Ready Set Bet – A Year as an On-Course Bookmaker by Harry Speller

I mentioned to Andy the idea of contributing a guest publication for his most excellent blog. Speller Racing started on-course in April 2022 and so an anniversary article about surviving a year felt like something that could be interesting to readers.

The bad news is that music references and puns will be limited as they are patent pending by Cairn Bet. And, given my guilty pleasure is 70s Funk, Disco and Austrian Apres-Ski Schlager most music references would probably have involved the hustle and need to staying alive in the betting ring. Potentially with some accordion derived club music in the background about getting a Traktorführerschein.

So instead, you’ll get serious geekery in the form of board games references, which will probably only appeal to one individual reading this. Although said board game references do make great sounding racehorse names. So here goes with a seven-card race on being a bookmaker...

1. Twilight Imperium

In 2021 I decided to jump into bookmaking with both feet first, without checking where the bottom might be.

Why?

After-all the common refrain is “the game is gone”. The golden years replaced by twilight days. Perhaps it is optimism that on-course bookmaking can create a relevant niche for itself. Or maybe I wasn’t around to experience the good years. The time before digitisation and the exchanges. My childhood recollections of racing were on TV during the late 80s and early 90s, in between playing computer games on my ZX Spectrum and BMX biking in the local park.

So how did it happen? Well rather simply I love horses. Five years ago, I started riding and progressed from there. Along the way I ended up owning a somewhat grumpy ex-Stallion, probably due to him losing his tackle rather late in life. We have a pretty good relationship – I feed him carrots and if he’s in a good mood I get to ride him in the arena for ten minutes once a week in circles. He then spends most of his days in the field eating grass and generally doing bugger all.

It was through horses and a work outing to Kempton Races which served as my introduction to horseracing. It was a quiet mid-week evening meeting that gave me my first taste to the races. It was also the first time interacting with bookmakers. I enjoyed the experience so much that I joined a racing syndicate the next day and too my first steps into the racing world.

The interest in bookmaking happened in 2021 as we exited the lockdowns. I became intrigued by what went on behind the joint. At the same time I was interested in developed a “side project” related to racing. Since I wasn’t going to turn into a star trainer like Sir Henry Cecil overnight with a stable of Frankel’s, bookmaking felt like a great way to be involved in the sport. What started off as curiosity, turned into an itch, which finally turned into an idea of “why not, what’s the worst that could happen” …

2. Arcane Academy

Like seeking the Philosopher’s Stone at Gringotts Bank, knowledge about bookmaking is hard to find. All I had was some basic bookmaking maths from my time at school many moons ago. Even trusty Google struggled to find information. Knowledge eventually came from blog posts from Simon Nott, Cairn Bet and Paul & Lynn Garrity. The Star Sports Interviews also helped fill in some of the knowledge gaps. The team at Elite Software also helped to fill in the gaps.

Just trying to work out how it all operated on-course was a dark art in itself. After reading the back of a betting slip, I found the AGT and through that contacted my local betting ring manager. On a summer day at Bath, Andy the BRM explained how it all work from the positions and introduced me to a few books to chat about the business.

With the practical knowledge of how to get going on-course I was ready to go. All I needed was the licence.

Simples…or so I thought…

3. Adeptus Administratum

Apparently in the grim darkness of the far future there is only war. In the bookmaker’s world that grim darkness comes in the form of paperwork. Lots of it. Lots and lots of it. And the Gambling Commission makes the Imperial Bureaucracy of the 41st Millennium look like amateurs.

Policy documentation, business plans, proof of funds, DBS checks and multiple forms to fill in. There was also the to and fro as they queried the documents, mainly focusing on how it referenced the conditions of the licence. From start to finish it probably took about five to six months to organise and to get the licence.

It took me a few more months to order the joint, computer kit and display board. As well as those important sundries like mush, signage, sack trucks (always get two is my advice, at least until someone invents a portable motorised trolley to carry all your equipment) and suitable storage boxes.

4. Fishbowl Fiasco

Everything was set and on the 2nd April 2022, Speller Racing launched on-course at Chepstow. Which was a fiasco from the start, the comedy of errors began with:

· Turning up when the gates were opened to the public and so was dragging the joint and other equipment as people started to flow in. Queue much swearing…

· Realising that most bookmakers had been there an hour earlier, and you could actually drive your kit onto the course, which would have saved all the sweating and swearing…

· Ten minutes before the first race still attempting to assemble your joint, in the process discovering all the sharp bits which resulted in blood being split and more swearing...

· Forgetting to put races up on the board and wondering why I wasn’t getting any bets. As well as putting the wrong race up on the board during the day. Again, yet more swearing…

I don’t remember much of the whole day apart from stemming bleeding and swearing. It was a blur from the moment I switched on the light board five minutes before the first race. Within moments I received my first bet and the day turned into a whirlwind of taking bets, entering results, paying out, putting the next races up. By the end of the day, it looked like I had a small profit after expenses probably more by luck than design.

Learning from failures are just as important as successes and I learnt several hard lessons about bookmaking. Everything from over-hedging, which resulted in what should have been a profitable day becoming a loss. To psychology and how it impacts your decisions – for example these days I don’t really look at my running totals for the day as I know if I see a loss, I start to become more risk averse which can reduce potential returns for the day.

5. Stratego

It would be remiss for me to not talk about our strategy to bookmaking. Out of the three general strategies that have been talked about on this blog, I generally follow the “betting shop” book approach where we stand as much as we can take. Sometimes called the bingo book or the let it spin book, I find it fits naturally with my perspective on bookmaking.

The other two common approaches are the green-up approach or the traditional approach of laying favourites. I’ve tried all three (yes even I’ve had a go at pushing the green-up button) but I was never mentally comfortable with the alternatives. Nothing wrong with the alternatives, everyone has to find a strategy that works for them. At the end of the day a strategy must feel comfortable to make work. Otherwise, you spend all your time fighting the strategy and this leads to erratic results or worse.

We also consider the following:

· I tend to like a “balanced book” which probably comes from the purist view of the mathematics. It results in an active approach to managing my book as the bets start to come in. I shorten or lengthen prices to adjust betting flows.

· The green-up Figure is there to be beaten – I use that to benchmark my results. Beating the green-up figure means we have an edge.

· Avoid hedging where possible – Hedging is insurance, so it shouldn’t be used unless necessary, given you are going to be paying a 2% premium for it. It is there as a last resort. These days if I can I’m also hedging more into the ring as well. I do think if hedging is insurance, then really it doesn’t really matter where you have it on especially at the top of market with the favourites. Philosophically, I also think putting money back into the ring is important.

· Don’t have opinions on a given race but DO have an opinion on what the customers opinion might be on the race. In Stock Market trading this is sometimes called second level thinking, the idea that your own opinion about a business doesn’t matter, but it is better to trade based on what everyone else’s opinions might be. It’s sometimes called the “Keynsian Beauty Contest” if you fancy a delve into Wikipedia.

· Hedging early destroys value. Nothing worse than panicking and hedging a big liability early on, only to discover that enough bets have come in that you didn’t need to hedge in the first place.

· Slips and turnover – There was a lively debate about the important of turnover on Twitter. They’re all benchmarks to work out how well you are doing. I tend to find if slips and turnover are below certain thresholds then the day is just a grind.

6. Gloom

It would be fair to say that we’re a grumpy lot sometimes. Both on and off course, changes has wrought its fair share of challenges. There was a recent interview that suggested there are about 400 active bookmakers now versus 1100 when the NJPC was originally created. The arrival of the betting exchanges and computerisation also changed the dynamics overnight.

Expenses are another challenge. Many customers are surprised that we have to pay the racecourses to trade. And that’s always follow by a second surprised look when they find out how much we must pay for the privilege. It also helps with the other argument about why generally we can’t offer Betfair prices and/or special offers. Online bookmakers and exchanges have access to large pools of liquidity and customers that gives them significant economies of scale.

Having said that, I tend to be optimistic about the future. Although I think it will need changes. What happened to on-course bookmaking has similar parallels to the computerisation of the stock exchanges. Overnight, the old trading floors with their trading pits were consigned to the history books. Computers replaced the traders shouting at each other and waving hand signals in the air. It changed the game overnight.

On-course may need to reinvent itself. Beneath all the uncertainties is the simple reality that society and culture has changed. Which means we have to adapt to the new normal. Some initial thoughts over the last year seem to revolve around what it can bring to a day at the races:

· We provide a valuable experience to people enjoying their day out at the races. Give everyone a top-class personal service and bring a bit of colour to their race day. One of my favourite days last year was Ladies Day at Bath, where there was a lovely American couple on vacation, who came and bet with me at each race. It was fun translating wagering types that Americans use (Win, Place, Show and Across the Board) to our Win and Each-Way options. They were also really surprised and loved the fact that most bookmaker are an independent business. It is a unique aspect of a raceday in the UK that should be promoted more.

· Technology – The reality is we have to accept that computerisation is here to stay and to use it. The online exchanges are a useful tool for risk management. It should be used appropriately in line with the given strategy. The same goes with the software we use. I solo a lot of days simply to keep expenses down, only using help on busy days like the Festival. Going solo means using all the potential shortcuts in the software so I can operate both sides of the joint efficiently. My advice with going solo, is invest in the kit too, a barcode scanner saves time checking tickets, whilst a mini-keyboard is useful to take bets and still be on the front of the joint. Having an IT background and being a computer gamer probably helps!

· Students – I’m very much in the camp where I have no problem with them. I tend to find them a pleasure to deal with and interested in how it all works. I think it’s a good way to bring new interest into the sport. Whilst we can’t expect every single one of them to get passionate about racing, some will and that will hopefully expand the audience for the future. Related are Family Days which also broadens appeal. For example, my whole family now comes once a year, with my siblings bringing their children and also their friends to enjoy a day at the races.

· Diplomacy – My day job is in the tech industry. One of our biggest competitors is Microsoft and yet we still have a strategic partnership with them, so they sell some of our products and vice versa. We compete but we are also allies to help grow the overall market. The same could be said with the on-course fraternity, to survive we need to work together to grow the overall market.

7. Tokaido

As Speller Racing enters its second year the adventure is only just the beginning. We have some ideas of next steps, namely expanding our festival portfolio. We have learnt a lot in the first year, working out which days are workable and how to operate the business.

Each day we tweak and optimise our approach. From the practical aspects like finding what parts of the joint you don’t need to take to operating the book. The other important element has been to collect lots of data, which helps to tweak our bookmaking strategy moving forwards.

We also survived our first Cheltenham Festival, which was a great learning experience. Having four days in a row really makes you more aware of how to operate better.

I’ve also been lucky that there have been many people who have supported this journey, family, friends and particularly fellow books. I think this journey has been made more manageable and fun by the books who have either given advice, helped on the joint on the busy days or showed me their approach to bookmaking. Plus given me a good old fashion ribbing and a few laughs in the process.

Onwards to Year Two!