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Totally agree Cavellino re a competitive Tote and would certainly see that as part of the longer term solution.
Sean, the 2 main exchanges have approximately 1.3 million matched per race pre off. A well run Tote with a 5% win takeout could conservatively pool 200 grand per race. Thats 10 grand a race, times 28 races a day, times 363 days a year. 100 million a year, lets say 50-60 million a year for racing after costs. I’d happily come off the exchanges and contribute more into racing, if I had a product that offered value, I’m sure there’s plenty like me. The high street presence is already there. The bookmakers would soon get competitive again.
The trouble is, everyone at a high level in racing wants to keep tapping the bookmakers. Any FTSE 100 company’s priority is to their own bottom line, not racings. Its delusional to think otherwise.
The solutions are there, maybe Andy Stewart can implement.
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Barry loves it!, great thread from an onlookers point of view – keep it up guys.
Wouldn’t disagree with any of that at all Cav. The die has been cast now for a very low margin method of operating. How low that margin can be if the offering includes on course units, off course shops etc remains to be seen but certainly agree that a competitive tote should be at the heart of Racing’s thinking. I would also suggest that true competition will only exist once taxation of exchange business is rationalised but so far that’s something government has not been willing to tackle.
Is 5% sustainable on the high street though Cav? Betfair’s advantage is that they don’t have to pay ground rent and bills etc that are associated with a high street presence.
Is 5% sustainable on the high street though Cav? Betfair’s advantage is that they don’t have to pay ground rent and bills etc that are associated with a high street presence.
2.7% is sustainable on the high street as the zombie machines illustrate
Maybe so, but a bookmakers turnover on those products is about 10 times more than what they’d taken on racing.
5% is a ballpark figure, probably sustainable on an internet based model. Perhaps the shop players would have to pay a 1 or 2% premium for the benefit or heat, light, staff etc, but would still get a product that offered prices a lot better than the current setup. Engaging high street customers will be essential in taking the fight to the bookmakers.
Maybe so, but a bookmakers turnover on those products is about 10 times more than what they’d taken on racing.
Turnover isn’t a constant. It increases as vig reduces.
Too many layers can’t make it pay at all which makes them vulnerable to pressure and prone to bending the rules to make ends meet.
Would anyone who does profess to understand the intimate workings of betting markets care to explain in plain English why "many layers can’t make it pay" nowadays?
Whereas way back whenever most did in the long run, if always teetering on the profit ‘n’ loss knife edge common to any low margin high turnover business.
Is it:
…fixed costs wiping out the diminished gross profit generated from a diminished turnover ??
..due to the ‘for all to see’ transparency of the exchanges and market efficiency becoming too ‘strong’; hence other than the somewhat mythical ‘guaranteed’ profit provided by the over-round, there is no or little edge ??
…due to bookmakers today being little more than ‘slaves to the machine’ hence are no longer capable of independent thought and don’t ‘take a view’ because they’ve lost the knowledge their forefathers had of ‘form’ (in the broadest sense of the word) ??
…or what?
I think it’s the perfect time for a proper cards on the table discussion about where we’ve got to and how we’re going to move forwards.
Well here’s a ten-high fold for your consideration:
Off-course generation of industry SPs reflecting the usual weight-of-money and ‘opinion’ forced markets the particular bookmaker is subjected to. The SPs can either be unique to that bookmaker and its punters, or the "trilaterals" and smaller brethren could agree a pan-industry collated average
The Betfair SP to become the official SP recorded in the papers and formbooks
On-course, a wholly separate market designed to cater for the racegoer only. Bookmakers with an off-course presence will not be permitted an on-course licence leaving the market to the ‘stand alones’ who will stand or fall by their opinion, initiative, knowledge and wizardry with field books
The Tote to receive the hard-but-necessary kick in the jacksy discussed above by CR et al
I’d say you’ve largely answered the ‘can’t make it pay’ question there Drone. We’ve moved from a time when tissue odds compilers plied there trade and priced up races using their own judgement and where very small numbers of races were priced up early to a time now where all races are price up early by a range of bookmakers, exchange markets are up 24 hours in advance of racing resulting in the most advanced ’tissue’ we’ve ever seen. Early ricks get ironed out, false favourites weeded out, non jiggers knocked out and so on (there are obviously still exceptions from those outfits able to keep their cards close to their chests till the off but you get the idea). The on course market is no longer the place you have to be to get a price and is much weaker. Pitch reforms introduced a generation of ‘gambling’ layers who thought they could make it pay and learned the hard way in a time of plumetting margin that they couldn’t. There are plenty of pitches available these days for anyone who thinks it’s an easy way to make some money.
Betfair’s edge over other operators is not just their lower overheads. They have zero risk. Moreover, those who are supplying all that lovely liquidity on exchanges, whilst billed as ‘person to person’ players include layers, market makers and traders who are working with very good technology to offer markets at cutthroat prices. They can do this as (unless they are licensed bookmakers) they are not required to pay any income tax, corporation tax, gross profits tax, horserace betting levy, VAT, PAYE etc etc etc…
That’s an area that will make it difficult for even the leanest and meanest tote system to compete and will probably require now internationally concerted efforts to address I’d have thought. As for the BF SP, it’s still pretty flakey isn’t it?As for the BF SP, it’s still pretty flakey isn’t it?
Like the Premium Charge I have no idea how the BFSP is calculated, nor have I ever used it.
However, is it likely to be any more "flakey" than regulation SPs are nowadays?
I’d suggest BFSP is a more accurate measure of ‘true chance’ than SP given the negligible over-round and freedom from nudges by third parties with a vested interest in strangling it
Over a representative sample do BFSPs returned at 3.0 win ~33% of the time?
i.e is the BFSP an accurate measure of the market’s efficiency?
Or have Betfair still to hone its calculation?
Allow me Drone to be the meat
in a sandwich of heavyweights
The BFSP…
At the off the current price
has all waiting lay and back SP
offers added to it.
Resultant price is the BFSPYou can roughly
check the amounts waiting
to be added and have an idea
where it is likely to go
ie shrink or extend.I’d suggest BFSP is a more accurate measure of ‘true chance’ than SP given the negligible over-round and freedom from nudges by third parties with a vested interest in strangling it
Over a representative sample do BFSPs returned at 3.0 win ~33% of the time?
i.e is the BFSP an accurate measure of the market’s efficiency?
Or have Betfair still to hone its calculation?
Its pinpoint, deadly accurate, super efficient.
2009 at actual BFSP…..
9043 – 90072 = SR 10.04% ROI% at BFSP -1.52% over the year. (-25.07% at bookmaker SP) No favourite/longbias exists, BFSP is efficient across the entire range of prices.
The bookmakers could have easily scuppered BFSP by creating big imbalances on one side of the back/lay but they didnt.
There was that embarrassingly short
Grand watering National
favouriteThat was the day Betfair decided to give new members a free introductory bet, Gamble. The new members promptly stuck it on Comply Or Die at BFSP and created a huge imbalance on the back side. Betfair had to go deep into the exchange prices to match the SP back amounts, some 70 grand’s worth, thus dragging the returned actual BFSP to almost nothing, hence the manipulation they used to solve the problem.
Thats a one off though. Its a product thats very open to being totally scuppered at any time, the fact the firms dont do it speaks volumes imo.
99% of the time it works great, albeit at niche level only.
Thank you gents
Point well made regarding the absence of longshot bias CR
Given the remarkable efficiency evident in your figures it reinforces my belief the BFSP should become the ‘official’
Admittedly, it matters little what is reported ‘for information only’ in media racing results but for those wanting to crunch and interrogate price data in formbooks the superior accuracy of BFSP can only be a boon.
Odd fractions were very pretty but dull decimals are the future
CR quite right re accuracy over time. Negligible longshot bias to be expected of course due to negligible overround. ‘flakey’ was probably an inappropriate term but I’m always struck by the very tiny amounts actually settled at SP and on the few occasions I’ve dipped my toe I’ve had some nasty surprises. I once laid a fav which shortened several ticks from last show to SP and on inspection found that my (not at all large in the scheme of things) SP stake accounted for half the amount matched on the lay side! I would imagine that element of guesswork keeps a lot of punters away from the BFSP but might still be useful Drone for reference purposes as you say.
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