Sunday 15 June 2014

Going Beyond the Scoop 6 – Why there should be more innovation in betting, ideally with a racing-owned betting operator

I think most of us who like a bet were delighted when the Scoop 6 was finally won, and the great eight carried off their £1.3m each – partly because it was costing a fortune every week to take part, in a vain attempt to win it, and partly because the races being selected were becoming increasingly impossible to assess. Indeed, you felt that Betfred were going out of their way to make it difficult. This was also not helped by some of the races being absent from terrestrial TV. A cynic would also argue that the cut to Betfred from organising the Scoop 6 had become a nice little earner …… or even a nice large earner?

Peter Jones, when he was boss of the Tote, invented the bet over a decade ago, and when it began it always included the best races of the day. That is definitely not the case any more, and it is debatable whether this is now a horse-racing bet or just a lottery bet. However it was designed to produce a big pool with a huge pay-out, and they certainly achieved that in May. The Scoop 6 has been a great success, and notwithstanding the reservations above, it is undoubtedly a good example of betting innovation. But do you think bookmakers generally are innovative, or that their business models and offerings are somewhat tired and old-fashioned?

Personally, I feel that the whole sector could do with a radical shake-up – both the bookmakers and the regulators in the Gambling Commission. I’ve discussed this with a number of our keen gambling owners, and one in particular has argued that their mission, “To ensure gambling is conducted fairly and openly”, is no longer being achieved. The largest gamblers now find that they can only bet if they lose; they are closed down if they win; and at best their bets are arbitrarily reduced or refused at the bookmaker’s discretion. And the sector lacks the necessary competition and creative leadership to drive positive changes.

So if you look at it from an owner perspective – as the largest stakeholder in racing, with an annual contribution between £0.5 and £0.75 billion on keep, training fees and bloodstock – would the sport gain if racing had its own betting operator? Many felt that was the case last time round, with the Tote privatisation, and an attempt was made (albeit late in the day) to try and put together a consortium of high net worth owners to take it over. When that failed, a massive opportunity was lost. In a couple of years’ time Betfred’s pool betting licence expires, and hopefully second time around the racing industry rises more forcefully to the challenge and takes on the traditional bookmakers with a completely different commercial model and purpose: “To become the most innovative betting operator in global racing: run by racing, for racing, with a highly compelling and innovative range of racing-specific bets that appeal to all gamblers both in the UK and worldwide”.

I know that Rachael Hood, the President of the ROA and wife of John Gosden, is already raising this issue and Owners for Owners are very much in support of it. Setting up a fixed-odds bookmaker that deals only with racing and which embraces the most modern technological and social media platforms could underpin the whole of racing’s finances and surely is worth examining closely from the standpoint of both the business case and the enablers to achieve it. To be successful, planning has to start soon.

In the meantime, the sport would probably gain from a forensic review of the practices surrounding how the Tote is currently being run. There is a fair bit of disquiet about manipulation of the pools and the take-out rates compared to the initial operating contract. The feeling is that it is just being run as a cash cow which, as ever, is hardly a stimulus to innovation.

This of course is not to say that there are no other major innovations possible. If the racing industry had a significant commercial profile in gambling, it could open up all sorts of collaborative ventures with both UK racecourses (such as leveraging independent racecourse betting, as at Chester) and also many different third parties in other territories around the world. Indeed, there may well be high net worth individuals, particularly in Asia, who could be very attracted by both the commercial opportunity and its centrality to great British racing – which by a considerable margin has the highest integrity in the world. Leaders, please step forward.

I am always interested to hear your views so please do leave a comment. If you can't see the comment box at the bottom of this post then navigate to the post using the right hand navigation or click here > and scroll to the bottom of the page. Look forward to hearing your views. Thanks very much for sharing them.


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