What keeps the High Street betting shops ticking?
Have you ever seen a high street without a betting shop? Depending on where you are, there is usually one; in some places there are a lot more; in some ways they are a bit like charity shops. On the face of it, I struggle to understand why they are so popular these days.
I've had an interest in horse racing all my life, as well as mainstream sports like football, rugby, golf, tennis and cricket. I'm competitive and like to win, but I rarely put my money on anything other than a horse, and that varies from maybe as little as one or two bets a month, to many more than that in a few days at events like the Cheltenham Festival. So I hardly run down to the bookies every day! In fact I hardly ever go in the places if I can possibly help it, which is why I ask the question.
Surely it is odd for someone who loves 'the game' not to frequent the most common outlet to the customer? Try to put aside the image these shops once had; the image has been drastically improved in the last decade or so, with glass frontage enabling some light inside, the smoking ban preventing 'Andy Capp' from smoking his 40 woodbines, and generally some other improvements to health & hygiene for staff and punters alike. Even so, I choose not to enter, given alternatives that suit me better.
How I reconcile the general usage of high street bookies
Most bookmaker shops are taking bets for horse and greyhound racing, where you can see what happens to your bet and enjoy the thrill of the race (chase) there and then.
Other sports like football, golf, rugby, tennis and cricket have become increasingly popular; people pop in to place a bet and then leave; these events are generally not available to watch at the bookmakers; the punter will be back to collect if they win; they'll probably be back for another go if they lose!
Some people go there for the afternoon as there is some sort of community spirit, but it would be nice to think that most people have a job and don't see the bookies as their road to riches! This very much depends on the social-demographics of the area.
That's them, but what about me?
I prefer to phone the bookmaker and place a bet, whether on-account or via a debit card
Or I can place a bet on-line whilst sat at my desk (or on any mobile device)
Both the above enable me to save time, and are both possible 'on the run' (in the mobile sense!). Neither requires me to exchange 'hard cash' in person either. I also get to take the best price in the market rather than rely on the bookmaker on the High Street.
These days everyone looks at Return on Investment, so how does a bookmaker justify his investment in a shop? Also, it seems in the less 'poorer' areas, there are more bookmakers, thereby increasing competition for those punters that are less wealthy, so by definition those punters have less to lose. How do these shops survive, even if every bet placed is a losing bet?!
Enter the Fixed Odds Betting Terminals (FOBT). An astonishing £25 billion is expected to be wagered in 2012 with William Hill & Ladbrokes alone. That is 5 times more gambled on these machines than all other mainstream sports put together; it is a multi-billion pound phenomenon.
Betting shops are legally limited to 4 FOBT's per shop, but there is no limit on how many shops a chain can have. The key to the increase in amounts wagered is that you can now put notes into the machines, but way more concerning, your debit or credit card. We all know how much easier it is to spend on-screen than to use notes and coins. A number pops up and we merrily put in our PIN or password and off to the races we go!
Some may argue it's what got us where we are today (i.e. credit crunch etc), but generally, in these times of austerity it's easy to see why some people are desperate to find a way out of the financial turmoil they find themselves in, and quickly arrive in the promised-land by having that one big win that changes their lives forever. It's like playing the lottery but you get a spin for your money far more often!
The TV has many shows that take people from obscurity and into the limelight, showing the extremes of success and failure where the phrase 'It'd mean the world to me" or "It's all I've ever wanted" is repeated time and time again. The media is all over it. It's compulsive viewing and as humans there is huge interest in seeing people go through extremes, whether that be success or failure at the highest level.
Some win, some lose; it's a hard game is this life, and I'm afraid there are many more losers than winners, but that doesn't mean it can't happen - there's always a chance, and the bookmakers know that all too well. However, you probably don't see Messrs Paddy Power or Victor Chandler hanging around the council estate looking for their latest fix.
Going back to my initial question - so what does keep the high street better shops ticking?
Take William Hill & Ladbrokes on their own (who have 17,000 machines out of 32,000 - i.e. > 50% of all FOBTs); the wagers placed is expected to exceed £25 billion in 2012, with an estimated net profit of £700 million. With 4,508 betting shops between them, that works out to be an average of £155,279 net profit per betting shop. Of course, they are still there to take bets from the old-fashioned punter who likes his nags and greyhound accumulators, and anything else between that and flies crawling up walls. That's all extra gravy on top!
I am now getting a far better understanding of why bookmakers exist on the High Street! One day I might own a betting shop with as many of these machines inside as law allows, as it sounds like a nice little earner; what you won't find is me putting my hard earned into a FOBT. It is a machine with one sole purpose; to earn money, and not give it away! It needs capital to put it there, and electricity to run it; after those outgoings, it is pretty unscrupulous with anyone who wants to take their chance. I feel for those that are lulled into thinking they can make it pay against a machine. It looks like a solid banker for those on the other side, and far better than 'investing' cash in the bank, earning next to nothing! I think the bookmaker on the High Street would struggle to exist if it wasn't for the FOBTs, and I was not aware of this before writing this blog. You learn something new every day!
Not everyone shares my opinion; it would be a dull world if they did! Where do you sit on this one?