The origins of bookmakers have faded in the past, but betting, especially on horse racing, has been ingrained in the character of England for centuries. Originally, betting would have been between individuals, with the largest sums wagered on classic races such as the Derby and the St Leger. Gambling was the domain of the wealthy, but betting contracts, in which money did not change hands, often led to large debts and animosity. The Gambling Act of 1845 outlawed this practice, and bookmakers began to insist on cash payment in advance.
Betting shops began to be established all over the country, but were banned by the Gambling Act of 1853 and not legalized until May 1, 1961, after which 10,000 were established in 6 months, and some of the illegal bookmakers made it through the new vetting procedures, established by the Gambling and Gambling Act of 1960. However, many of them found that entering the world of business was beyond their capacity, as they could not set up premises, pay staff and ‘go straight’. In addition, the betting tax was increased and the Government imposed a 33 percent tax on fixed odds coupons issued by bookmakers. The number of High Street shops began to dwindle and there are now just over 8,000.
Punters could only hear audio commentary on the races at the bookmakers, provided by the Exchange Telegraph Company, with each region having a ‘local’ commentator with a ‘local’ accent. In 1986 the regulation was relaxed and television screens that would carry live races via satellite were allowed to most stores. Bookmakers were allowed to open in the evenings and on Sundays, but the 10 percent tax was driving punters to illegal bookmakers, who, operating out of pubs, clubs and factories, accounted for 10 percent of betting volume.
Two other events have had a major impact on bookies: the first when Frankie Dettori rode the winning seven at Ascot in 1996, resulting in massive payouts. The second was the introduction of the National Lottery and in particular scratch cards in 1995, denying bookmakers the right to sell tickets. A government survey on gambling revealed that 57% of gamblers use the lottery, 20% buy scratch cards and 17% bet on horse racing.
However, in the last decade, steps have been taken to rebalance the nation’s gaming drives. The tax on bets at bookmakers was reduced from 10% to 9% and abolished in 2002, in favor of a tax on bookmakers’ gross winnings. Rules regarding football betting have been relaxed, allowing bets on individual matches, and bookmakers have been allowed to install fixed odds betting terminals and slot machines.
Online gambling is the current concern of bookmakers, but the figures suggest that the world of internet gambling and betting shops could co-exist: the four largest betting shop companies still appear to be heavily committed to betting shops. William Hill currently has over 2,250 stores; Ladbrokes has 2,350; Coral owns 1,600; and totesport manages 540. Paddy Power, which has 58 British stores, mostly in and around London, announced earnings of £55.2m for 2007, half of which came from online operations. But its UK stores also made money and it plans to double that by 2011.
