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Ginger, what you suggest sounds sensible. But bear in mind that such a system would give the Tote only a gross profit on those figures. I’ll tell you now without checking, they could not fund their business on that. They’d show a substantial operational net loss.
Now, if they could raise the investment to withstand those net losses for a long enough period to build that monopoly (and I think you’re not far away, they probably would in time, from a sheer value viewpoint), they’d have a chance.
But forecasting how long that period would be is the killer: would an investor swallow five years of substantial losses for a long term return? Yes, probably. Would he swallow 25 years? Who knows.
Bear in mind that bookies are currently grossing about 15% from horse racing, and some cannot make a net profit from it (the key reason most independents have gone from the game). The big guys, with their economies of scale, are getting between 1 and 2 percent net last time I checked.
"The big guys, with their economies of scale, are getting between 1 and 2 percent net last time I checked."
Steeplechasing,
Are you referencing the big guys shop operations only or overall? Do you have any data or a link to validate those percentages?
Cheers
Yes, Ricky, football turnover is big, and growing all the time. It’s simple for the punter to understand, and doesn’t carry levy costs or media rights costs, so it delivers much higher margins.
Racing’s main mistake is making itself the least profitable product a bookie can sell. Some would say, good for racing, grab the cash while it’s still a sport that’s popular with punters. But that’s not a good long-term strategy: if costs remain high, bookies will continue chipping away, steering punters toward football, dogs, machines and other more profitable products, continuing the steady loss of market share racing has suffered for the past 30 years – that market share graph has never showed an upward spike…it’s down, down down with nothing to arrest the fall.
All the fingers in racing’s pie, should be pulled out and tapped against the heads of those with brains enough to realize that if they cut the costs of media rights/levy to a point where it’s more profitable for bookmakers than football, guess what the bookies would then be selling hard?
Racing’s main problem in this ‘battle’ is that – until the appointment of Nick Rust – most of the nous resided in the boardrooms of bookmakers.
The bookies aren’t to blame for Racing’s ills: Racing is.
"The big guys, with their economies of scale, are getting between 1 and 2 percent net last time I checked."
Steeplechasing,
Are you referencing the big guys shop operations only or overall? Do you have any data or a link to validate those percentages?
Cheers
Yes, the Hills/Ladbrokes/Coral end of the market. I don’t have data I can point you too. I’m just reporting the response to my questions of senior figures in the industry. It’s ten years since I last worked in it full time, but that percentage figure chimes with my own experience back then.
racing’s main problem in this ‘battle’ is that – until the appointment of Nick Rust – most of the nous resided in the boardrooms of bookmakers.
The bookies aren’t to blame for Racing’s ills: Racing i
Heartily agree with this …racing has allowed itself to be short changed and shafted time and time again
But with PMU the
game changer starts ..
..and the destiny of racing lies in its own hands ….but will we ever see it ???
A tote monopoly won’t work. People already have the option of betting with the tote and most prefer bookies. We have a different culture to other countries. The problem for racing is not that bookies are turning people off racing, it’s getting them interested in the first place that is the issue. People are more and more betting on things like football (with bookies) and other things such as poker. The young just do not have an interest in racing and a tote monopoly will do nothing to change that.
How will a tote monopoly work ? Are we to have hundreds of shops started up ?
I expect plenty said the same when someone tried to start an exchange 15 or so years ago.
You state people have no interest in racing but according to betlarge in an earlier post there is tremendous interest here particularly when compared to France yet they have a successful Tote despite apparently it not being much good, so no good reason why a good one wounldn’t work here is there?
As bookmakers have little interest in laying decent bets any more may be they and their shops could be used as commission agents for a PMU, money for no risk would surely satisfy the parasites.
So what is your experience with bookmakers Ken or are speaking on behalf of others like betlarge?
Do you have a highly profitable relationship with them and no problem getting a bet on?
Huge differences between the exchanges and tote. With the exchanges you are betting at fixed odds unlike the tote and they were not set up as a monopoly.
There isn’t a big interest in racing here comparative to other sports. Young people ( which are the most important) are betting on other things such as football, poker etc. There is little interest in racing by the young.
Bookmakers already except tote bets but most choose not to use it.
I only speak on behalf of myself. I don’t bet big and so have really had no trouble getting bets on. In fact I often bet on the tote, I like tote betting and had an account with tote credit for years since the early eighties.
The issue isn’t about having a tote but having a tote monopoly. People are not used to this type of betting and when they are moving away from racing for betting purposes as it is it is highly unlikely they will come back to it if they have to bet in an unfamiliar fasshion.
It’s all ok quoting what takeout figures etc should be but these are figures picked out of the air. To set up a tote will cost huge amounts of money, where is this to come from ? It will have to be profitable from day 1. You need to cover running costs, marketing and sponsorship, money for future investment. All this before we even talk of making enough money to invest in racing.
All ok talking about other countries but most of these have only ever known tote betting and,not all are a utopia. Aerican racing is in trouble and is only propped up by profits from slots.
I’ve put this to the top for Rust & Co.
Why bother with a farce of the new Horseracing Bettors Forum when the info is already out there.
I’ve put this to the top for Rust & Co.
Why bother with a farce of the new Horseracing Bettors Forum when the info is already out there.
You seem to be Bittar Yeats. :lol:
Value Is Everything
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