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About Bookmaking
A brief history of betting shops
Industry facts
Reports, submissions and articles
Why people like to gamble
There is a lot of discussion in the media about the downsides of gambling. It is easy to forget that millions of us gamble every week, whether it is the Lottery, bingo, football pools, fruit machines, playing poker on the internet, or going into betting shops. So why do we do this? Because it's fun, exciting, and gives us a buzz - like going on a ride at the funfair. Gambling is part of the national character.
Studying the form of racehorses and greyhounds becomes a hobby for many people. They have their own opinion about which animal will win and are prepared to back their hunches in the hope of taking cash off the bookmaker. Many people also get more enjoyment out of watching events like a football match if they have a bet riding on the outcome. And betting shops are also a place where like minded people can socialise; a place where wins can be celebrated and near-misses commiserated.
Like so many other aspects of life, 'moderation' is key. Problems can arise for a minority of people who take their gambling too far. Bookmakers take their social responsibilities seriously and have a number of strategies to minimise this risk.
The modern bookmaker
Virtually all of the business of the early betting shops involved bets on horseraces. The early shops were also kept unattractive by strict regulations. Over the years, bookmakers have expanded into other sports and, as they have gained the trust of successive governments, have been able to develop their premises to be attractive and welcoming to punters. Some of the latest betting shops look like up-market coffee shops, a world away from the dingy betting shops of the 1960s.
The traditional area of betting on horses, whilst still the most important single betting activity, has been supplemented by betting on greyhound racing (with the provision of a bespoke service during shop opening hours). Also football and sports betting and the opportunity to bet on numbers events ranging from the Irish Lottery to specially created virtual horse and dog races. On each of these products, a price is offered about a particular outcome and the customer is paid irrespective of how many other winners there are .
There are many different bet types available including win singles, where you have to predict the winner of one event (e.g. in a horse race), accumulators where you need to forecast the winner of several events (more difficult but potentially bigger winnings) and correct scores/first goalscorer where you predict the score/first player to score in a football match.
The betting shop is nowadays a modern environment offering a variety of facilities with TV coverage of events, information screens, refreshments and comfortable seating. It also provides the opportunity to play on fruit machines and betting terminals where customers can bet on the outcome of special roulette type events.
Each day there are hundreds of opportunities to bet, not forgetting the high profile events such as the Grand National, Derby, FA Cup, and Cricket Test matches that span the calendar.
Complementary to betting in a shop, telephone betting offers a quick and convenient method of 'getting your bet on' using, for example, a debit card.
Internet betting provides the opportunity to place bets online and this channel, in particular, serves a worldwide audience and is becoming increasingly popular.
In spite of the growth of these two remote channels, the betting shop still accounts for most betting activity.
Whilst betting remains a tightly regulated business, with each betting shop needing a licence to operate and under 18's not allowed to bet, bookmaking has progressed over the years into a modern business.
The technical side of bookmaking
A bookmaker is a person who carries on the business of receiving or negotiating bets. A bookmaker offers fixed odds about the outcome of an event, such as a horserace. Should the punter win, he or she will receive their stake multiplied by the odds, plus their stake. If they lose, they forfeit their stake to the bookmaker. When constructing a 'book', a bookmaker assesses the chances of each outcome in an event e.g. in a ten horse race, the bookmaker assesses the chances of each horse winning. Odds can be expressed as percentage probabilities. For instance, 6 to 4 is effectively saying that a horse has a 40% chance of winning. From a mathematical perspective the probabilities of all outcomes on an event should sum to 100%. Bookmakers make a profit by adjusting the odds offered so that the percentage exceeds 100% (i.e. the 'perfect' 6-4 may become 5-4 or 11-8). This difference is called the 'over-round'. Bookmakers do not 'win' on every race, as this would require the weight of punters' money to be proportional to the odds on offer. Bookmakers will 'hedge' if they have excessive laibilities by backing horses with other bookmakers.
Bookmakers provide their services at racecourses ('on-course bookmakers'), off-course Licensed Betting Offices (LBOs), often referred to as 'betting shops', and via the telephone or the internet. Under the new Gambling Act, all gambling, including betting, is regulated by the newly formed Gambling Commission. All bookmakers must have a Gambling Commission Operating Licence. Some employees of larger bookmakers are also required to hold Personal Licences from the Gambling Commission. Additionally, every betting shop must have a local authority Premises Licence. Significant fees are paid for each licence type.
On-course bookmakers operate in betting rings at each of the 59 racecourses in Great Britain. On-course bookmakers are required to comply with the National Pitch Rules, administered by the National Joint Pitch Council. The choice available to racegoers in betting rings and the ease of making price comparisons ensures competitive odds which are offered, through starting prices (SPs), to punters wanting to back horses in betting shops.
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The 1960 Betting and Gaming Act legalised off-course betting. The prime interest of punters was betting on British horse races. In 1967 the off-course betting industry launched afternoon greyhound racing (the Bookmakers' Afternoon Greyhound Service (BAGS) to provide punters with betting opportunities in between horse races and as an insurance against the abandonment of horseracing due to bad weather. Today horseracing accounts for less than half of bets placed in many shops. Sports betting, particularly football, numbers products (e.g. 49s) and betting on Fixed Odds Betting Terminals have grown in significance.
Initially, betting shops could only provide spartan facilities and this largely remained the case until 1986 when live television broadcasts of sports events was allowed. Satellite Information Services was developed to provide a television service tailored to the needs of bookmakers. Shops could also begin to serve a limited range of snacks and non-alcoholic drinks. In 1993, shops were allowed to open until 10pm during the summer months, enabling them to show evening horseracing. They were later given permission to open on Sundays.
The National Lottery, introduced in 1994, reduced the take of betting shops. The industry's position was aided in 1996 when Government allowed each shop to have two amusement with prizes machines (AWPs), with a maximum payout of £10, and when betting duty was reduced by 1% to 6.75% of turnover.
In 1997 bookmakers were permitted to advertise in print, although the ban on radio and television advertising continued.
In 1998 the maximum AWP payout was increased to £15, a figure that was raised to £25 in 2002.
Also in 2002, the Government, concerned about the growth of off-shore betting, replaced betting duty that was paid through a deduction from punters' returns, with a gross profits tax on bookmakers. This means that the British punter receives the best betting value of anywhere in the world.
In 2005 the Gambling Act was passed and was implemented on 1 September 2007. The new Act formalises many of the existing good practices within the industry. Bookmakers are now regulated by the Gambling Commission. Betting shops can open between 7am and 10pm throughout the year. Bookmakers can also now advertise in broadcast media, although they must follow the BCAP guidelines and an industry code.
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Intellectual property rights and bookmakers
Peer review of FOBT research and responses of Europe Economics and MORI
Europe Economics/Mori - summary of report on FOBTs
In Great Britain there are:
- about 730 licensed off-course bookmakers
- operating about 8,700 betting shops
- employing about 40,000 people
- used by about a fifth of all adults, who at some point in the year back a horse
Generating:
- in addition to normal corporation tax, bookmakers also contribute more than £370m in gross profits tax and about £50m in machine duty
- £120m in payments to horseracing (Levy and picture rights)
- £30m in payments to greyhound racing (BAGS and voluntary fund)
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association of british bookmakers
info@abb.uk.com
tel: 020 7434 2111
