How To Become A Bookmaker
If you want to become a bookmaker, what do you need to do? In the current climate, is becoming a bookmaker a career path worth pursuing? In this article we tell you how to become a bookmaker, the pros, the cons and the truth.
Our racing expert Stephen Harris, first got his license to operate as an on-course bookmaker at the age of 24, way back in the good old days of 1997, where the betting ring was still (comparatively) a vibrant place where most of the action took place. His experience was based on working as a floorman, bagman, tictac at the local dog track and getting talking to a bookmaker who was struggling to make it pay and wanted a "partner".
How to become a bookmaker? Well, as Stephen has told us, the process itself is pretty terrifying, with an appearance in front of local magistrates compulsory to assess whether he was a fit and proper person to carry out the activity. Remarkably this did not consider his financial ability to honour any bets laid (At that time in his life Stephen had about £10k in funds after being a moderately successful punter through university, where six hours of lectures a week played second fiddle to attending a wide range of racetracks and greyhound stadiums in the South), but rather to make sure he was not involved in any criminal activity i.e laundering or drug dealing, and to basically find out why he wanted to enter the become a bookmaker.
Apart from a fee of around £100 to obtain/renew a yearly permit, this was a fairly straightforward process, although these days there are far more layers of bureaucracy to cut through and endless forms to fill in. The Gambling Commission created in 2005 changed things dramatically for bookmakers, monitoring their activities far more closely and introducing a wide range of fees to fund themselves/regulate the industry.
This has made the prospect of being an independent bookmaker almost impossible, with the costs involved far outweighing the levels of turnover most can expect to achieve. Even those layers who have a headstart on a beginner, such as Geoff Banks, predict that they are a dying breed, eaten up by the larger firms who can absorb the economies of scale that effectively strangles the one man band.
So what is the truth for anyone wanting to become a bookmaker in the current climate? Here we look at 5 positives and 5 negatives, and then consider the cold reality facing anyone who takes the plunge.
Becoming A Bookmaker: 5 Pros
#1 - Professional Mindset
Doing something as a business, rather than a hobby or a leisure pursuit, totally changes the mindset when it comes to betting. Stephen always felt he was 10-11 (1.91) favourite against the public every night at the dogs, principally because he was prepared for the battle every night, turning up two hours before the first race, pricing them all up to 100% and trying not to be swayed by gossip or the views of others. Most punters are not professional, are there for a good night out and the craic, and vary their decisions and bets on what they have heard or how much they are up or down. The successful on-course bookmaker is consistent and level headed, playing the same every race and pushing harder when he feels he has an edge price-wise. Very often the obvious, front of the market, tipped up dog/horse or football team will be dramatically overbet by the public. In the old days at least, going against the obvious "crowd" bets, was a route to profit for the astute layer.
#2 - A Great Way Of Earning A Living
Certainly in more vibrant times, the life of the on-course bookie could be a fantastic one. Staying over in different hotels up and down the country, socialising and interacting with like minded players on both sides of the fence, while at the same time earning a handsome living outdoors in the fresh air.
You are also living on your wits every day at work, and there is never a dull moment, certainly when cash is flying about (and going 7-4 (2.75) first, when the rest of the ring was 6-4 (2.50), meant that twenty on-rushing punters would knock over the joint trying to "get-on"). Legends of the ring such as Dudley Roberts plied their trade in such times., but whether this style of trading works in the Betfair age is a moot point.
#3 - Road To Riches?
"You never see a poor bookmaker" is one of those sayings like "You never see a poor farmer", that is widely held by the public at large. Certainly in days gone by some bookmakers and families built up huge empires from scratch i.e Victor Chandler, Banks, and even in the internet driven age over the past decade, firms likeBetFred have come from virtually nothing to give the biggest players a lesson in how to conduct themselves. If you get it right bookmaking there is little doubt that it can be an escape from the mundane world of living as a mere member of "the staff" as Ben Keith at Star Sports describes it.
#4 - Teaches The Concept Of Value And The Importance Of Price Over Opinion
Instead of having fancies and opinions the bookmaker becomes extremely price savvy and astute. He forms his own tissue, even in the current age where Betfair drives the market and the ring resembles a herd of sheep. His positions are dictated to by finding price discrepancies in what he can lay and what the "real" chance of something happening is. This way he can exploit margins that are often very small and mythical into something more substantial over a long period of time. He knows there will be bumps in the road, losing meetings, losing weeks and periods of frustrations, but if keeps being consistent and doing things properly he will come out on top in the end.
#5 - A Chance To Tap Into New Markets, Expand And Thrive
The internet age has opened up a whole new world of opportunity for the forward thinking bookmaker, with access into vast untapped markets of eager punters (often used to high margin, state run tote style operations). Running an efficient web operation, with thousands of betting opportunities every hour, has seen some firms grow rapidly....with a plethora of "virtual" games/roulette/fruit machines changing the nature of the bookmaking game altogether (and keeping costs low and giving high margin products greater promotion/precedence.
Becoming A Bookmaker: 5 Cons
#1 - Spiralling Costs And Plummeting Turnover
As a one man band it has become virtually impossible to justify operating on-course. Turnover has simply migrated away from the track (certainly away from Saturday's and the odd Festival), and the competition from Betfair means that the betting ring effectively cuts its own throat and matches the prices at the front end of the market on fancied runners (with no commission for the punter to pay either). This has seen the ring dramatically shrink with only a few already wealthy operators remaining and the off-course firms maintaining a presence (although this is diminishing and there is very little hedging on the course at all in 2014).
The ring now resembles a car-boot sale, with an assortment of shabby looking middle aged men trying to arb themselves £200 to get the electricity reconnected, combined with some better off older men who "got it" when the game was good (or more likely their father did)
Of course big crowds at the decent meetings on Saturday's still means there are plenty of "part-time" bookmakers who go out at weekends and this is more and more what the game has become, a hobby rather than a full-time job.
#2 - Stress Of The Job
Anyone running a business is fully aware of all the grief and hassles that come "with the job", but being a bookmaker really does combine all the worst aspects of the commercial world. Not only is there the constantly increasing exes/taxes and bureaucracy, but the money management requirements are uniquely challenging. This is fundamentally a cash business in a cashless world, and keeping a float with enough funds to hedge liabilities, while at the same time paying the taxman/gambling commission/staff/winning punters can become a very difficult task. Furthermore the actions of one major bank to recently close all accounts belonging to bookmakers is a worrying development (some layers had a relationship abruptly terminated after over 30 years of banking).
The fact is plenty of bookmakers have led very turbulent lives and it is not always champagne and plenty of readies, many have fallen by the wayside with dramatic effects on their own lives as well as their colleagues in the ring.
#3 – The Travel
Up and down the country stuck in traffic is the reality for many on-course bookies. There is no time for form study and analysis when you are parked for 3 hours a day on the M25, and plenty have given up the impossible task of getting from A to B several hours before the first race (and then lumping the joint/computer/umbrella/staff half a mile to set up in a deserted betting ring, before handing over £120 quid "marketing fee" to have the tote promoted). The daily grind, combined with the cost of travelling has further eroded dwindling profit margins on the layers bottom line.
#4 - No Margin, No Hope
The ring is now mainly made up of "fiddlers" trying to lay £200 at 2.50 and have back £195 at 2.60 on the "machine" and eek themselves out a few quid on every race. The days of layers like Barry Dennis standing the favourite for a few grand (and having the second in a "taker") have largely gone. The market on-course has become a bland, rather joyless place, with the same prices offered on every board and price movements dictated by what is happening in cyberspace rather than any cash transactions on the track. Furthermore the decline in turnover on-course means that making a book has largely become very difficult on any scale. There is little use winning 5% of your turnover on the day if you have only fielded £3000 and the exes are £300.
#5 - Evolve Or Die In The Most Competitive Market In The World
Bookmakers have evolved in terms of technology in the past decade, with computerised tickets and boards making the experience of having a bet far more transparent and accessible for the public. Punters are no longer scared of having a bet and indeed, with the advent of lotteries, scratchcards, TV advertising etc, it has become a normal part of our culture at large.
However, the nature of the game itself has meant it cannot compete with the internet firms in terms of price/expense. The ring has to offer something different, whether it is atmosphere, noise, colour or the prized ability to collect your winnings in hard cash from a scowling layer. The current model of mirroring Betfair prices at the front of the market is unsustainable in the long term.
The Truth About Becoming A Bookmaker
On course bookmaking is a rapidly dying profession and anyone wishing to enter it now really needs to pick their punches and invest wisely. There is little point burdening yourself with expense and aggravation if the marketplace has moved away from where you ply your trade. The forward thinkers now need to develop websites and set themselves up online and try to find new angles to earn a living in an extremely competitive market. The bigger firms hold all the aces and have marketing/development budgets that are extremely hard to compete with.
However, there are still angles and opportunities with perhaps Star Sports and Geoff Banks two good examples of more traditional bookmakers who are fighting back hard against the combined might of the "machine" and the big, established players. Offering good customer service and having confidence in their own prices (and not being completely Betfair led) are two clear things to aim at to survive and thrive.