The world’s first bookmaker, so the story goes, was a man called Harry Ogden. One afternoon in the early 1790s, when organised thoroughbred racing was already almost a century old, Ogden went to Newmarket races and did something no one in the business of taking bets had ever done before. He chalked up odds about every runner on the card. In doing so, he immediately became the only proper bookie on the planet.
He was not the only one for long. Until then the standard offer for punters had been a binary choice between the favourite and “the field”. The simple but effective technique that allowed Ogden to price up every runner was so wildly popular with the punters – and profitable for the layers – that before long, everyone else in the betting business was doing it the same way.
It has proved a robust approach too. Ogden had his lightbulb moment almost a century before Thomas Edison had his but the theory and practice of making a book is still essentially the same today as it was in the 1790s. If you want to bet with a modern-day bookie on the Grand National, the Premier League or the next Archbishop of Canterbury, the maths that underpins the market will follow the same rules that Ogden helped to establish on Newmarket Heath.
How many other innovations from the late 1700s have survived more than 200 years of social, technological and economic upheaval all but unchanged? Few, if any, which is a testament to the brilliance of bookmaking as a ruthlessly efficient way to separate people from their money. It is malignly brilliant, perhaps, depending on your point of view, but brilliant all the same.
Alternative ways to bet have appeared over the years. Winston Churchill, a keen racegoer, was instrumental in founding the Tote in the 1920s, while Betfair introduced punters to the idea of a betting exchange almost two decades ago. But so far bookmaking has weathered every storm. In British betting the bookie is still king, emperor and dictator.
It is a distinct aspect of the culture of these isles that often goes unnoticed, if only because it is so ubiquitous. The bookies’ odds are used to season reporters’ copy on everything from the Booker prize to Game of Thrones. Soap operas draw on bookies and betting for characters, settings and plotlines. Even Dr Who once landed the Tardis outside a Coral betting shop. Like it or not – and there will be many that don’t – the bookie is an enduring thread in the British way of life.
It is a prospering thread, too – on the face of it. Brands that were familiar to punters 50 years ago – Ladbrokes, Coral, William Hill – are still with us and they have been joined by competitors that operate largely or entirely online. Bet365 was founded at the turn of the century. Nineteen years later it employs more than 4,000 people, made an operating profit of £600m in 2018 and paid Denise Coates, its founder and chief executive, £265m.
Yet beneath the eye-watering numbers on profits and turnover it is increasingly possible to sense much more difficult times ahead for bookmaking. Several recent conversations with current or former executives in the industry suggest quite a few of them sense it themselves.
The odds-comparison website Oddschecker highlights several of the storylines in this alternative narrative. Every day of the week, and on the busiest days above all, dozens of markets are over-broke at the best prices available, which is another way of saying that a punter can back every outcome and be sure of a profit. Many more have no more than a percentage point or two of margin for the books, and even that small sliver of profit is being handed away via bonuses, offers and free “consolation” bets. And yet every week seems to bring a new name to the table, looking to attract new customers with even more giveaways than the last one.
From a punters’ point of view it looks too good to be true – and of course it is. Almost without exception, the newcomers have fixed-margin gaming operations too. Sports betting is their loss leader, to get punters through the front door. Those who are reluctant to move on to the gaming tables, or show the slightest sign of making their betting pay, are ejected without mercy.
Bookmaking is not booming. Instead, day by day and little by little, it is eating itself from inside and no one, it seems, has either the foresight or the authority to call a halt. BetBright and 188Bet have both cried enough in the last few weeks alone. Others seem certain to follow, quite possibly leaving their customers out of pocket as a result. The biggest players in the market, meanwhile, have already started to merge: Ladbrokes with Coral, Paddy Power with Betfair. It is possible to imagine a time when, but for a handful of mega-brands, the traditional British bookie is all but extinct.
Some might see this as cause for celebration rather than sorrow or even a righteous punishment for the industry’s sins. But it would not make it any easier for frustrated punters to get their bets accepted or persuade the last bookies left standing to prioritise what is supposedly their core business over the easy money to be earned from gaming.
There will always be a demand for sports betting and a legal, competitive and well-regulated betting industry is the best way to meet it. And it is the regulation that is failing here. The rules are too loose, the barriers to entry too low and the result is a race to the bottom which cannot be sustained forever.
This is another legacy of the last Labour government’s wholesale deregulation of the industry in the 2005 Gambling Act, which also legitimised high-stakes fixed-odds betting terminals on the high street. It took almost 15 years to resolve that particular issue, with the maximum stake finally cut from £100 to £2 at the start of this month. It will probably require an entirely new Gambling Act to restore the overall level of regulation the bookmaking industry needs to save it from itself.
Will Harry Ogden’s successors still be laying bets in another 200 years’ time? He might well chalk it up at 10-11 each of two.