Why Do Bookmakers Limit Accounts?
Why do online bookmakers limit customer accounts? In the pursuit of beating the bookies, punters can find their accounts factored before they get too far on top. Today on the blog Stephen gives us five reasons why some bookmakers are quick to limit your action.
It is the all too common a cry amongst punters across the country, or at least any punter with a modicum of skill or discipline about their betting: "I can't get a bet on"..."I was offered £3.22 when I wanted £25 each-way"..."They offered me SP only and then didn't move the price".
So what is behind this crackdown on punters that firms view as so hot and lethal that they cannot even lay them a half decent bet at the advertised price? Here I will offer five explanations from both sides of the fence taking a look at this ever increasing problem for all punters.
1. The arrival of high margin products such as casino and games
Games and casino products online, or FOBT's (Fixed Odds Betting Terminals) in betting shops, make a very high margin and it is absolutely guaranteed every single day. These new products are the dream for all people high up in bookmaking companies, as the more ingenious and attractive they are, the more money they rake in.
Why on earth try to grow horse racing turnover when you are stepping into a hornets nest of shrewdies and arbers, when you can happily and cheaply "win" 10-20pc of your gaming turnover? No need for trading meetings, culling accounts, customer service confrontations or complex decision making, just pay the IT technicians to dream up another variation on roulette or poker to satisfy the ever-growing worldwide market in "recreational punters".
2. The internet has made us all disloyal "price tarts" in the eyes of bookmakers
With the advent of betting exchanges and the explosion in low margin bookmakers such as Pinnacle or SBO, it has become possible for price savvy punters to have bets without any margin against them. They are basically getting Evens about a coin-toss and, at times by shopping around and trading effectively, they are getting 11-10.
Running a bookmaking business is amazingly expensive. A fledgling firm that I worked for in Malta had enormous wage bills/IT bills/customer service department etc etc. In relation to its small turnover on sport, it had no chance whatsoever of coming close to breaking even. The business model was completely reliant on the games to pay the bills. Putting up prices on well known price-comparison sites, merely locks in an army of "arbers" to swarm all over the site if a price ever slips over the "exchange" price. It was a recipe for one sided books on the wrong side of the market.
In short it is virtually impossible to survive as a genuine bookmaker unless one has a huge army of loyal, inelastic punters who just want a bet on what's on TV. Playing against a move on Betfair can only end one way, with the company losing money and the "winning" punters getting their accounts chopped to pieces at a fraught Monday morning trading meeting.
Cultivating a recreational punting base has become the aim of go-ahead firms such as Bet365 and Ladbrokes. Take a look at their adverts in the middle of every televised match. They are aggressively courting the 20 year old male, beer in hand, watching the game with his mates. He might think 5-1 about Wayne Rooney scoring next is an attractive price for his £20 interest bet (it might be 8-1 on Betfair but then he hasn't heard of Betfair yet) and these are exactly the high profit, multi-sport betting punters that all companies love.
Put simply, a bookmaker would love to take a total £30,000 at 5-1 on Rooney scoring next when they know the correct price is much bigger, and furthermore, by having a bet of this nature, a punter is flagging himself up as exactly the type of player that the firms want. If this huge largely untapped market is out there and can be captured, why do firms such as Bet365 need to play the warm people at all? The truth is they don't.
3. Accountants dominate traders
When I began as a trader in horse racing in the 1990s, we had no Betfair to guide us. Every race had to be priced up everyday from a knowledge of the formbook, a feel for stables with runners and an idea of what races were ok to play strongly in and those that weren't. We had access to an industry tissue, but in all truth it had been copied out of the Sporting Life with one or two minor adjustments, and while it gave a framework it was hardly a reliable guide to the actual chances of the runners.
We put up prices and felt out the markets, got to know our punters (the hot ones were the best in fact as we tried to sculpture the books to "be with" their early bets), and moved the prices dramatically and often.
I remember well weekly "trading meetings" where traders would demand winning accounts were kept open as they were vital to guide our markets and helped shape them in the way we wanted. Occasionally we would limit the size if players began to get away too much, but it was always done after a discussion with the punter and acceptable terms were reached. Pro players such as Steve Gough regularly won over £30,000 a year from the company, but it meant our cards were marked and we would rarely lose when he found a winner.
These days, the numbers men are firmly in charge. A winning bet, beating the price, or an arb is enough to have one's account immediately closed or factored to death. Short-termism has dominated the mindset of people who's hefty salaries are dependent on margins. Betting exchanges have removed the need to formulate prices or trade markets, the skill has been removed completely and now only proven "mugs" will be allowed the rope to hang themselves with. Anyone with half a clue is going to pop up on a weekly print out at some point, provoke discussion and see his stakes reduced immediately to 25pc or less. This basically has the immediate affect of losing that punter. But in all truth that is exactly what the numbers men want.
4. The standard of traders, who are now paid peanuts, has declined rapidly
Once a skilled and highly valued profession, traders are now recruited for peanuts and in return the companies have by and large got the monkeys. "Betfair watcher" would be a better description of most young, fresh faced traders these days. Very little knowledge or skill is needed to go 6/4 when it is 2.62 on Betfair, indeed many companies now have completely automated trading platforms that mirror the exchange led prices totally. It has wiped out the arbers, but it has also completely lost an entire generation of punters directly to the exchanges themselves.
This is seen best by the demise of the on-course betting industry, who have for the past decade shot themselves completely in the foot by embracing exchanges, hedging into them and getting their entire market prices directly from them. Unsurprisingly punters have voted with their feet. Why on earth would any astute backer give himself two hours in the car, all the expense involved just to secure a price that he could beat by sitting at home on Betfair?
Basically bookmakers have been trying to sell apples at the racetrack for £1 each, when Betfair will do home delivery for 90p. No wonder the on-course game is completely on it's knees. As Barry Dennis recently admitted on twitter: "I was one of the first to embrace exchanges but I now realise it was a mistake".
Quite an admission from the man who probably did more to promote Betfair than anyone in the early years.
5. The punter has never had it so good
The flip side to all these complaints about restriction and closure is that there is now a growing and vocal army of "professional punters" who make their living from betting. The huge competition for turnover has meant that the value available is unbelievable. At the recent Cheltenham festival the prices offered were frequently over-broke, and while gimmicky offers such as Corals Even £10 or £20 about 1/4 chance Sprinter Sacre, often cause more anger than goodwill, it has to be said that overall it has to be good for the punter.
The modern punter has to adapt, accept that he will be factored and closed on a regular basis, and find other avenues to secure the price which he desires. It is pointless moaning about it (indeed some pro's almost take pleasure in telling the world about it in an ego-boosting way).
The bookmakers are not there for anyone’s benefit other than their own. Once realising that and the type of punter they are after, then the pro-backer can adjust accordingly and find ways around it.
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