Monday, 22 February 2010

Hug a Hoodie

What a comedy response from David Hood, William Hill's PR director, to a letter in yesterday's Racing Post.

I can't link to it, unfortunately. Luckily, my lovely PA, Andrea, was prepared to type it out for me. It's reproduced below.

Why is it comedy? Because David seems incapable of answering any question without having a pop at Betfair and its business model. "What's the weather like today, David?" "Betfair doesn't pay the right levy." It's akin to having a mild form of Tourettes. The knee-jerk response from Hills, whenever someone points out something about their business that hasn't worked, is to have a pop at us instead.

You might imagine we'd be weary of it our end, and it's true that we'd like to put the arguments behind us. But in another respect, I read this kind of stuff with a certain amount of glee.

I still credit David with having done more to promote Betfair's business than any other person. That's because, way back in 2002, when no-one knew anything about us, Channel 4 did a short piece about us which they put into their programme from Sandown one Friday afternoon. Admittedly, it was a bit of a puff in the end: a seven-minute explanation of how we operate.

David was at Sandown that day, and it's fair to say he didn't like it one little bit. He obviously felt it was a bit of an advert, and to be fair to him he wasn't far off.

Demanding an immediate right of reply, he stood in front of the camera and went reasonably potty. How could Channel 4 give publicity like that to such a terrible company, he asked? After all, we paid neither tax nor levy (he said).

Of course, we did both. Notwithstanding arguments about how or how much, the fact was that we were paying, at the rates demanded (as is true today). So it was a fairly short conversation I had with the producer of the programme as soon as they went off air: he'd heard it; I'd heard it; all the audience had heard it; and it was inaccurate. What could Channel 4 do to put it right?

I suggested two options: either an on-air apology and correction, which would frankly have been embarrassing for everyone; or, have David, or someone else from William Hill, repeat the allegations at a time when we could give a response.

Fifteen minutes later, the producer called me back and asked we could get someone to Lingfield Park the following morning, to be a guest on the Morning Line. The debate there, with me representing Betfair against William Hill's chairman John Brown, kicked off the 3-year fight which resulted in the Gambling Act 2005. Not only did it end up putting in place legislation which stood by our view of the world and rejected the bogus arguments being advanced by others; more importantly, the publicity it generated did more, in my view, to further Betfair's business than any single other thing that happened in our first five years - a period which included us becoming the shirt sponsor of a Premiership side...

I certainly can't complain about that!




The letter, from an Edward Benson of London, reads as follows:

It is indeed a sad day when, after 35 years of enjoying the ‘Sport of Kings’, as an owner, punter and enormous enthusiast with a long family history of involvement in racing (my late father was Charles Benson, a renowned journalist and gambler), I walk into a William Hill shop in the City of London and ask for an ante-post best of £1,000 each way-way on Peddlers Cross at 14-1 in the Neptune Investment Management Novices’ Hurdle on the Wednesday of the Cheltenham Festival.

I have never been more astonished than to be told that I was only allowed £200 each-way despite the fact that the race is over a month away and at the biggest turnover meeting of the year. But despite an approximate £600 million of bets taken, they then had the audacity to cut the said horse to 12-1 for the sake of £200.

How William Hill can look themselves in the eye and say that “it was a trading decision” is beyond me and exemplifies why the bookmaking fraternity is milking the system for their own benefit.


And David Hood's response? Here you go:

It’s a fair cop guv. Sometimes, we have to hold our hands up and say yes, sorry, we got this one wrong.

“Having discussed the process behind the trading decision, I must apologise because the trading decision, in this instance, was probably a little too harsh. If Mr Benson returns to the shop where he placed his bet, with the original slip, we’ll be happy to lay him another £300 each way at 14-1.

“However, for the defence and notwithstanding Mr Benson’s lineage or how much is taken by the entire betting industry at Cheltenham, he’ll understand how trading decisions are about managing liabilities directly relevant to an individual event. Only that event and at that moment in time, not based on the entire turnover of the meeting.

“The ante-post market for the Neptune is the weakest at the festival. A decade ago no market would have been available on this race until the five-day stage. Peddlers Cross had already been well backed prior to Mr Benson’s request and in this instance he was a stranger walking in to a shop wanting to take out another £17,500 from a horse that was already a decent loser. To take that bet in its entirety each and every time, is not good business management and I make no apology for that.

“As for the quip about ‘milking the system’, surely this is back to front? Licensed bookmakers are the rapidly diminishing breed that still pays anything worth a damn to racing.

“Regulated, licensed and levy-paying, add in picture rights and race sponsorship (including each day of the festival) and bookmakers will collectively pay in the region of £140m to racing this year.

“Now, compare that directly to the revenue derived from the facilitators or unlicensed, non-levy paying layers and ask yourself, who is really milking the system? Some racecourses embrace them and then are bewildered that the levy continues to fall. Will there even be enough income to racing for a Cheltenham Festival in a decade.

“Incidentally, at the time of writing (and proofed to the Racing Post) these same non-levy paying layers are offering a whole £2 at 5.4 about the favourite Rite of Passage, while a commission free 9-2 is freely available with fixed-odds firms and a mind-blowing £2 at 13-1 about Peddlers Cross and absolutely no market place – I’d say £2,800/£200 each-way looks a fair bet now!”




6 comments:

  1. Best advertisements Betfair has ever had have been moaning bookie CEOs. You'd think a decent PR analyst would tell them to shut the hell up, but nope, their egos get in the way....

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  2. Unfortunately the UK style of bookmaking is infiltrating Australia at an all-too-rapid pace. Banning winning punters happens so quickly now it's a joke. Long live Betfair I say.

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  3. 'bewildered that the Levy continues to fall'? Levy figures for the last ten years are...

    2008/09 91.6
    2007/08 115.3
    2006/07 99.2
    2005/06 99.3
    2004/05 105.6
    2003/04 110.7
    2002/03 79.9
    2001/02 72.9
    2000/01 60.3
    1999/00 59.4

    An increase of well over 50% since Betfair come into existence and the biggest ever in 2007/8. Last year was poor, but the overall trend is increasing. Does Mr Hood get any facts at all right?

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  4. This comment has been removed by the author.

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  5. Eachway - I have to disagree with you. The overall trend is declining and declining rapidly.

    I gave a talk recently that included looking at the Levy and when you take into account inflation you get a different set of results:

    ...........Lvey 'mil.... Levy in '09 money 'mil

    2008/09 .....91.6..............91.6
    2007/08 .....115.3.............117.6
    2006/07 .....99.2..............103.2
    2005/06 .....99.3..............105.4
    2004/05 .....105.6.............114.6
    2003/04 .....110.7.............122.7
    2002/03 .....79.9..............89.7
    2001/02 .....72.9..............83
    2000/01 .....60.3..............69.5
    1999/00 .....59.4..............69.3

    So if you take out the 07/08 figure which was much larger due to significant losses by high rolling clients which lead to increased levy, you can actually see there has been a steady decline in the Levy since 2003/2004. Last years Levy was actually only marginally higher than 2002/2003!

    Take into account the increase in the fixture list during this period and it means the Levy is actually making much less per race than ever before and the spread of the Levy is much much thinner.

    So your 50% increase since Betfair came into existence is way way off the mark. There has been an increase but I very much doubt that has much to do with Betfair but more the fact that on the 6th October 2001 the Government changed the way betting was taxed which led to a 70% increase in betting turnover.

    However, the decline in Levy is also not just because of Betfair but many many other factors. Expect the levy to fall much further with all the big Bookmakers like William Hill and Ladbrokes moving their online and telephone operations offshore and therefore not paying a penny in Levy on bets struck in this manner.

    Also look at the amount of racing lost this year already and the amount of payments the Levy board will have to pay out for the lost fixtures and it won't make happy reading!

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  6. It's a fair cop. My research was not good and I stand corrected. However, Mr Hood seems to think that people betting in-running at the racecourse (when they likely would not be betting otherwise) is somehow detrimental to the Levy. It is difficult to see how he reaches that conclusion.

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