In these computerised days, it is extraordinary that bookmakers persist with an antiquated and outmoded Starting Price system that relies on taking sample prices from on-course bookmakers.
The SP is linked to bookmakers’ gross margin and, when you consider that racing’s central funding is currently based on 10.75% of that gross margin on horseracing bets, you see that it does have quite a lot to do with the levels of prize-money for which we are racing.
How much more rational it would be if the betting industry adopted the logical approach of determining the SP according to the actual amount of money bet on a race, the vast majority of which comes from off-course punters.
When you think what it’s like at ordinary weekday meetings, especially in the winter, with low attendances and often very small sums bet on-course, and then consider how it affects the comparatively huge sums of money being bet off-course, you have to wonder how this has gone on for so long. If ever there was a case of the tail wagging the dog, this is it.
As it is now, on-course bookmakers take the Betfair price and offer a fraction less on their boards, so one could argue there is a greater off-course element being reflected in the SP than is bet on the racecourse. Nonetheless, it is a convoluted system whose roots were planted long ago when, proportionately, much more betting actually took place on the racecourse.
When this subject has been raised before the notion of making the SP reflect the volume of money bet was rejected by so-called punter representatives who claim bookmakers would use it to exploit punters. However, we never hear an outcry from disgruntled punters when ‘industry’ SPs are returned after big betting events, such as Arc day at Longchamp and the Breeders’ Cup.
With digital technology, it would be so easy for the major bookmakers to get together with Betfair and agree on a system where horseracing bets are sent to a central database after each event. Pre-set margins would be deducted and the SP would be determined from the amount bet on each horse. It would be ready at the touch of a button after each race.
Punters would not lose out because those who were looking for the ‘value’ would continue to take a price from any number of bookmakers
Punters would not lose out because those who were looking for the ‘value’ would continue to take a price from any number of bookmakers offering differing odds and those who continued to bet at SP would not be aware of any difference.
We know the major bookmakers would immediately be aghast at the idea of sharing information with their rivals. But this doesn’t have to happen.
Under the current system, the Starting Price Regulatory Commission is an organisation that ensures the integrity of SPs. The new system would require a similar organisation with a similar remit. Acting above the individual bookmakers, the commission would ensure the system worked properly without giving away any of the detail, but at the same time making the overall total amount bet on each race known publicly.
It would therefore be an excellent move for racing because at once the industry would know how much money was bet on an individual event and this would provide invaluable information for building the race programme – far better than the bits of data that currently trickle through from some bookmakers.
As I have said, this might be an issue for those representing punters who would be suspicious of bookmakers exploiting the new system, but there is a natural link between betting margins and volumes. Bookmakers are only too well aware that setting margins too high in their favour would inevitably have an adverse effect on volumes in the long term.
Members of the betting industry are usually very good at knowing what is best for them. They should give this proposal serious thought because the current system is a relic of a bygone age.