replacement.<br>History shows that the first real breech of the integrity occured in 1927 at a small gaff track called Tenby, where the starting price returner and a Bookmaker, conspired to return a very strongly fancied favourite at 16/1.<br>The honour of the offcourse industry was such that all winning bets where paid in full.<br>In the 40s the leader of the rings Maxie Parker bagan the system known as the Knock Out, where large amounts of money would be placed at SP and a conspiracy of oncourse traders would force the prices out.<br>There have been a few coups where the starting price structure has been targeted.<br>1953 Francasal ,,Bath where an attempt to sever the telephone lines to stop the free flow of hedging money.occured. un succesful.<br>The Gay Future scam, also failed.<br>However if you count the races where the general public have been fully satisfied with the system, the amount of manipulation is insignificant.

    What has happened to the industry in the 21st century that evokes the possibility of this proven system being changed.<br>a drop in attendace at racecourse by actual gamblers, this has resulted in a reduction in the profit margins that the offcourse industry are reliant.<br>What the offcourse industry must realise is that the betting public must be convinced that the starting prices are indipendant of control by the big Bookmakers other than there general right to hedge into the market.<br>No one would be happy to see a situation where the powerful conglomerates can control the prices returned without the method of hedging.<br>There have been periods during the past 30 years where returnes have been shortened by stealth against the interest of the betting public. and all governments what ever parties, have shown concern.<br>We now have a new phenomonum, that is creating a weakening of the oncourse structure, Exchanges, this concept is so popular for section of the betting public that now even fewer gamblers are frequenting  the betting rings. this has resulted in margins dropping to a very dangerious level.<br>But nothing has changed in the starting price structure that stops the powerful offcourse industry from hedging into the oncourse rings and therefore controlling there liabilities.

    Governments since the 1928 Tote Bill, have fully endoresed the nead for the indipendant free market of the Starting Price structure and if they look carefully at Parliaments intention when endorsing the Starting Price structure they will see that this will be best left alone.

    It will never be in the public interest for the Big Three Bookmakers to control the returns themselves.

    Cubone.<br>

    #102985
    cormack15
    Keymaster
    • Total Posts 8798

    Let them bash on and return their ‘own’ prices. They’ll just be hammering nails into their own coffins. No reason why there shouldn’t be official s.p. (returned as now), industry sp and exchange prices. Is there, in fact, any reason why we need a starting price at all – why can’t all bets be struck at a market price which exists at that time (as on betfair for example)?

    #102986
    cubone
    Member
    • Total Posts 70

    I respect your oppinion Cormack but what prices would you return an outsider. and the Exchange. that is being offered at 450/1 to £2.<br>300/1 to £4.and 175/1  to a Tenner.

    Cubone.:biggrin:

    <br>

    #102987
    rory
    Participant
    • Total Posts 2685

    Cubone,

    at a guess, 25/1?? ;)

    #102988
    Nick Hatton
    Member
    • Total Posts 399

    Cubone …..

    That was one hell of a post, and a very intersting history lesson. I’m definitely with you on this one. The S.P. has to remain unchanged. Afterall if there was an industry S.P. it would certainly be hard to get decent prices on the ‘thieving’ E/W horses against hard odds-on jollies !  ;)

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