Friday 13 October 2017

Why Can't We All Get On?

Another comment from Tony Stephens, this one suggesting that regulators could take a leaf from Australia’s books:
In Australia I don't believe they just accepted a licensed bookmaker picking and choosing who they take bets from. As I understand it there is a minimum liability that must be accepted. Without researching it too much I would say someone had a look at their original model and then changed it for some reason. Why should we just accept the current model in the UK? 

I’m not Australian, but I don’t believe anything good has come out of that country since the stump-jump plough in 1876. 

Maybe Tony Popovich and Mile Jedinak are exceptions.

Taking a lead on gambling from a country where there are an estimated 400 gambling related suicides a year might not be the best idea though. 

I’m not familiar with if or how such an arrangement has been implemented there, but the idea of a private entity being told how to run their business is troubling.

Who is this ‘someone’ who had a look at the bookmaker’s original model and then changed it? The business model is proprietary – it belongs to the business. If they want to change their model, great, but businesses are in business for the benefit of their owners and shareholders, not for the customer. They are not charities, and they certainly don't exist for a customer to exploit. 

It is for management to decide who they enter into transactions with. There should be laws preventing businesses from discriminating against customers based on race, colour, gender, language, disability, religion, sexual orientation etc. but not laws or rules forcing an enterprise into entering loss-making deals.

Tony asks - why should we accept the right of a business to choose how they do business? 

Well, because it is THEIR business. We can accept it or ignore it.

This may come as a surprise, but the right to bet is NOT a fundamental human right. I checked with the UN.

In some jurisdictions, betting is illegal. Maybe we should simply be grateful we have other options?

If you don't like a company's business model, don't do business with them.

Casinos have long been able to bar players who appear to have a positive expected value and incidentally, tell other casinos about him. A positive expected value to the customer means a negative expected value to the casino. That’s not a viable business model.

Why should the approach of bookmakers / sportsbooks be any different?

Should a bookmaker be mandated to accept a bet on the next Crystal Palace manager? What if the shop is in South Norwood, and the punter is Steve Parish and he wants to bet
£5 million?

This example highlights that many markets are vulnerable to insider information. A bookmaker has to be able to deal with this risk, and part of their risk management strategy is closing or limiting accounts.

I agree that the idea of not being able to bet a small sum on a highly liquid event is ridiculous and makes a sportsbook look silly, but ultimately it is, and should be, the bookmaker’s decision how much risk they want to take on.

Other leisure businesses such as pubs and restaurants have always had the right to refuse service. I don’t see why a bookmaker should be any different.

Punters might take a different view if bookmakers had the right to knock on your door and tell you that you had to take a position on the 2:30 at Fontwell.

If your accounts are closed or restricted, deal with it. 

If an insurance company doesn’t want to insure you because you’re a terrible driver, and quotes you an exorbitant premium, you shop around. 

If the all-you-can-eat buffet denies you service because you’re Joey Chestnut or Anita, bad luck. There are other eating options, and you’re not going to starve to death.

Think of having your account closed as a compliment. It means they think you might know what you are doing. And if your accounts are not closed or restricted after a few weeks? Ask yourself what that is saying about you.

For more on this topic, and on Ben Affleck before he was caught up in the Harvey Weinstein scandal, check out my thoughts on this from three and a half years ago.  

And in 2012 I wrote:
Las Vegas casinos don't add Blackjack tables to provide more opportunities to gamblers. They are there to generate another income stream, and as with successful sports bettors, successful Blackjack players will find it hard to play. I'm not saying that short-term, the bookies can't be beaten, just that bookies are bad losers, and winning money from them long-term is not realistic.
An edge with no place to use it is pretty much worthless. The ability to ‘get on’ is an essential piece of the puzzle. You might be the world's number one expert on synchronised swimming, but try making much money from it.
And in 2013:
I don’t have a problem with this. Bookmakers have every right to do business with whoever they want, and successful punters have to accept this. They are not utility companies denying us water. They are businesses there to make money, and if they identify accounts that are likely to be (for the bookie) losing accounts, then they will.
It would be nice for bookmakers to be a little more transparent on this topic, but they won’t be for obvious business reasons. When having an unrestricted account at a bookies is seen as the mark of a loser, why would they advertise along the lines of "Losers Welcome".
Having accounts closed is why I had nothing to do with betting for many years. There was no point knowing the combination to the safe if I couldn’t get through the front door.
It was only the arrival of Betfair that let me in again to play, and while Betfair do not (at least for the time being) close accounts, I have certainly run into their equivalent of having my account limited being hit first by the 20% Premium Charge, and currently the 50% Super Premium Charge. As a result, my activities are now much reduced. It’s hard to stay under the radar when you win consistently, and it would not be a surprise to see Betfair and other exchanges close accounts or raise their charges even higher. And if the front door closes again, I’ll move on with my life.
It would seem that this topic isn't a new one.  

1 comment:

Nick said...

Dear Sir,

In Australia we have an on course bookmaker minimum bet rule that applies at all tracks. The bookmaker must bet the odds to win $1000 ( some tracks will be higher) at the price displayed on his/her board. There are no ifs, buts or maybes. At the price displayed anyone can come and have a bet to win at least the minimum amount.

A bookmaker by definition tries to make "an over round book" laying horses so as to make a profit regardless of which horse wins.

This is not always possible but taking a long term approach and making "book" as often as possible is the business principle.

The minimum bet rule has now been made a rule with the off course (internet) bookmakers as well (as it should ).

You may ask why a bookmaker should "have" to accept a bet.

A punter bets to win. a bookmaker accepts bets with an inbuilt margin so as to balance a ledger and have a profit.

The minimum bet rules allow the bookmaker plenty of scope to balance his/her book. In fact the amount of money that is eroded by long term winning punters is very small when compared to the final bottom line.

Winning punters can be equated to "loss leaders" that many other businesses have.

Pinnacle have displayed the capacity for a bookmaker to welcome winners. Given that they are very much predominately a sports (low margin) rather than race (high margin) bookmaker is a sad indictment to those bookmakers who have large racing offerings.

It can also be seen that bookmakers banning/restricting punters whilst targeting (they'll deny deny deny) problem gamblers is nothing short of predatory.

Comparisons have been made to casinos banning advantage players (predominantly blackjack). In days gone by i was an advantage (card counter) blackjack player. I was banned.

Casinos have addressed the problem of card counters by now utilising continuous shuffle machines which negate the advantage that a card counter can have.

Casinos had the problem of not being able to "balance their book" against teams of card counters which could conceivably bankrupt them if not addressed, unlike bookmakers who can change their price as money is bet on a horse.

Enough for now

Cheers Nick