Cheltenham

As bookmakers reflect on a successful Cheltenham, I have been left wondering about the logic of racing's accounting year being so weighted towards a short-term view of the world.

Consider these two bookmaker quotes.

First, from Ladbrokes:

[The Gold Cup] was a result beyond our wildest dreams. The cheers for Imperial Commander came from the bookies and we roared him up the Cheltenham hill. The gamble on Kauto Star was colossal. Had he won we’d have handed back all the cash we made earlier in the week. Getting the big two beaten was nothing short of superb."

And this from William Hill: "This will go down in history as the worst set of results Cheltenham punters have experienced."

One can imagine that a similar sentiment was felt by the hierarchy in racing. In simple terms, the estimated £60million that the bookmaking industry won will result in a £12million levy differential compared with had the industry lost a comparable amount.

Of course, it works both ways. In 2003, when 10 out of 20 favourites ran in, the opposite was true: the bookmakers took a bath, and the levy fell by a commensurate amount - the loss to the betting industry being doubled up in levy terms, because it would have been offset against previous, levy-generating, gains. With two weeks left til the end of the accounting period, the figures never recovered.

This year, the fact that 10% of the £60million will come to racing will doubtless be seen as a good thing. But I'm a bit sceptical, myself, about racing rejoicing that its biggest set of customers should have suffered four days of pain. If the same thing happened consistently over a five-year period, sensible punters would start to spurn Cheltenham as 'impossible', 'a lottery', a 'punters' graveyard' - and would bet on something that gave them more of a chance. The long-term impact on the sport could be disastrous in that scenario.

The fact is that the fastest way to turn a customer away from the game - any game - is to leave him feeling that he never had a fair go. Casinos know this very well, and are all about recycling funds and making sure the customers get a good run - the very reason that slot machines pay out more than they are required to do by statute. It's about the lifetime value of the customer, and not about how quickly you can bleed someone dry.

I remember watching a race not so long ago where the short-priced favourite was beaten, and two of racing's most senior figures, who were standing next to me, high-fived each other at the benefit that would bring the levy. But where the traditional bookmaking industry can delight in its adversarial relationship with its customers (because it knows that those customers will keep betting with them, and will simply find themselves a new product to turn their luck), Racing has no such luxury: if punters decide they lose money too quickly when they bet on the horses, they'll punt on something where they think there is more representative form on which to base an opinion. Like football, perhaps.

So, while I wouldn't begrudge Racing a wry smile that this is a good year and not a lean one, I do wonder whether it would not make more sense for the sport to move the end of its accounting year so that the biggest week of punting doesn't come right at the end of it. A bad week for punters at Cheltenham might be good for the sport as a one-off; but in terms of lifetime value, it doesn't serve for Racing to rejoice in its customers' misfortune, and doing so over a period could have serious implications which are not immediately apparent when this year's levy figures are announced.