This week’s podcast guest is UBET’s Gerard Daffy.
Gerard has a wealth of experience in bookmaking: from the days when the rails bookie ruled, to the introduction of internet betting, the invasion of corporate bookies and all the changes that have taken place in between.
- How corporate bookies frame their markets
- How the landscape has changed for the punter: are we better off?
- The ever-changing dynamic between racing and sport
UBET’s Gerard Daffy
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Mark Haywood: So my guest on this week’s podcast is Gerard Daffy, thanks for joining us Gerard.
Gerard Daffy: No problems Mark.
Mark Haywood: Just wanted to get you on, I think you’ve been on the podcast with Dave before, but just to give everyone a bit of a reminder, you’re obviously someone with a really extensive background in the bookmaking industry. Do you just want to take everyone through what you’ve done over the years?
Gerard Daffy: Well I’ve been a bit of a journeyman as far as moving around Australia is concerned. I think I was pretty fortunate, Mark, in so much as I had an interest in racing and betting before I left school, actually my teenage years I originated in Warrnambool, my dad was president of the greyhound club there. I trained greyhounds, trained my first winner when I was 12. I bred greyhounds, got involved in a bit of administration work when I was 17 or 18 and sold prices for the greyhounds to local bookmakers. Did form for some punters and also did form for the greyhound publications that were around at the time, so it was a pretty good grounding for me. After that I moved on to be a bookmakers clerk, that was the only job I took after I did year 12, or matriculated in those days and basically have spent every day ever since working in the gambling industry.
The normal week for me when I lived in Melbourne, was to go to all of the race meetings, trot meetings, greyhound meetings, whether they be on day or night in all parts of the state. Then I was fortunate enough that when Centrebet started, Centrebet actually got licenced in December 1992, but the guy who owned it, he had a business type of person who was there with him, they were a two man show and he identified that perhaps they’d be better off getting somebody with some background in betting. I also had a background in sports betting, in Victoria in those days you could go to the racecourses and bet there were four or five bookies there. One of my friends, Gary Walsh, was one of the first there, so I worked for him so I had an understanding of how that all worked as well. So that was an advantage, turned up at Centrebet in February 1993, there was only the three of us there, the office in those days was no bigger than your average size of an en suite.
That was pretty much it and it grew from there, it grew to where it was come mid-96 when the internet started. Centrebet was the second in the world to offer betting on the internet and within sort of a 12 to 18 month timeframe we were employing 250 people globally, most of those were as bookmakers or spotters for us doing various markets in different parts of the world. It’s different now but that was where it started anyway.
Mark Haywood: And you’re with UBET now?
Gerard Daffy: Yeah. I am with UBET. I left Centrebet in 2006, it was time for me to move on, it had various changes of ownership in that timeframe and the focus wasn’t really on Alice Springs anymore, it was centralised in Sydney, that didn’t really suit me so I thought there might be an opportunity out there in the big wide world, there were a few. I went to a couple places after that, one with no success at all, one was owned by some fairly wealthy Asians who thought that they could break into the market but they just lacked a little bit of insight into how it worked globally so they actually walked away, which was a massive surprise. They were on the cusp of something big happening and had they stuck it out for another six to 12 months they probably would’ve been one of the global leaders now but they chose to walk away.
Then in, it’s five and a half years ago now, TattsBet or UBET, TattsBet as it was known then, UBET now, were looking for a media type person and although I had no formal training in it that was pretty much what I’d dabbled in on the side throughout my Centrebet days and that was part of the reason for the success of it. We were a pretty approachable company who understood how it all works so I had a background in it so I came to UBET with that in mind but since then I’ve sort of diversified into other parts of the company as well, but that’s predominantly why I’m here and I love it, it’s terrific.
Mark Haywood: Good to hear. I just want to have a bit of a chat to you to about UBET who obviously run the totes for many of the states, run the tote for many of the states in Australia, but also being a fixed odds business, I think a lot of punters obviously have an idea of how a traditional rails style bookmaker did the form and framed them up. Obviously things are a lot different now working for what is a big corporation, are you able to give us an idea of sort of who or how you guys would frame the market for racing?
Gerard Daffy: Sure. You’re right, the marketplace has changed so much. I can remember going back 40 years when I go to the races, the bookies knew the form or they knew the punters who knew the form and more often than not those bookmakers paid punters for information or they could work it out. Basically you bet heads and it was pretty easy when you’re on a racecourse, there was no such thing as telephone betting and if a smart guy was backing a horse, all bookmakers employed runners to stand out the front and see what was being backed by different people and I actually spent a fair bit of my career doing that as well, that kept you on your toes.
It’s changed now, it all changed with the advent of the internet and how that’s evolved and I guess in this day and age, Mark, without sort of being derogatory to the industry, plagiarism is alive and well. You go to any bookmaking site in the world and they’re all betting on the same things. There’s bookmakers in Russia that bet on AFL, bookmakers in the Caribbean that bet on the WNBL for interest’s sake or Australian racing and it’s pretty easy because you just have another bookmakers site from that particular area and you either copy the prices or scrape the prices, there’s some pretty elaborate betting systems available out there now to small time operations and actually some big time operations use them as well. It’s completely automated, they just scrape prices from designated websites or bookmakers in a specific area, whether it be racing or sport or whatever and the system feeds into their system, they don’t actually need anybody to push any buttons at all.
We’re a little bit different at UBET in so much as we’ve got a team of bookmakers, it’s about 50 in total I think that work in both sport and racing, most of those are in racing. Sport is a little bit different in this day and age because most bookies bet on every sporting event around the world, you can’t physically do that and you can’t physically bet on them live so there are third-party providers that offer up a lot of that information or prices or events from around the world. The local stuff we tend to do ourselves.
The racing, well quite clearly in this day and age it doesn’t pay to be too far away from what the market is and you can have a look at, or any day of the week, come say 10 or 11 o’ clock and there’ll be a small variance in most bookmakers markets but you won’t see anybody way out of left field because they’ll get hammered or there’ll be an arbitrage opportunity with the exchange or whatever, so there’s any numbers of reasons why most tend to be with the market, whatever the market is. Now quite clearly some jurisdictions, there might be bookies who know a little bit more about that market, say it’s WA or say it’s Gatton or a Victorian greyhound meeting where you might slant your market that way but we actively promote our guys to do some form or as much form as they think is warranted for that particular meeting, have an opinion but you don’t have to go too far away from what the market is to get some value out of that opinion so go one way or the other but by all means have an understanding of what it is that you’re taking bets on.
Mark Haywood: You said you had a pretty big team of bookmakers, is that covering sport as well?
Gerard Daffy: Yeah it does. It’s funny how in this day and age there’s so much sport on TV, Mark, that you can actually get away with a lot less bookmakers than what you would’ve required say 10 to 15 years ago. Again, it’s the automated process that makes it so easy.
As an example, the biggest growth sport as far as betting is concerned is not only in this country, but it’s globally, is NBA, American basketball. You can currently I think pay $60 for the season to the NBA and get every game streamed on your device and there is an expectation now that you bet live on every game and not only the head to heads, but all these other bet types that are there pre-match. The game totals, who’s going to win the next quarter, et cetera. It’s quite feasible that there will be more bet types open in either a cricket match or a basketball match than what there were before the start, not physically possible to do that. So the systems now are so good that they can be run off the game price or the current score or how much time is elapsed or is to go, and there’s algorithms set behind all of that, so you just change one price in a head to head on a basketball game and 40 bet types might change at the same time. Sit down and have a think about how you would do that if you were one person pushing the buttons, it’s not possible, and the expectation is that that happens.
There’s been a streamlining of the numbers required to run a sports betting area now because of this automation, I just mentioned there on the NBA, pretty much takes place on all sport now and it’s being refined and refreshed and it’s altering so much that we’re going to see more and more of this and that’s probably why you could have a look at 20 or 30 bookmakers right now on a game of NBA currently in progress and they’re probably all betting the same price and all the same bet types as well.
Mark Haywood: That gives us a good point of view or a little bit of an idea of how things work in a corporate bookmakers these days. So you’re someone that has spanned the whole gamut, if you like, from the days of the rails bookie to now.
I guess it’s a very wide ranging question, but thinking in terms of an Aussie punter, our listeners, those changes in bookmaking, would you say it’s been for the better for them?
Gerard Daffy: Well yes and no. It’s definitely been for the betterment in so much as there’s so much competition around now that punters have never had it better. To think that you can go into a bookmakers site on a Monday before an AFL game on a Saturday and get 104% head to head markets and 104% line markets, and some bookies even give game totals on a Monday, which is I find quite incredible given the variants, particularly in Melbourne, that we see. So it’s a very, very competitive marketplace and whilst bookie-bashing is a pretty easy subject for most to do, it just sort of defies logic that you can actually survive in this caper with such thin margins, because not only now do you have the expenses of running your business, but product fees have come into play now where you can pay anything up to 2% of your turnover on an event that you’re taking a bet on.
The costs are going up at such a rapid rate, I guess the one thing in the bookmakers favour is that automation to some degree has kept the staff expenses down and who knows in the future, that will probably even drop further. There’s a lot of taxation coming into this country, the point of consumption tax, if that comes in everywhere, that’s going to be another factor as well and the prices will change. We’re in a very, very competitive market.
The deals that bookies offer now around the country and in some other countries as well, basically, it’s pretty easy to get a free bet or a free hit, the arbitrage punters love it when you can back one side with one bookie and another side with another, have no risk at all with an opportunity perhaps to scoop the pool, so there’s that aspect of it as well.
On the flip side, naturally enough with product fees and I guess this is one looking forward, the point of consumption tax, is that if you’ve got winning punters from a particular state or a particular jurisdiction you might look twice now at how you deal with those punters. Is it viable from your business point of view to be doing too much business with them? That will be up for the bean counters to deal with but I think if punters think it’s been hard to get on now in some places, it’s going to get a whole lot harder.
I guess from my viewpoint is, and in my days at Centrebet, we didn’t close accounts and we adopted a fair attitude where we prefer to bet somebody something decent, if we thought they were good or smart, we’d use that information and change the book around. But I sort of find it a bit bewildering now that some businesses, and it’s not only in Australia, it’s globally, this actually started to take place in the UK and parts of Europe, but it’s now filtered its way across here, it’s fairly common practise that if you’re barred on racing or you get cutback on racing it’s across the board. So if you want to have a bet on the AFL Grand Final, you’ll get nothing or you’ll get $5 and the price will still be there two hours later. Somebody can come in and have ten thousand, you can’t have another $5, I just find that staggering in this day and age that that’s how things are approached.
Mark Haywood: Yep, it’s a very common issue for a lot of our guys, that’s for sure.
Gerard Daffy: Yeah, it is, but having said that, and I know that these type of things make big news on twitter, but to be brutally honest, the rest of the country don’t care. The sports betting industry is a very, very small betting industry in this country when you have a look at the overall figures of gambling, I think it makes up some 5 or 6% and the minor percentage of punters that get either their account closed or chopped back is minuscule in the overall scheme of things. I know it matters to them and I’ve suffered the same fate, but you’re not going to get a hearing out there in the public because gambling is on the nose. I don’t think there’s going to be any big changes to that going forward, and in fact I think it might actually get a whole lot harder.
Mark Haywood: Yeah, interesting to hear. Just on that, on the racing side, that you guys have obviously got a big presence in Queensland and the minimum bet laws have just been announced.
On the fixed odds side, you’ve had some experience now with New South Wales and Victoria, has that been difficult to manage?
Gerard Daffy: Not really, I guess the only difficult thing with it, Mark, is you’ve got to make changes to your system. And again, these bet limits, to be honest, aren’t that high really, are they, in this day and age when you consider bets that were taken at racecourses 20, 30, 50 years ago, they’re not that high. But there’s a perception out there that these minimum bet laws will apply to every bet that’s submitted, that’s not the case. It’s actually the first person in the door or on the computer, should I say, that wants a price, they get onto win the minimum bet size and then nobody else. There’s no justification to bet everybody after that at that price or whatever.
We’ve been pretty lucky in so much as the limits that apply now in the states where they have brought in the minimum bet size, we bet those numbers anyway, in fact, probably a whole lot more. Some of those meetings, 1500, 2000, 2500, the theory behind it is the same, however if you’re a clued up punter or part of some of the betting syndicates that exist, and we identify that, we take the first bet and then we change the price anyway and then that’s how the minimum bet rule works, the next price change, the first person in the door gets it again. Once again, the minimum bet rule, whilst I completely understand it is really only relevant to that sector of the betting industry that are the moving the price. In the overall scheme of things, the big turnover punters but Joe public probably doesn’t care about the minimum bet rule because it’s never going to enter his realm of punting.
There’s a couple different ways of looking at it. Our systems did require some changes for that to take place and I guess everybody else is in the same boat so that each of these states are bringing in, you just got to make sure that you’re not contravening that particular rule as to that governing body in that particular state because of course it does put your agreement in jeopardy with them. But we actually haven’t had too many dramas down through the years in regards to minimum bet rules and whilst we have our critics on everything, as does every bookie in the world, I think most would agree that we treat people pretty fairly and we’re pretty happy about that situation.
Mark Haywood: Looking back to sport, you said it is still quite a small industry in the bigger scheme of things but in terms of bookmaking itself, how far has that mix actually changed from racing to sport in recent years?
Gerard Daffy: That’s a very good question because if you had of asked me that 10 years ago, I would’ve said racing is on the nose here, they haven’t seen the next generation of punters, they haven’t identified them, they don’t cater for them, in 10 or 15 years’ time that industry is going to struggle in sports on the up and up. But there’s been a resurrection with race betting, there’s been a massive shift from the pari mutuel pools to the fixed and I kind of get that. But a lot of that money has come from the next generation punter. Now I think part of the reasoning behind that is we had Black Caviar, we’ve got Winx, we had Weekend Hustler, we had those type of horses that people who didn’t either follow racing or get it, started to follow it. They had cult status those horses.
The other thing is that fixed odds inadvertently, the younger generation who started betting on sport, they understood what $2.50 or a $1.50 was and that’s why I think the shift in fixed odds has been predominantly from that sector because they know what $3.50 is, they’re happy to take that now but they don’t get the fact that it’s showing $9 and it pays $2.50, they don’t get that. Maybe they don’t know how to take quadrellas, they don’t know what an exacta is but pure fixed odds to win a race or to run a place or whatever, they completely understand and that’s been a definite shift. But the ratio of fixed odds to sport, it obviously depends with different companies and it’s a whole lot more slanted towards racing in this country than what it is in Europe, but I think the figure would probably be around 75/25 in most businesses, that being racing. So racing has sort of held its place over the past six or eight years but grown and of course so has sports betting as well. But in 10 years time it might be completely different again, it’s wall to wall racing on TV but it’s also wall to wall sport.
Mark Haywood: It’s good to hear about racing though. Probably one of the few people we speak to that think it’s still in a fairly good place so it’s great to hear.
Gerard Daffy: Yeah, but of course it can only remain in a good place whilst the TABs or the corporate bookmakers who put money into it from people who are betting on it, that’s a vibrant industry. Whilst all either cop their criticism or put their hand up and think that they’re doing wonderful things to keep things afloat, for sure and certain they are but for that industry to be sustained they really can’t afford to take a step backwards because it’s the dearest industry to fund anyway and such an important part of this economy. I think I read somewhere recently where gambling in total in this country was the third highest industry of employment and I guess racing would be a major, major part of that. For that industry to keep going it needs betting.
Mark Haywood: Absolutely. Just lastly on the sports side, you mentioned NBA before, but in terms of volume it’s NBA, AFL, NRL still?
Gerard Daffy: Yeah and soccer. They’re the three or four big ones. Obviously it depends on what your licence is and who your client base are, but at UBET they’re the big four. There’s not a terrible lot between AFL and NRL with us, obviously we’ve got a pretty big footing in Queensland where we’ve got two of the more successful sides of recent times, the Cowboys and the Brisbane Broncos, even the Gold Coast Titans, but AFL is such a major portion of the business as well now. Once it went to a national competition, or both of those went to a national competition there was a lot more interest in it. The codes are very good at promoting their product and also visually now you can watch all these games on pay TV and a lot of them are on free to air as well.
They’re the mainstay of betting in this country, soccer has always been the same as well, although it is worth pointing out that this year since European football disappeared off Foxtel there was a definite decrease in turnover and I think that’s probably pretty much across the board with Australian operators. That’s how important it is to have coverage in this country, which leads me to the success of the NBA. I said before that you can pay $60 and watch every game. The expectation is that you bet on every game and even some of these other competitions that people might not be aware of that exist, like Italian basketball or the WNBA. There’s huge increases in those because they get such good coverage in the marketplace at the moment, and of course there’s an Aussie influence with all of this competitions now, including the NBA. It’s immediate, the stats behind it are so good young people love stats and the information on who’s playing, who’s not playing, it’s instantaneous. So you can see why it’s proven so successful, it’s clearly the big one out of the American sports. Not far behind that is the NFL, not as many games but it’s hugely popular as well.
Mark Haywood: Sure, and just to finish up, you’ve been good enough to give us your time so we’re happy to give you a minute or so to chat to the punters, and as you’ve said it’s a very competitive marketplace. So if anyone was to ask why they would open an account with UBET as opposed to say somewhere else, what would you say?
Gerard Daffy: One of my mantras always has been, and the same applies to this business here, you’ve got to be a one stop shop. If somebody wants to bet on Darwin greyhounds today and the Italian volleyball or whatever, you can go and find that but rather than go and find it with two or three or four different operators, it’s much easier to have all of those under your own umbrella which is what we’ve tried to do. We’re always refining what we take in regards to sports events around the world and how we treat them.
It’s like everything, you’ve got to crawl before you can walk, some of these things we don’t know whether there’s interest in them or not, there are other things that quite clearly we do. So we spend a lot of time analysing the success or how we can grow those particular parts of the business and like any business at all, anything that’s not going well or we struggle to win at, we’re completely within our rights to bring those limits back on those events because at the end of the day we’re working here for our shareholders and we are a business, people often forget that. I think they just think there’s a bookie, there’s an easy target, let’s go get them, but we are a business the same as what Harvey Norman is or McDonald’s or whatever. We try to make it a one stop shop, we try and be fair with everybody that we can, I don’t think we cop too much criticism out there in punter land, certainly nowhere near as much as some of the others. We are approachable, we’ve got pretty good customer service here, if anybody has got any criticisms, by all means drop me or us a line. If we can’t get it to the satisfaction of the punter we’ll at least give an explanation as to why. We think we’re the good guys.
Mark Haywood: No worries, thanks for that Gerard.