Latest Cases - March 2012

1st March 2012

Good afternoon, friends,

In this issue of Punters’ Verdict….

  • Where the bookmaker shows his loyalty….
  • The ‘crack cocaine’ of gambling….
  • Daylight fobbery…. 

Where the bookmaker shows his loyalty….

A couple of weeks back I touched on the subject of loyalty and how it doesn’t pay to favour just one or two bookmakers with your custom – because you’ll inevitably find that the bookmaker will not show you the same loyalty in return.

If you’re a sports-betting punter the bookmaker will only show his ‘loyalty’ to you – and allow you to keep betting with him – if your betting record indicates that you lose more than you win and suggests that over time the losing trend is likely to continue.

If at any point you show any signs of going into profit with your bets or knowing something that gives you an edge over the trading book then you will find the bookmaker drops you like a bad habit – perhaps just limiting your bets so that it’s almost pointless continuing the relationship or, more likely these days, closing your account forthwith and deeming you someone he doesn’t want to do business with full stop.

That’s the way of it these days. In a competitive market where margins are tight it’s all about the bottom line. In today’s climate bookmakers are not far short of mere accountants and punters are encouraged or discarded solely on the basis of how they affect profits. ‘Loyalty’ doesn’t even come into it. It’s an irrelevance.

But the ‘loyalty’ issue is not completely black and white. Whilst the sports-betting punter can’t rely on the bookmaker’s indulgence beyond the outcome of his next bet there is one group of punters who can depend on the bookmaker ALWAYS taking any bet they want to place. In fact, the bookmakers are desperate to do so. Almost obscenely so.

I am, of course, talking about the punters who play the Fixed Odds Betting Terminals in the shops.

What is a Fixed Odds Betting Terminal?

Commonly known as FOBTs the Fixed Odds Betting Terminals were introduced into betting shops in 2001. They are touch-screen machines that offer the punter the opportunity to bet on the outcome of games and events with fixed odds – like roulette, bingo or slot-machine and arcade type games. Of course, the ‘house’ has an advantage built into the odds and if you play the FOBTs over a long enough period of time then sure as eggs are eggs you will do your money.

 

The ‘crack cocaine’ of gambling….

That’s how James North, a policy advisor for the Methodist Church, recently described Fixed Odds Betting Terminals – and I’ve got to admit that I can’t disagree with him.

I frequent betting shops – as I’m sure you do yourself. And, like me, you’ll know that if there are ‘problem’ gamblers in your local shop the odds are they spend an awful lot of time playing the FOBTs – and losing.

It’s actually something I’ve become deeply uncomfortable with. I bob into shops in my area to check out what’s going on and to catch up with punters of my acquaintance. Betting shops used to be pretty lively establishments – plenty of banter, no shortage of opinions and one or two laughs. These days walking into a betting shop is like walking into a funeral parlour.

It isn’t that there’s nobody there. There is. But there is little social element to what’s going on. The character of the places has changed. These days betting shops tend to be not so much populated by punters but rather haunted by the FOBT players.

They stand at the machines for hours on end pressing on-screen buttons and gazing at the lights and spinning wheels with a glassy-eyed intensity only the desperate and the demented can muster – literally feeding the damn thing every 30 seconds with £10 and £20 notes. In the time it takes to watch the 2.47 dog race from Hall Green you can watch a guy blow £200 on a FOBT. 

Sure, you still get sports punters in the betting shops. But the clientele has changed. So too the atmosphere. And the introduction of FOBTs is responsible. You can still place your racing bets and fill in your football coupon – but these days it’s against the backdrop of some grey, lank-haired guy in scuffed shoes and an anorak he should have ditched in 1977 spanking money he clearly can’t afford to lose on a FOBT.

These days the betting shop experience is a bit like having a beer in a bar where something disturbing is happening in the corner – and you wonder whether you should really be standing there observing it.

Daylight fobbery….

Of course the bookmakers love FOBTs – of which there are now 32,000 situated throughout the country. And why wouldn’t they?

Take Ladbrokes for instance. Britain’s second-biggest bookmaker recently announced that its FOBTs attracted £10.5 billion worth of bets last year and produced a gross win amounting to £360.9 millon.

That kind of money buys a lot of cigars at the office party. And all the High Street bookmakers want to maximize their share of the pie – which is growing. In January William Hill reported it had seen an upturn in bets placed through its gambling machines over the last year – despite, or maybe because of, the economic climate.

FOBTs represent easy money for the bookmaker who can expect to rake in between 2.5% and 5% of all money bet through a machine over the long term – and depending on which specific games get played most.

And if punters can be encouraged to bet more through the machines – whether or not they have a gambling ‘problem’ or might be suspecptible to one – then so much the better for the bookie and his bottom line.

And this will explain why Ladbrokes and William Hill are hijacking the good, old-fashioned concept of ‘loyalty’and using it to encourage their punters to play FOBTs more often.

Ladbrokes is planning to expand its ‘Odds On’ over-the-counter loyalty card to include FOBT players. Card-holding FOBT players will earn a point every time they bet £2. When they’ve gambled £1000, and earned 500 points as a result, Ladbrokes will reward them for their ‘loyalty’ with a £5 betting voucher. Whoopie-Do! Participating punters will need to provide Ladbrokes with a name and address – so that individual betting patterns can be studied and exploited at a later date.

No such bureaucratic red-tape where the William Hill ‘loyalty’ card is concerned. Launched later this year the Hills card will be totally anonymous. The Willim Hill organization are adopting a different tack to Ladbrokes. They take the view that punters don’t want to be written to at home and reminded of how much they gamble! Public spiritied William Hill are only too happy to keep such punters in the dark.  

The Judge sums up….

Whatever your feelings about FOBTs, whatever your feelings about ‘problem’ gambling and how much FOBTs do or do not contribute to it, the moral of this story is very simple and very clear:

When a bookmaker is prepared to trade on and subvert concepts like ‘loyalty’ in order to forge a deeper, longer-lasting relationship with punters – as Ladbrokes and William Hill are doing with their FOBT players – then you can be sure of one thing: there is only ever going to be one winner.

Not the punter. Not society. Just the bookmaker.

The bookmaker only starts talking about the importance of ‘loyalty’ when he feels a sense of certainty –

  • the certainty that he is always going to be on the right side of the deal and the punter on the the wrong side;
  • the certainty that the dice are loaded in his favour;
  • the certainty that he will win and that you will lose;
  • the certainty that he will get richer and that you will grow poorer.

Where FOBTs are concerned the bookmaker isn’t gambling. He knows for sure what the outcome will be before the game even starts.

Committed FOBT players at Ladbrokes, William Hill and elsewhere should take note and find something more rewarding to do with their hard-earned cash before it ends up being reported as part of the bookmaker’s profits in the next quarterly report to shareholders.

I’ll be back with the Verdict next week.

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The Judge

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