Free Bets – a Bookmaker’s Bone

Unquestionably horse racing is the staple-diet of British betting shops. It’s been that way since 1961, the year betting shops became legal and a familiar feature on the British High Street landscape. Just as it was way back then newspapers, listing runners and riders from the day’s horse racing meetings, wallpaper betting offices.

However, the bookmaking game has changed aplenty in recent times; the Internet proving to be a catalyst which has sped up the process of change within betting shops during the past 15+ years. Before that Victor Chandler, by installing telephone lines into tax-free Gibraltar, single-handedly caused the abolition of government betting tax.

But, fundamentally bookmakers still take bets on the outcome of races and pay out winners at a pre-arranged fixed price or an official starting price (SP) averaged-out from the prices on on-course bookmakers boards. It is unusual for something to stay so popular for so long. Other popular forms of betting, such as the football pools, have long since vanished.

Make no mistake, bookmakers may love the cash-cow which is FOBT’s, but horseracing and greyhounds are not far behind them in the popularity stakes. The quick outcomes these sports provide mean plenty of betting turnover and turnover in any business means profit.

A punter with £100 to wager will, on average, make the bookmaker around £8 per football match. That procedure will take over 90 minutes. In 90 minutes that same punter could place at least a dozen horse bets and lose, on average, a lot more than £8 a time as the bookmaker’s margins in most horse races are considerably more than they are in a football match with its three possible outcomes.

To combat this high attrition rate, bookmakers have started to throw their online customers the odd bone. Pay outs on ‘double results’ (a first past the post and promoted winner) was one of the first of many such concessions which were never considered in the first 30 years of bookmaking.

Free bets are the latest innovation. These are issued with increasing regularity by both online and land-based firms. Invariably these are a labelled as a concession, and they are a sweetener for punters whose horse is beaten into second by a favourite or was a final fence faller (for example).

Of course not all that glitters is gold and a £25 free bet does not actually have a value of £25. That’s because if it is placed on a winner the stakes are withheld, therefore with margins etc factored in, a £25 free bet is worth in the region of £12 cash.

But, as is human nature, everyone wants something for nothing and a free bet creates a ‘feel good’ factor for customers who are now obliged to stay in a betting shop (or online) a little longer than they normally would in order to use it.

In addition to these conciliatory free bets being meted out to customers, punters have also seen more and more betting opportunities on horse racing. Place only, winning distance and match-bets have all now found their way onto the traditional firms daily menu. More betting options means more bets taken and with ‘turnover’ being key, who can blame them?

But it is not a one-sided love affair. Bookmakers may be giving us more ways of betting and more reasons to bet for longer, but they have also given us fairer margins and the excellent ‘Best Odds Guaranteed’.

The definition of Best Odds Guaranteed is: Take an offered price on your selection, say 7/2, at any time prior to the race and you are guaranteed that return regardless of the fact that a flood of late money could see it return as an even-money favourite.

There is nothing new with this ‘take a price’ scenario but now, should that horse drift out in price, to a starting price of 5/1, that is the price which you will be paid out at.

This is a total win/win situation and massively advantageous to punters. ‘Best Odds Guaranteed’ was probably bookmaker’s first serious bite-back at the Betfair betting exchange where punters were starting to flock.

Just how bookmakers have sustained this ‘Best Odds Guaranteed’ business practice, which is akin to a shopkeeper calling you back into his shop to advise you he had changed his mind about the price of the purchases you had made and now wants to refund you some money, is astounding.

But bookmakers are nobody’s fool and they are aware the majority of winners are subject to market support forcing their price downwards prior to the race off. This is fact, not fiction. Most winning horses were available at a price bigger than their SP earlier in the day.

Nevertheless, when you add together ‘Best Odds Guaranteed’, free bet concessions, place only and distance betting specials, the truth is …punters have never had it so good!