Greg Wood | Opinion
There is an old gambling story about the late Australian media tycoon Kerry Packer, and an irritating Texan oil magnate who tried to goad him into a high-stakes head-to-head in a casino. “I’m worth $60m,” the oil man boasted, at which point Packer is said to have taken a coin from his pocket and snapped: “Toss you for it.”
The Texan, predictably, backed out, but there is no chance that the British public will do the same; though the oilman’s fortune pales into insignificance when set against the record £13.8bn lost by the country’s gamblers in the year up to September 2016. It was a year that seemed to play out in the Twilight Zone, a time of shocks, outsiders and expecting the unexpected. But £13,800,000,000-worth of shocks?
In fact, there are several reasons why the gambling industry did so well last year, and the results in 2016’s biggest sporting events are some way down the list. Leicester’s 5,000-1 Premier League title success, for instance, was a loser for the bookies in the “outright” market, but they got their losses back, and more, in markets on individual matches every weekend as the more obvious contenders, such as Chelsea, Manchester City, Arsenal and Manchester United, underperformed woefully from start to finish.
Gamblers like to back the big-name teams in accumulator bets, linking three, four or even five results at a time to bump up the odds. Only one needs to fail for the whole bet to go down, and the 2015-6 season had at least one “coupon-buster” almost every weekend. Chelsea won just 12 games all season – and failed to win 26. Man City failed to win half their 38 matches, while for Arsenal, it was 18. Every one of those failures was a big result for the bookies’ bottom line.
Yet profits on all sporting events account for less than £2bn of the gambling industry’s record haul last year. The serious money was made elsewhere. Online casino games and bingo generated more than twice as much as sports betting, with profits rising to nearly £4.5bn, while Fixed-odds betting terminals (FOBTs) in high-street outlets generated £1.82bn for their operators. The National Lottery – which still counts as gambling even if it also raises money for good causes – raked in £3.2bn.
Some may dismiss the exact source of the profits as a detail. When it comes down to it, isn’t it all just gambling? And everyone knows, or should do, that in the long run, the house, or the bookie, always wins. But it is “all just gambling” in the same way that animals and plants are “just stuff that’s alive”. In fact, there is a fundamental division in gambling every bit as basic as that between animals and plants, and what the latest numbers make clear is that one facet of the eternal struggle between gamblers and chance is very much on the rise.
The primary division in gambling is between betting, on sporting and other events with an uncertain outcome; and gaming, on roulette and other games of pure chance. The difference between the two is rooted in mathematics, but it comes down to the odds. In betting, the odds can fluctuate, due to weight of money for one outcome or another, or a sudden change in the apparent probabilities. If Lionel Messi gets injured in the warm-up, for instance, the odds about a Barcelona win will immediately start to drift. And because the odds fluctuate and come down to a matter of judgment, shrewd gamblers – and there are plenty – can make a longterm profit from their betting.
In gaming, the odds are fixed, because the chance of every possible outcome is known, and also fixed. The maths which governs the payouts and probabilities is as immutable and well-understood as the laws of planetary motion. For as long as we live in a universe where an apple falls down and not up, no gambler can win at gaming in the long run.
For 200 years in Britain, from the birth of both bookmaking and roulette in the last decade of the 18th century until the arrival of internet gambling, betting and gaming knew their place. Betting took place on racecourses and, since the early 1960s, in high-street betting shops. Gaming was restricted to casinos. Its availability, in other words, was more tightly regulated.
The internet has changed all that, and it is betting firms, both online and on the high street, that have been doing their utmost to blur the centuries-old dividing line. The “B” in FOBT stands for “betting”, for instance, but these are gaming machines, pure and simple. The FOBTs produce guaranteed profits – an average of more than £50,000 per machine per year – and never ask for a pay rise or phone in sick.
Increasingly, the gambling industry is moving away from betting towards the easy, guaranteed profits to be made from gaming. Customers who show a profit from betting find their accounts closed down, or their stakes restricted to derisory amounts.
When it comes to gaming, however, everyone is welcome. In all, fixed-odds products (FOBTs, the Lottery, roulette etc) account for about £12bn of the £13.8bn headline figure for British gamblers’ losses last year. And who, given a choice between easy money and hard work, would not do the same as the gambling operators? Unless or until the regulatory balance turns again – and removing FOBTs from the high street entirely would be a good start – the trend will continue, and the gambling industry’s profits will rise ever higher.
Source: The Guardian