As a punter involved at the sharp end of betting for profit, nothing warms the heart more than seeing the bookies taking a battering – such as the stories in the press this week about the major losses incurred as Leicester won the Premier League.
Normally, you have to take stories about bookie losses with a pinch of salt as they are published solely to encourage punters to take less than shrewd bets with them.
We see it all the time with accas (one of the bookies favourite bets) and throughout a regular season, there will be plenty of bookie tales of the punter who turned £1 into £50k with a lucky 8-fold accumulator. They simply want you to place more accas as they make plenty more on them than they pay-out long-term.
Yet it appears in the case of Leicester City, they have indeed cost the bookies a small fortune in the outright market. I have read estimates in the region of £20 million across the industry with Skybet alone claiming to be £4.6m out of pocket. We will never know the exact figures and bookie PR departments are often guilty of inflating the numbers, but what is clear is that big losses have been incurred.
Not Just About The 5000/1 Winners
The headlines about these major losses have all referenced the fact it was a 5000/1 winner and whilst there were a few lucky (or shrewd!) punters who took this bet, the biggest liabilities came from those bets placed in the first few months of the season.
Coral’s head of football trading outlined more about the losses in his blog article earlier this week…
“It’s bets taken from September to November time, once people have seen a potential remarkable story emerging and that team is still available at a huge price that leads firms to have possible seven figure losses.
It really doesn’t need too many to buy into the romanticism of “this could happen” and have their £2’s, £5’s and £10’s to build a big liability. The bets on those types of selections generally aren’t from “sharp customers”, lots of firms will have mathematical models these days telling them the price they’re laying is fine, and because we see it happen every year, and have never had any sort of sweat at all as a result of it, no one saw any need to worry. “It’s only Leicester. They’ll drop away soon. It’s only Leicester, they’ll drop away soon. It’s only Leicester, they’ll……oh shit.”
Many of these bets between September and November 2015 would have seen Leicester available at over 100/1 as many punters stumped up fairly optimistic bets in the hope of a major fairytale win.
It is these bets, more than some of the 5000/1 pre-season ante-post bets that did the main damage and just why the bookies took a major hit in this market.
What They Don’t Tell You
Whilst the bookies took a major hit in the Premier League outright markets, what they are being less clear on is just how much money they have made in other markets which haven’t gone to plan this season.
Greg Wood of The Guardian put it well in his own article on the topic earlier this week…
“they (the bookies) may have paid out a lot of money on the Foxes on Tuesday morning, but Leicester’s 5,000-1 title victory was not achieved solely by the outstanding performances of Claudio Ranieri’s team. It also depended on every other fancied team underperforming significantly over the course of the season, with the inevitable result that, almost without fail, the bookies cleaned up on the Saturday coupons from one weekend to the next.”
And of course, it’s not as if the bookies are short of other ways of making money either. As one Twitter user put it this week – The 20 million hit the bookies took on Leicester is the equivalent to just 4 days of profit from their Fixed Odds Betting Terminals (something I am firmly behind is the campaign to have max £2 stakes implemented on)
Safe to say, you won’t be seeing a bookie on a bike anytime soon!
Will Lightning Strike Twice At 2000/1?
Given the success of Leicester, how will bookies be pricing up similar teams for next season and is backing 5000/1 shots a genuine way to betting success?
Well, the current best odds for anyone to win the 2016/17 Premier League can be found on Sunderland & Norwich at 2500/1 with Betfair, whilst the biggest price for a team confirmed to feature in the top flight next season is 2000/1 on West Brom and Burnley.
I actually spoke to one odds compiler for a major firm recently who told me if he had the option, he wanted to run a series of 5000/1 promotions on similar unfancied teams next season to try and tap into the vast number of punters looking to replicate Leicester’s success.
He saw the type of punter who takes these kind of bets as those he wants to take on or to put it less kindly – mug money.
He couldn’t foresee lightning striking twice and although he took a hit on Leicester, was happy to stick his neck out again.
Why Backing At Huge Odds Doesn’t Work (Well, most of the time!)
Regardless of how the bookies price up Leicester next season, their success does beg the question – is backing 5000/1 or even 150/1 shots (as Leicester were a few months in) a genuine way to make money betting?
Realistically it isn’t and whilst these big winners attract the headlines – they are rarely sustainable and can mislead punters to thinking it’s a route to success.
Take one tipster I was asked to look into recently. He specialised in ante-post betting, usually at odds of between 16/1 and 40/1 and on the face of it, had a great record with 20.5% ROI from 650 bets over the course of 3 seasons.
Ultimately though, his success came off the back of a few good winners back in 2013 at 20/1 (twice) & 33/1 and all told, that year’s returns accounted for 89% of their current total profit.
2014 made a small profit, whilst 2015 showed a similar sized small loss and it is only 2016 which has made any further headway, thanks largely to a placed bet at 50/1.
Had you followed them just in 2013 then you would have been very happy indeed. The likelihood however is this tipster became popular thanks mainly to their performance that year and those joining subsequently have yet to see the returns they hoped for.
Ultimately, we decided not to review this tipster as it doesn’t fall into the category of those we feel can make sustainable and reliable long-term profits. Yes, it may enjoy occasional success but would you wait 3 years to turn a profit? Was the success in 2013 a one-off?
Similarly, if choosing to back a side next season at 2000/1 in the hope they will replicate Leicester’s success – you might have to wait a very long time indeed to see the fruits of this labour.
It might be worth throwing a few quid on as many punters did as a ‘fun bet’ but certainly isn’t a particularly realistic option to make you money punting long-term!
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