Right now, being a Bookmaker isn’t quite as good as it used to be!
“The bookie always wins” is a well-worn phrase and for over 40 years as a punter I have agreed with it. In recent times though things have not been going well for bookmakers.
People who have stocks and shares in UK bookmaking firms are one of the longest bookies losing streaks in history.
They have had several big body-blows one after the other in recent times. First out of the traps and one of the worst things ever to hit the operators was the government passing legislation drastically reducing the maximum stakes on the “one arm bandits” inside betting shops.
FOBT’s Max Stake Reduction
The “Fixed Odds Betting Terminals” or FOBT’s for short, were for many years a licence to print money for bookmaker shops up and down the country. Each FOBT would collect revenue for them like nothing else inside a betting shop. They were so successful that they’d have had as many as they could cram in each shop had they been allowed to.
However, they were restricted to four per shop. So, what did they do? They opened as many new shops as they could, which is why so many towns have seven or eight bookmaker shops within a 10-minute walk of each other. Often the same operator would have three shops within a three-minute walk. These “clusters” of betting shops were just a way of getting around the regulations limiting how many they could have in a shop.
The first big body blow to bookies was when the Government slashed the maximum stake from £100 to £2 per spin of the wheel.
Credit Card Betting Ban
Problem gamblers are notorious for betting with money they can’t afford and when new legislation came in to stop people from funding gambling accounts from credit cards then operators would certainly have another revenue stream taken away from them.
Know your Customers
Then next it was much stronger affordability checks that stopped a lot of BIG money punters from losing chunks. I’ve spent a lot of time over the last 40 odd years in casinos and you wouldn’t believe the number of dodgy characters I’ve met over that time.
The thing is though big gamblers or high rollers as they prefer to call them are worth so much to the casinos and bookmakers.
I’ve seen drug dealers walk into a casino and spread £20,000 in cash over three or four tables (£20k per table), and when I say spread I mean backing every number. When the balls drop, they take chips from the tables and walk to the cash desk and ask for a cheque.
I know a guy who has been banned from every casino he used to visit over the last 3 or 4 years due to the fact that he was punting about £250,000 per year through each one and he was on the sick living off about £100 a week in provable income.
I was sad when he got banned from the Grosvenor casino that I play poker in as he and I were friends. As a “Black Card” holder (Grosvenor’s VIP level) he got free drinks and meals. When we were playing in the same poker tournament, he and I would have the most expensive steaks off the menu during the break and a couple of drinks. All on his privilege card of course.
From the casino/bookmaker viewpoint the average punter might lose £30 – £40 on a casino visit (in the Midlands). A high roller can drop £5 – £10k a night.
I used to play poker in the Broadway casino with a guy who was losing about £35,000 a month playing blackjack. I remember once me, him and one other guy chopped the Friday night re-buy comp for £2,000 each. We did the deal and got the cash from the desk to split. In those days the casino didn’t get involved in deals.
Anyway, we split the money and I stayed at the table to finish the cup of tea the valet had just brought me. I was sat there for no more than 5 minutes.
After I finished my tea, I walked to the Blackjack table he was playing on to say goodbye as I was on my way out of the casino. As I arrived on his shoulder the dealer was taking his cards and the last of his two grand. He’d literally played poker for 9 hours to win £2k and lost it in five mins.
That night I took my winnings and left the casino without putting so much as 10p on a table game or in a slot machine. I make almost zero difference to a casinos bottom line (Something I’m proud of) but losing high rollers many of whom are problem gamblers has a big effect on operator profits.
The recent triple whammy of the FOBT stake reduction, no credit cards, and the source of funds regulations have decimated share prices in the UK’s biggest gambling companies listed on the Footsie.