On racetracks and TABs around Australia why can't a punter back a horse to lose, as well as win - after all he or she can do it legally on Betfair. Bookmakers and TABs have to get rid of their narrow mindset and become innovative to take the industry forward.
Nothing in the world ever stays the same. As a measure of that statement when I started my working life, in 1972, I was 17 years old and went to work for the National Bank. The customers wouldn’t stand in one long line like they do now, they’d line up behind their “favourite teller”. Now people line up in one line and go to the next available teller. That makes more sense. Back in 1972 there was an ashtray at the front of every teller’s box. The customer was welcome to stand there in front of you and have a cigarette or a cigar – no problems. Not a soul ever complained about the smell of cigarette smoke, or cigar smoke, even the non-smokers. The staff could smoke at will in the bank branch – no problems there either. None of this walking 100 metres away from the office to light up rubbish like they do today. Just light up and have as many smokes as you liked per day. Imagine trying to do all that these days – there would be an uproar from every do-gooder in the joint. You see the world has changed.
My father once bought a new “Holden Special” motor car. Again I was only a kid. Gee it was impressive, people came to look at it. The world has changed and today we’d laugh at the excuse for a motor car that “Holden Special” was. After all it had no air bags, it would have killed all the occupants in the event of an accident - and so on and so forth.
Television came to Australia in 1956. I remember we school children were given the day off school to watch man allegedly land on the moon on 20/7/1969. Only “rich people” could afford to own a television back then though, so if you didn’t know a “rich person” you would have sadly missed that event.
So the moral of all the aforesaid is that as we go on the journey called life, things change – and it’s important to accept and acknowledge that 99% of the time, everything changes for the better. Forget all this crap about “the good old days”. The nasty health side effects of smoking weren’t known back in 1972 – there was almost no education to the fact that it could be harmful. That “Holden Special” has evolved to become a beautiful luxurious motor car that has been designed to save our life in the event of an accident and that modern day “Holden Special” comes complete with ABS brakes, power steering, air conditioning, a non-breakable windscreen, better tyres, a CD player, a smoother ride, etcetera. That television that only “rich people” could once afford is now in nearly every home and is as big in size as you like, with 50 channels to pick from, not two like it had in 1972.
In racing though, nothing changes. The respective course proper at each of Eagle Farm, Rosehill and Caulfield is basically the same as it was in 1972 and the staff just keeps the track up to the mark. Not one of those three racetrack committees in the last 40 years has said “let’s build another course proper inside, or outside, the one that existed in 1972, so that we have less wear and tear on the one course proper”.
In betting, nothing much has changed, except nowadays you aren’t asked to leave the TABs as soon as you’ve had your bet, or you’ll be charged with loitering, like happened in “the good old days”. And now you don’t have to wait until after 4pm to collect a winning dividend from earlier in the day, like you did “in the good old days” either. The TAB opened in Australia in 1961 with the express purpose of stamping out SP betting. It’s been a major success story in getting rid of backyard SP operators, but it works basically the same way today as the first day it opened, in that a client - called a punter - invests his or her money on a horse, greyhound or trotter with the express purpose of making a profit. Today that “horse, greyhound or trotter” punting entity has spread to encompass many kinds of sport like football and golf. In the “supply and demand” situation of gambling, the TAB takes its percentage of the overall pool first, call it tax as that’s what it is - and the resultant pool that is left is distributed between the punters who have backed the winner.
As the TAB evolved, that “tax” model hasn’t evolved to where it needs to be, to keep government or the racing industry happy. The TABs and the governments got greedier and that “greed” changed in that the standard win and place betting of yesteryear developed to also include “exotics” betting like we have today, via Trifecta, Quinella, Exacta, Treble, Daily Double, Quadrella, the First 4 and so on.
For their part bookmakers haven’t changed their model much either since the beginning of time. They put a market up on a race and their client, also called the punter, can either take that price or leave it. If they don’t like the bookies price they can invest their money on the race at TAB, or vice versa, if the normal TAB punter doesn’t like the odds that the TAB is offering, they can redirect their investment to either an on-course bookmaker, or a corporate bookmaker.
It’s a fact of life that both the bookmaker and the TAB has been totally responsible for their own demise, as both entities have got more greedy over the years, with bookmakers regularly offering ludicrous high percentages on races, meaning the punter finds it virtually impossible to finish in front in the long term, as the odds are far too stacked in favour of the house. Similarly the TAB has never looked like dropping its percentage take, to assist in generating additional turnover due to the punter getting a better return for their investment, the point being that it is a totally vicious cycle between the four involved parties – namely the TAB, government, bookmakers and punters. Since the dawn of time, the bookmaker also decided with each way betting that one quarter of the odds for the place was fair, yet now many bookmakers pay less than a quarter – even though the “quarter of the odds for the place” model allowed many thousands of bookies to retire as millionaires. The modern day bookmaker also exhibits what I’d call “outrageous behaviour”, in that some won’t accept an each way bet under a price of $5.50 - and all this allied rot. The punter already has 649 variables of racing working against them backing a winner and then when they have all these added restrictions placed on them by greedy TABs and bookmakers, such as no quarter of the odds for a place in each way betting, or no each way betting under $5.50, with the end result being that punters just walk away from racing. And when they walk away - where do they go? Well really in the last 40 years only one major change has happened in respect of the concept of betting on Australian racing and that seven letter word is “Betfair”. When the Tasmanian government welcomed Betfair to their shores, suddenly the rest of the Australian racing industry was mortified. “Don’t let those parasites into our country” - and the allied hue and cry that went up - the chorus of discontent from racing officialdom was deafening.
Why has Betfair been such a hit? Put simply it allows the punter to suddenly become a bookmaker without 1) all the tough probity checks that are required to get officially licensed by a racing authority as a bookmaker, 2) the punter has no associated staff costs, 3) fielding fees don't exist for the Betfair punter, 4) the Betfair member laying horses or dogs has no requirement to set a punter to lose a certain minimum amount like a bookmaker has and 5) the Betfair member doesn't need to attend a racetrack to ply their trade, as the punter who is playing bookmaker via Betfair, doesn't need to leave the sanctity of their own home to legally lay horses, greyhounds and pacers.
Whilst Betfair works off generally a smaller percentage of “take”, than both the TABs and bookmakers work off, understandably the recent High Court victory that the racing industry has had, will see Betfair forced to increase its percentage of take, but it will nevertheless still have a highly appealing product to the general public even with a higher "take".
As far as I'm concerned, the emergence of Betfair has proven that both bookmakers and the TABs have been totally braindead on the betting front in this country. Both entities have stood back and witnessed first hand the amazing impact that Betfair has had on the Australian racing scene, but they have not done one solitary thing to improve their business via improvising and introducing some derivative of the Betfair model. In short, the modern TAB and the modern bookmaker need to get out of their “ashtrays at the front counter, Holden Special and two channel television” mentality and look to the future, as they have both collectively missed the boat. Put simply, the punter of today, even though they are primarily from an ageing demographic, wants to be both a punter and a bookmaker. He or she not only want to be able to back the 20/1 chance each way that they think is over the odds, but they also want to have the option of laying the even money favourite to lose. And not one of the TABs and/or bookmakers of today are allowing the punter to do that. Both the TAB and the bookmaker will bet the punter “a price to win” about their selection – but given that the top echelon of both the bookmaking and TABs ranks constantly tell the world that modern gambling "is all about percentages", why can’t that exact same bookmaker and/or same TAB bet a punter a price about a horse to a) lose, or b) to not run a place, or whatever.
So for instance if the bookmaker only bets the punter a price of even money ($2.00) about a horse winning, why can’t the punter reverse the role like he or she does on the Betfair model – and back that horse to lose with that same bookmaker? Ditto the TAB. After all, the bookmaker and the TAB are the entity who, by offering a set of odds, is thus suggesting that that price is fair in the marketplace. Therefore if the prices they are offering are deemed "fair", does it matter if the punter wants to back the horse to win or to lose? Why can’t both entities of the TAB and bookmakers display a win price for a horse if a punter wishes to back it to win - and a lay price if the punter wants to back a horse to lose? In fact why can't the price be exactly the same across both scenarios when betting opens up on a race and then each price is obviously adjusted in accordance with the supply and demand factor? It’s not difficult if you think it through – for like I just said “it’s all about percentages”. So in other words, the current system allows for the odds to be displayed for the punter to back a horse, greyhound or pacer to win. However the majority of modern day punters also want to be able to walk up to a bookie and/or a TAB and have $200 on the even money favourite to lose. Take this following scenario that I came up with to show both readers - and the industry - how my proposal would actually boost turnover significantly. And remember all the time that if we could "boost turnover significantly", particularly at the TAB, the "tax" aspect is automatically significantly increased, meaning more money can go back to the industry for prizemoney increases, infrastructure improvements, etcetera. As with the current system whereby the percentage (tax) comes out of the TAB pool before a dividend is offered and/or declared – and the same thing would happen if the TAB was laying the punter for that horse to lose. And forget all the rot about it being unethical or against the integrity of racing to back a horse to lose, as when is the last time you saw the racing police, who are formally known as stewards, note in one of their reports that there was abnormal betting activity on Betfair over either a beaten or winning runner? The answer is there hasn't been one for years, as the stewards don't care, primarily because they cannot monitor Betfair betting activity to any major degree, as Betfair has been so successful, that to follow a money trail would be akin to solving the Rubix Cube in the dark.
My scenario, shown in layman's terms, is that if the normal TAB hold on a race was to be say $100,000 in the win pool on that race, well if that TAB offered betting to enable the punters to back a horse to lose, that additional "lay pool" may be say $50,000 sourced from punters wanting to lay horses to lose, so now instead of holding $100,000 in the win pool we have a $150,000 pool hold. The on-course bookmaker can operate exactly the same. If he held $100,000 on the race, via offering a "lay" option he can now have a much higher hold than $100,000. Again if it is thought through, ticketing for the idea is easy, as the bookmaker would have the normal ticket if a punter wanted to back a horse to win and say a dark red ticket if the punter wanted to back a horse to lose. The original ticket would be embossed with wording of say "punter backing horse to win" and on the red one "punter backing horse to lose", so there is no way the both parties in the contract can confuse the bet. The TAB could do the same. They could use dark red tickets, with associated wording, to show it was the punter laying the horse to lose.
Both bookmaker and TAB turnover would "increase significantly" under my proposed model and that increased turnover could even be so significant that it would allow for a reduction in the present tax rate on TAB win and place betting from say 17% to 14% - and yet that 14% (of $150,000 = $21,000) will still be returning more to the racing industry than the current 17% (of $100,000 = $17,000). Additionally the current TAB turnover model, which is the accepted life blood of the industry, is treading water from an annual growth point of view - and is on a one way trip to oblivion, unless some new products are introduced very quickly.
A concept of just how pathetic the current TAB model punting model is, is demonstrated via the fact that a punter can back a horse, greyhound or trotter and be paid $1 - or money back - for their bet, if the equine or canine athlete wins. Where else in society would you be asked to part with money to have no chance of financial profit, not even 1% on your investment, yet you can lose 100% of your stake if the racing athlete is beaten. From my recollection of events, many years ago, the TABs used to treat horses or greyhounds that had over 50% of the pool invested on them as a “refund scratching” - and that money came out of the pool and was returned in full to the punter with no loss of stake, but nowadays the poor old mug punter can back a horse and suddenly it’s paying $1 money back for each $1 investment. So if the subject horse or greyhound that is paying money back wins, the punter gets his or her money back, with no potential for a profit on the bet, but if the horse or greyhound runs eighth, he or she loses their entire stake, meaning the punter is stuffed either way. That’s nothing more than a disgraceful rip-off in 2012. In fact that type of punting is most certainly not exciting for punters and as such it represents a major turn-off. On Betfair there are so many “bookmakers” that no horse or greyhound will ever pay money back. Similarly, if a punter could go to the TAB and lay that current "money back" horse or greyhound to lose, the TAB would still get their percentage of his stake.
In conclusion, a model revolving around the Betfair theme is the only hope for the racing industry growing into the future.