Many people say that you won't beat the bookies. Ever seen a poor one? they ask. Those folks don't have a clue! There has never been a more opportune time for gamblers to visit the racecourse to battle with the on-course layers.
The prime money-winning time is midweek. Weekends are when the public go racing - that doesn't make beating them impossible, but the weight of money is there for the on-course layer to book make. Monday through to Friday is a different story. There are too many bookmakers chasing too little money, there are too few punters and the racing is often less than competitive.
Take a look at who goes to a rainy, midweek meeting. The vast majority are all the people the bookies find it hard to beat: trainers, owners, owners' mates, off-course reps, professional punters and general shrewdies. These days, your corporate hospitality guy will rarely get out of his warm box to have his score each-way on the favourite anywhere but the Tote. The bookies are left with the clever people to try and win off.
Generally bookies do have the edge, but now that more and more are hedging on the betting exchanges, margins are getting vulnerably close to nothing. All a bookmaker has to do is make one rick and he's looking at a book of less than 100%. He doesn't like that much, as it means he has to be right, go for a winner or in many ways start to behave like a punter. That, any disillusioned bookie will tell you, is not why they shell out daily expenses of upward of €300 to stand in the pouring rain at places like Plumpton to bet.
Nevertheles, even though it is harder to extract a profit from the punters at these times, the majority still succeed, although gains are a lot more modest for most than you are led to believe by certain TV celebrity bookmakers. There are plenty of people getting plenty from gambling, but until recently, in order to pro-punt, you needed to have privileged information and to be incredibly disciplined in your approach, as well as having the requisite time, money and personality type.
Now, though, a new breed of punter has entered the jungle. He doesn't have to know anything about form, he often doesn't care if the horse he backs wins or loses. All he needs is the right gear, a mate on the end of the phone, a few readies and to be quicker than the next bloke. Greetings you're at the no-lose world of the betting exchange arbster.
The first, pioneering arbitrage firms appeared on course a couple of years ago, when on-course bookies almost never used the exchanges and the two markets were virtually unlinked. The first teams earned thousands of pounds a day with little risk. How? Put simply, an exchange arbster will back a horse at a certain price on course and lay it at a shorter price on the betting exchanges.
A simplified scenario would involve the man on the course watching the market and reporting back via telephone to someone on the exchanges elsewhere. The man at home spots a move on the exchanges, for example 4.3 into 3.5, which in the digital odds used by the exchanges is 5/2. On course, 3/1 is still available, so while he lays at 3.5 online, the man at the racetrack gets the message and starts to lump on at 3/1. Depending on how the team operate, he may have backed the horse to the tune of €1,000 at threes and laid it off to lose €2,500, thereby providing a €500 bet to nothing, or maybe a €2,875-€1,150 to win either way.
That example would be the sort of trading an arbster would dream of; more often than not the margin of profit would be very much smaller. Some firms have thousands on short-priced favourites to cop just €30 or €40 - the bigger the play, the smaller the margin of profit has to be to make it worthwhile. The commission rate also has to be taken into account, but if you are quick and know your job, there is money for the taking.
Nowadays, bookmakers know that if a price shortens on what they quaintly refer to as the machine (the exchanges) and they don't react accordingly, they will soon be confronted by a bloke in a waterproof jacket with a phone earpiece shoved in his lughole, asking for a ridiculously large bet.
However, arbing is not necessarily a bad thing for bookies, and more and more of them now have an extra computer on course for hedging. As they're watching the same market moves as the arbsters, so the switched-on, on-course bookie has, in effect, got himself an electronic floor man.
A floor man is employed by the bookmaker to be his eyes and ears on course. He is required to know faces and look out for lumpy bets going in and prices tumbling, to pre-warn the man on the stool. He often ends up as a general whipping boy to be blamed when things go wrong - despite whether he could help the result falling at the last, allowing the favourite to win. Nonetheless, the bookmaker relies on his floor man. A good or bad one can make the difference between a winning and losing day.
The floor man has always traditionally been sent off to hedge bets and take the flak if he misses a price, but now some bookmakers are prepared to accept the commission to hedge on the exchanges rather than place money with their fellow bookies. The exchanges sometimes offer much larger prices available to small amounts, although operating in this way does mean that more ready cash is needed, in order to pay winning bets that have been hedged online.
The main arbing operations are very professional. The guys on the course are lightning quick and eagle eyed and known by most of the regular on-course bookies. They are trusted, and can call lumpy bets over the heads of the waiting cash punters, then settle up - win or lose - after the race, or even at the end of the meeting. This is a great advantage as the arbster can cover several bookmakers, asking for bets from each, in a short period of time. If he had to pull out the readies each time, he'd probably only get on with one book. Needless to say, the floor men are watching these guys as sharply as they would a Ladbrokes rep.
The business deals off-course are just as professional. The two arbing companies InsideEdge both had two computer operators, two computers and eight screens back at base. The multiple screens are essential to have the edge when betting in running. Having the edge is the key to beating the other punters on the exchanges and is where many of the arbsters reap most of their profits.
Ever wondered why you get beaten to prices? There is generally a three second delay to TV screens, so the on-course man will give a running commentary on the race and prompt the man at base to back or lay any particular horse. Each of the fancied runners will be up on the in-running bet section on each screen, enabling a back or lay of a horse to be done in the blink of an eye. Then, once the man on course thinks the winner has flown, he gives the go ahead to the man at HQ to back at 1/100, in the process scooping all the bigger odds bets in waiting before they can be cancelled. Of course, this can lead to disaster, but some firms insist that they show a handsome profit from backing horse prices down to 1/100, when only an act of God can stop them.
Although the larger arbing teams rule, there are also individuals on course doing the same thing as them in a much smaller, but still profitable, way.
Some racecourse 'faces' can be seen in the summer, sat at the back of the stands with a laptop, watching the market moves on the exchanges and on course, backing and laying accordingly. Others watch the moves and get in front of them, backing to smaller amounts before the arbsters get in, then telephoning the exchanges to lay the horse they backed shorter for a no-risk situation.
This is a realistic way for those of more modest means to play the exchange game. The gamble is minimal, because even if the price lengthens again, the arbster can always bail out before the race, taking a small loss.
Though neither wanted to be named, a couple of the livelier on-course men gave me a few details of their game.
The first explained that he was on wages for a boss. The cost to this boss, excluding his pay for the day, would be around €65, which would include the open-line phone, entrance and petrol. His team betted in such a way that they made money regardless of whether the horse being backed won or lost.
On an average day, though he stressed there isn't really such a thing, he would have around €5,000 worth of bets and his boss would be happy to keep €500 (a 'monkey') of that as gross profit.
The second firm is a co-operative, and they need the horses they back to win. For example, they might back a horse at €2,250-€1,000 on course and lay it at €2,000-€1,000 on the exchanges, guaranteeing a profit of €250 if the horse wins, and meaning no money is lost if it doesn't. This method can be frustrating; the firm's man bet a total of €12,000 on Grand National day and didn't back a winner, leaving them out of pocket after expenses were taken into account.
The arbsters are hated by some bookmakers and seen as a godsend by others, but they're already an accepted part of the betting ring jungle and are fast rising up the food chain. Whichever way it's played, with the exchanges getting stronger day by day, the chances of a well-organised team or sharp individual beating the on-course system are high.