Pagebet Bookmakers Demise Not Due To Tight Margins
The recent administration of Pagebet Bookmakers is been used by leading Bookmakers as a sign of how diificult conditions in the industry currently are . However whilst this approach may suit their purpose it is a very simplistic view and is not borne out by the facts .
William hill boss Ralph Topping whilst calling for the abolition of the levy system yesterday cited stated "Just look at the demise of Pagebet for an example of how tight margins are " .
Undoubtedly for most of 2009 there was downward pressure on bookmaker’s margins particuarly football but there was a 100/1 winner of the Grand National and William Hill achieved an OTC gross win margin of 17.7% in their shops on the year .
Pagebet during 2009 suffered from management who had a poor understanding of the business and introduced a loyalty scheme across all shops that was hugely expensive and followed that by offering "Best Odds Guaranteed " on all races across the 59 shops .
Combine that with dismantling the Shop Operations management team and you have a recipe for disaster .
The main problems faced by retail bookmakers currently is a reduction in stakes caused by the recession and a continued weakening interest in horseracing as the core product .
This has happened before during previous recessions and bookmakers and the racing industry need to face up to it or face the consequences .