As you may have seen, bookmaker Paddy Power announced its annual results this week with a humorous photo-opportunity in which the company’s chief executive attempted to strangle the popular Irishjockey, Barry Geraghty.
The implication of the photograph was that bookies had been forced to take drastic action to curb Geraghty’s success. This is what’s known in the humour business as a “conceit”. Any real desire the company might have had to terminate the jockey would have been more than offset by the 2003 results which, as the report beside the picture revealed, featured record profits of E20.4 million.
True, Geraghty did inflict a lot of pain on bookmakers in the early part of the year. First he rode a whopping five winners at Cheltenham, including the Irish “banker,” Moscow Flyer. Then he won the Aintree Grand National on a horse that was also carrying half of Ireland’s gross national product. Geraghty aside, such was the run of winning favourites last spring that Paddy Power had to issue a profit warning.
But – surprise, surprise – punters failed to capitalise on their first-quarter successes by divesting themselves of their horse- racing interests and putting the money into hedge funds. Instead, they kept on backing horses throughout 2003 – and as sure as a two- and-a-half-miler with a bad leg running in the Gold Cup, they got caught well before the finish.
The bookies’ winning distance was – I’m quoting from the report – a “gross margin”.
There are no certainties in betting except that, in the long run, punters always lose. A useful way to remember this lesson is to reflect on the little word “nap”, as used by racing tipsters to indicate their best bet at a meeting. According to my Oxford English Dictionary, the word (also used in card games) is an abbreviation of “Napoleon”! And right enough, Napoleon was a racing certainty for most of his career. But as we all know, he had a very bad fourth quarter, culminating in his defeat at Waterloo (where he went off the 8-11 favourite).
According to the Daily Telegraph, one of the reasons Paddy Power cites for its success is that betting “has become more respectable”. Respect is something bookies clearly crave, which explains their habit of calling themselves “turf accountants”. But it is undeniable that, with such developments as spread-betting, the profession is becoming less and less distinguishable from the financial services sector.
Reading the Racing Post’s European soccer coverage on Wednesday, for example, I noticed that the tipster was strongly recommending a bet on Chelsea to beat Stuttgart. In the conventional market, the Londoners were a 6-4 chance. But the Racing Post man’s advice was that they should be backed “on the Asian handicap off scratch at 1.9 (4pts)”. And I would have taken his advice too, if I had any idea what it meant.
Also, while bookies have been taking strides towards respectability, the financial institutions have been coming back to meet them. Thanks to the work of such men as Nick Leeson and John Rusnak, the public has an increased understanding of the way high finance works, to such an extent that picking horses with a hat-pin now appears sensible. Rusnak has had a particularly profound effect on Ireland. Although US-born, he was, in a sense, an “Irish banker”, but not nearly as reliable as Moscow Flyer.
If current trends persist, it won’t be long before banks are using euphemisms to describe themselves. Meanwhile, bookmaking firms will be running glossy television ads featuring attractive young people with gleaming teeth inviting us to “talk to one of our investment advisers today”.
Another factor in betting’s new respectability could be the Government’s notorious fondness for visiting bookie’s shops. The coalition famously backed itself to win the 2002 election, and Mary Harney even landed a wager on the PDs taking eight seats.
I’m not saying this performance was unexpected, but if the party had been a horse, there would have been a stewards’ inquiry.
Betting is not, of course, confined to the governing parties. One of Ireland’s best-known bookies is Ivan Yates, who was once tipped as a future taoiseach, despite running in the unlucky Fine Gael colours (blue shirt with green trimmings). It says everything about the shrewdness of bookies that Yates retired from politics before the last election.
Despite all this, I suspect that some of you respectable readers will be hoping I have a good tip for Cheltenham. And sure enough, I have. My recommendation, if you have the money, is to buy a pub* there, close to the racecourse. If you’re planning to back horses, however, I’d like to issue the following profit warning: you probably won’t make one.
* nap
