Saturday, 9 January 2010

Memory Lane

Professor Leighton Vaughan Williams is, for me, the most interesting of bloggers on the Betfair Blog, and I only caught up with his latest post from December today. He talks about the changes that have occurred in the betting industry in the past 15 years, and they are truly quite astounding.

Read his post in full, but it's a trip down memory lane for those of us of a certain vintage who can remember the days when the bookies was by law an uncomfortable sparsely furnished den, full of smoke and people who really shouldn't be spending their money on gambling. 10% betting tax and massive over-rounds meant that all but the sharpest minds were doomed to lose. He mentions the hole-in-one team that managed a nice coup, and I well remember the story. For once, the bookies didn't know the true odds on something, and a team that did were able to make a tidy sum. Here's the post in full:

When I founded the 'Betting Research Unit' at Nottingham Trent University in 1995, the National Lottery had been going for less than a year. In a betting shop, there was a 10% charge levied on your stake, or else you could choose to pay 10% of any winnings. Betting shops had for many years been viewed as the sort of place which should have their windows blacked out just in case you might be tempted to wander in and loiter in front of the form guide.

There were no Internet price comparison sites, no such thing as a betting exchange, and very little in-running televised sports betting. But you could puff away to your heart's content at your local bookmaker's den in the almost certain knowledge that no amount of skill could beat the odds and the tax. There were exceptions, like the team that took a number of independent bookmakers to the cleaners because they knew the true odds of a hole in one in a golf tournament and the bookies did not. But this was a different world. Yes, it was all of 15 years ago.

Academic research into betting was still very much an esoteric part of mainstream economics and books that told you how to win were treated with usually justifiable suspicion. So what happened? The National Lottery, the abolition of betting tax on turnover, the growth of the Internet and cable and satellite television, that's what.

The Lottery played a major role in destigmatizing and changing attitudes to betting, not least among policy-makers. After all, what is the difference between placing a £1 bet on the outcome of the Lottery and a £1 bet on a horse? Other than that the latter is more likely to pay off.

Then bookmakers started to move offshore and I was charged in 2000 with advising the Government on the options for taxing betting in a rapidly changing world. I offered my advice, it was accepted, and in 2001 the tax on betting turnover was abolished and replaced with a much smaller incidence of tax on the gross profits of bookmakers. For the betting public, tax was effectively axed. The Internet brought more competition, and (along with the impact of the tax changes) it brought us the betting exchange boom, and all of this made the real price of a bet lower than ever. The growth of cable and satellite television expanded the range of sports on which people bet serious money, and it encouraged betting during the course of the action.

I have been privileged, throughout this time of change, to have been involved in influencing the course of policy towards gambling in the UK and elsewhere.

If this is the Golden Age of betting, 1995 was very much the Stone Age. It is quite a transformation. But it is a transformation that didn't occur just by chance. It happened because a lot of people worked hard to make it happen. I'm glad to have been part of that. The work goes on.

1 comment:

Anonymous said...

Nice to see Betfair have the right people on the payroll!