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Thanks, Ian – I’ll wade through them. I tried to speak to someone at the Gaming Board a while back, but they really knew nothing about betting (not their fault as it is not part of their remit yet). If I can think of anything constructive the men/women at DCMS will hopefully understand what I’m going on about. Like TDK it will have to wait until I’ve been through the form for tomorrow.
We have to accept that exchanges raise integrity problems. We also have to accept that this is not new but only an extension of the present problem presented by bookmakers (ie any type of laying allows someone to benefit froma horse losing). Most layers on exchanges are not using inside info and nor are most bookmakers. But there must be a percentage of both that are. The mere fact that bookmakers are licensed offers little comfort at present. There are around 3500 (correct me if I’m wrong) bookmakers in the UK – who knows who most of them are, what they are doing or who is really behind some of them? Going back a couple of days Gringo said that pitches are registered (re on-course bookmakers) but even if you or I found out what the bookmaker’s real name was I’m not surte what that would tell us. It certainly doesn’t tell you whether or not they’re on close terms with a rich blacksmith or a jockey.
Of course exchanges magnify the problem but at the end of the day the real question is one of adequate regulation. Both exchanges and bookmakers are under-regulated. That is not the Jockey Club’s fault and there is nothing they can do it about it.
The long term (and realistically only) hope of improving things rests with the Government’s plans for a new Gambling Commission. I don’t know if they have their own specialists or not but if they’re going to get this right then perhaps instead of just firing off angry messages to each other on this forum the more expert of you could offer them some practical suggestions for improving things.
Just to pick up on a point that Gringo made – it is not true to say that if you have a bet with a bookmaker you know who he is. For instance, how many on-course bookmakers trade under their own names? Bookmakers have survived and thrived on having more information than punters. Well before exchanges came on the scene prices would drift for no apparent reason – well it was because the bookmakers had inside information. It is naive to believe that insiders wanting and being able to lay horses is a new phenomenon. Exchanges merely make the process more transparent.
The conversation is getting a bit confusing about who’s saying what, but if redman is saying that the UK Government will never allow an industry SP he’s right. A Minister said fairly recently in Parliament that there was nothing sacrosanct about the SP system so they won’t die in a ditch to protect it. On the other hand the OFT wouldn’t allow the off course boys to act as aprice-fixing cartel. If the SP system is ditched there are probably only two options for replacing it. The first is that each off course bookmaker returns their own prices (pure competition and bound to find favour with all parts of Government which is competition mad) and the seconnd is that there is some sort of transparent exchange type market that the big bookmakers all use and some ‘independent’ body like the SP executive uses to some mechanism to extract mid-point prices on. The problem with the last of these is that we;re back to having to find some acceptable formula relating to bets being laid for serious money rather than just the longest price on offer for a fiver.
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.
