The Evolution of the Betting Industry

Looking at the options available and the type and number of bets available to punters these days it's hard to believe that bookmaking only became legal in this country little more than fifty years ago.

May 1st, 1961 to be exact in the days when Harold Macmillan was Prime Minister. 

The decision was taken by the Conservative government of the day in order to seek an honesty within bookmaking and obviously to get their share of takings in the form of a tax.

The early betting shops were pretty basic, a small windowless shop with maybe a wooden bench or two for its customers to sit on. 

The walls displayed the runners from a daily newspaper until the idea of a daily racing sheet was born. 

Sometimes if customers were lucky the owner of the shop would stretch to buying a Sporting Life or Sporting Chronicle which were the daily racing papers of the day. 

The owners or managers of the shops would take bets only up until the advertised off time, on a carbon copy duplicate betting slip, with the top copy to be retained by the shop, each bet would be number stamped. 

Customers would come and go, some would sit around and have a smoke and chat with other punters until the results were confirmed, normally by telephone to the shop's owner.

It would be some years before even a race commentary would be heard in the shops.

But betting shops proved popular and there was a rapid growth of them throughout the 1960s.

Across the country, the numbers ran into the thousands, and punters started to understand how bookies operated. 

It was not now the seedy side of illegal gambling in which the bookies runners would meet daily on a street corner collecting bets from eager punters only too willing to part with their cash.

Personally I have some vague memories as a small child of around four years old sitting in one of these old shops waiting for my Dad as he placed his tanner ( 2 ½ p in today's money ) Each Way Trixie, 

The daily coverage was only a fraction of what is on offer in today's shops, on weekdays it would be two or three-horse meetings and one or two dog meetings and punters would seem satisfied with that. 

On Saturday there would be a morning dog meeting and during the afternoon maybe an extra meeting or two on the Nags depending on the time of the year.

As we approached the latter part of the decade the likes of William Hill, Ladbrokes and Coral had built up a fair size estate of shops,

All three companies weres also represented on racecourses across Britain, they were always on the lookout for ways in which to expand and improve their businesses.

 Moving into the 1970's race commentary's had been established for a few years in which they were relayed by a company called Extel.

They would be not too different from a telephone exchange room in some ways.

They would themselves receive the commentary from the courses ( both horses and dogs ) and would have in house commentators broadcasting the races to the betting shops across the country. 

There was obviously a slight delay to the ‘ Live ‘ action and at times it could be chaotic with races going off at similar times and commentators switching from meeting to meeting , 

But it was a step forward nonetheless and punters would at least be able to hear where their money was going. 

More racing began to be covered with the midweek menu tending to be two-afternoon horse meetings and two-afternoon dogs meetings. 

Not only were race commentary's broadcast but also the on-course betting shows and this saw the birth of the betting shop board markers, 

A member of the betting shop staff would write the odds against the names of the runners and punters would now be able to accept prices prior to the races, rather than just having to accept the starting prices which had been the case up until then. 

There were plenty of characters around in betting shops up and down the country only too willing to ask the board marker to delay writing a shortening price for their selection to try and gain the upper hand.

Fixed odds football betting was also introduced with a Saturday coupon produced for the UK fixtures. 

Looking back it's hard to believe that all High Street bookmakers insisted that the minimum number of teams, if one or more home sides were included in the accumulator, would be just 5. 

While if you wanted to back Aways or Draws then you could only bet trebles. 

These days you can back anything in a single straightforward bet. 

It was however another opportunity for punters to part with their cash and the weekend coupon, in particular, proved very popular. 

It gave people another choice to bet of football rather than just the traditional football pools.

An increase in televised football and horseracing no doubt helped an increase in betting turnover for the bookmakers.

 

By the mid-1970s and my early teenage years, I was already well and truly hooked by the opportunity to make money from watching a sport that I loved.

A weekend job on a milk round helped to fund my betting. 

I can even recall coming home in the depth of winter with frostbitten fingers and chilblained toes only to see my hard-earned 50p disappear into the bookmaker's tills some hours later.

I lived in hope though and always thought ( like many other punters ) that one day I'd take revenge. 

The punting helped my school maths lessons too as whenever I did have a win I would only be too keen to work out my returns.

Towards the end of the decade I always felt that a career in the industry beckoned and so it proved when I left education in 1980 and got a job as an office junior and trainee settler for a regional telephone betting company.

It was probably around the turn of the decade when other sports became a little more popular to bet on with Rugby, Snooker, Darts, and Boxing just a few sports that customers were asking for odds.  

But it was still Horseracing and Greyhound racing that took the majority of the turnover. 

A massive step forward was taken in 1986 when SIS ( Satellite Information service ) was formed and the following year ( 5th May 1987 ) the first Live pictures were broadcast in our betting shops. 

The service is predominantly owned by the bookmakers Ladbrokes, William Hill, and Betfred/Tote and it proved an instant success with both punters and staff within the betting industry. 

At last, we could all see where our money was going and the days of the Extel commentary were numbered. I'm sure it was down to having these pictures in our betting shops that proved the reason behind an increase in turnover for the bigger chains of shops in particular. 

More meetings were being put on and Live pictures were being shown every day on horses and dog meetings up and down the country. 

The bookmakers would also increase their maximum payouts and the eager punters would be increasing their bets accordingly to try and get that big payday.

 Unfortunately for the smaller chains of independent bookmakers, it was probably the beginning of the end for a lot of them, they simply couldn't compete with the bigger firms and slowly but surely many of them were squeezed out of the industry.

 Another interesting development towards the end of the 1980s was the introduction of debit card betting, 

Prior to then the betting call centres would simply have on offer a Credit or Deposit betting service, whereas a customer would only be allowed to bet up to their deposited amount or an agreed credit limit by their bookmaker.

The credit customers would then receive a bill at the end of the week or each fortnight. 

Debit card betting proved a success and was welcomed by the bookmakers as payment was assured or no bet was struck. 

With the old credit system, a gambling debt was not legally recoverable. It was convenient too for both parties and although it may seem pretty basic nowadays it was significant progress back then.

What would the 1990s have in store for us? 

Bookmakers and punters alike are always looking for opportunities, since betting became legal back in the 1960's the growth has been phenomenal and the two biggest chains of bookmakers William Hill and Ladbrokes both have over 2000 shops apiece. 

Without a doubt the biggest boom in the history of gambling was the birth of the Internet.

The first online casino became live back in 1994 and once a gaming commission was established and the online gaming activity was regulated many gambling-related firms saw massive room for expansion.

In the 12 months from 1996 to 1997, the number of gambling websites increased from just 15 to 200. 

The following year it was revealed that the online gambling revenue was over $830m and before we knew it the major bookmakers in the UK and across Europe were developing their own websites in anticipation of going live on the world wide web. 

The success and growth of internet betting was huge, we didn't even have to move from our desks in the office or from the comfort of our own living room to place a bet, we had everything there in front of us at the click of a mouse. 

All our usual betting opportunities available, the racecards in front of us without having to buy a paper, prices could be taken, all our favourite types of bets, it was like Christmas every day for the hardened gamblers of the world. 

Bookmakers too took up the opportunity to offer other markets from around the world. 

American Basketball Leagues, Ice Hockey, overseas minor football leagues, the list went on and on, if there were odds available online then the bookmakers would offer them.

Very soon the world of gambling became a 24-hour business, 7 days a week, 52 weeks a year. 

It was a case of if you wanted to survive in the business then you simply had to have an online branch, but it was also a case of only the strongest would survive, some smaller firms from around the world came and went in the blink of an eye.

The bookmakers, to their advantage, could keep tabs on successful punters, many of whom would pay later on by being heavily restricted or even having their accounts closed.

 

As well as online developments the 1990s saw the introduction of a UK National Lottery in 1994. 

It was seen by many as long overdue and a good thing in general as a percentage of the ticket price went to good causes. 

However, the bookmakers of the country were none too pleased as it was decided by the government that players could be as young as 16 whilst people that frequented betting shops must be ( and still is ) 18 years of age. In opposition to the lottery various numbers games were introduced and the 49's game is a regular daily feature now at lunchtimes and teatimes in every betting shop across the country. 

Over the years numbers betting has proved popular and for some reason, it seemed to bring in more female customers in to our shops, possibly it had something to do with their fondness for Bingo.

The new century was now not too far away and the '90s had seen massive growth and development across the industry but in the later parts of the decade, bookmakers had started to notice a downturn on the High Streets, partly down maybe to the increased competition but most definitely due to the fact that betting online or offshore was exempt on betting tax. It was then decided to lobby the government to address the situation.

It took a little while but on 6th October 2001 off-course betting tax was scrapped for punters, for years it had been 9% paid on either your stakes or out of any returns, this is something many of the younger generation of punters will be unaware of. 

Bookmakers too were pleased as they would now be paying tax on their profits rather than gross turnover. It seemed to make sense all round.

The start of the new century also saw a future big player come on to the market in the shape of Betfair, a betting exchange company that would allow punters to back or lay odds against each other,

We could basically become bookmakers in our own homes. It was founded by Andrew Black and Edward Wray and it soon became a big success. 

Bookmakers themselves didn't like the idea from the offset and saw them not only as the competition but hated the fact that Joe Punter could now become Joe the Bookmaker.

Punters however saw things differently and liked the idea that if they had the first three winners in a four-fold then they would be able to hedge off the last selection in order to secure a profit should the last selection lose. 

Just as the internet betting was the boom of the '90s, the betting exchanges ( Betfair in particular ) was the big boom in the early 2000s.

The bookmaking industry as a whole saw the arrival of Betfair as a negative thing and some would question the integrity of the exchanges, while most would openly say that it was taking money from their businesses that punters would normally place with them. 

As far as I see it the bookies just didn't like the competition after having things so good for all those years.

I didn't see it as the traditional bookie losing money, in fact, if you think about things it probably increased turnover for them. 

As Betfair grew in popularity, the traders and arbitrage players were also growing in numbers. 

The arbers ( punters looking for a risk-free bet ) would be placing their wagers ( quite often on Pricewise picks ) with the traditional firms of bookmakers knowing that the odds would shorten and then would Lay their bets back at a lower price on the exchanges. 

This type of punter will be around for as long as the exchanges are, for years now they have been frowned on by bookmakers and also some regular punters who believe because of them it is now more difficult to get a fairer bet with the firms on the High Street. 

I did read a piece some time back that a lot of students had taken up this style of punting to supplement their grants, it made me chuckle.

I only wish the exchanges were around in my younger days and I wouldn't have needed to sub the odd fiver or tenner from my old man to tidy me over.

 The big bookmaking firms, Ladbrokes, William Hill, Coral, Stanley Racing & Done Brothers ( later to become Betfred ) sought for ways to try and recover what they had alleged  lost in turnover and in 2001 the controversial FOBT ( Fixed Odds Betting Terminal ) was introduced on to the High Street betting shops of Great Britain.

Initially, each shop was allowed to have two machines in, with roulette and one or two video slots games the main attraction to players. 

There is a minimum stake of £1 per play up to a maximum of £100 and a maximum payout of £500 in winnings. 

These machines seemed to attract a new breed of gambler looking for a quick fix and they proved popular with the younger generation. 

Bookmakers saw the potential of the FOBT and lobbied the government to allow an increase to four machines per shop, this was granted and now the majority of bookmakers will have four machines per branch. 

These days it is thought that there are close to 35,000 machines in the betting shops of Great Britain. 

A few years ago though after a betting review it was decided not to introduce the FOBT in Irish betting shops but they were allowed to be introduced into casinos. 

Earlier in the paragraph, I called them controversial, this is due to the opposition in recent years by many people that see them as highly addictive 

It's easy to understand their concerns when a person can lose up to £300 per minute if they are playing to the maximum allowed stake on roulette. 

They are often referred to as the crack cocaine of gambling. 

As the machines grew in popularity and the technology increased more games were being introduced on to the FOBT. 

More versions of video slots, different variations of roulette style games, and even cartoon greyhound racing, betting shops were more like amusement arcades now.

The final straw for me and what probably prompted me to write this article was a recent visit to my local William Hill and I saw a gentleman in his sixties placing bets on video cockroach racing on one of these machines.

Is this what betting shops have come to after fifty-odd years? If it is then I hope I'm not around in fifty more years to see where things will have taken us. If these machines are to stay in the betting shops across the country then surely a separate room within the shop should be created with the main part of the shop to be used for racing and sports bets, it's not too much to ask.

Or if bookmakers continue to heavily restrict and shun bets on horseracing then maybe it's time to have a tote monopoly on the sport. 

At least we would know that profits would go back into horseracing, and the traditional bookmakers could continue to operate by accepting bets on other sports and their various other products.

If you wish to read more please visit the betting school article on understanding bookmakers.

2020 Evolution Update

I thought I would give my personal take on where the bookmaking industry now finds itself in 2020. 

Further to my original article of a few years ago, there have been a few changes of note.

The most significant being the vast reduction in maximum stake per spin on the Fixed Odds Betting Terminals ( FOBT’s ). 

Originally set at £100 – this was reduced to a maximum of just £2 per spin following pressure from anti-gambling groups and certain MPs. 

It was all change on 1st April 2019 which was a bitter blow to the bookmakers after it had initially been set for October 31st. 

It was never going to be an easy decision for the culture secretary to take, given the huge sums, these machines generate.

It was not just a blow for the bookmaking industry but also for the government themselves.

A widely expect maximum stake limit had been predicted at around £20, but given the apparent increase in gambling-related issues the limit was set at £2 much to the relief of opposition groups.

Shop closures were an even bigger certainty than Frankel was when he graced the turf. 

Bookmakers came up with figures and presented them to the government in the hope of a rethink, but it was all to no avail – putting many jobs at risk. 

Most firms chose to stagger branch closures over the coming months, waiting to see how much effect the stake reduction had on turnover. 

William Hill however closed with immediate effect around 700 shops, putting over 4000 jobs at risk. 

Their chief executive Philip Bowcock was also to leave the firm just a few months later. 

2020 has also been a tough year for the bookmakers, with many sporting events being cancelled for weeks on end due to the ongoing Covid-19 problems. 

In recent weeks Hill’s have streamlined their estate further by closing another 119 shops, all this will have a major effect on their yearly figures. 

Personally, I feel that bookmakers have little to no interest in the UK High Street business these days, and it is only a matter of time before the big names disappear from the streets of Britain

Just like the William Hill name disappeared from the racecourses back in 2018 when they sold all of their 82 pitches to Sid Hooper.

The bookmaking industry faces challenging times over the next couple of years,

There has been an increase in the number of sports offered, and a massive increase in the various different markets offered on these – particularly in the new markets offered on football, both pre-match and in play. 

Many matches will now have 300+ betting opportunities, giving plenty of choice to the backers.

This has surely helped the various firms and the ways they can market events, particularly since the introduction of television advertisement some years back and the ‘’ In-Play betting Boom ‘

When I started betting 40+ years ago there was only a fraction of the opportunities that there are these days, and the newer generation of punter are spoilt for choice. 

However, I do feel that Horseracing is suffering because of the huge increase in betting on other sports.

So what does the future hold for the betting industry?  

I think the future looks very uncertain for the smaller independent firms of the 50 or 60 shops size ( and there are only a few of those left as I type ) given the difficulties of 2019/20 and I can see some names disappearing for good. 

As I pointed out earlier I see an apparent lack of interest in the High Street business by William Hill and I think we may see a sell-off of more of their shops. 

Hill’s have also invested heavily in the American arm of their business, and the coming years are likely to see plenty of changes in the States with many of the deals being highly lucrative. 

Further mergers/takeovers may also take place if the monopoly & mergers commission allows them to go ahead. 

I think Boylesports & Paddy Power would like a stronger representation in the shops business in the UK, while Betfred owner Fred Done is now in his late 70’s and it begs the question if he would now prefer to put up his feet and enjoy a life of luxury in retirement.

One thing is for sure though – ONLY THE STRONGEST WILL SURVIVE.