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Inspired Gaming, inspired investment?
Over the years, bookmakers have expanded into a multitude of sports and other betting options, and as they have gained the trust of successive governments, they have been able to develop their premises to be more attractive and welcoming to both regular and occasional punters. Some of the latest betting shops look like upmarket coffee shops, a world away from the dingy, cloth-capped hideouts of the 1960s.
Horse racing, while still the most important single betting activity, accounts for less than half of the bets placed in shops; 10 years ago, it provided 70 percent of the turnover.
Today, there are 8,700 active betting shops in Britain, attracting 7 million people at least once a year, almost one-fifth of the adult population.
Bookmaking has indeed progressed over the years into a modern business, with an ever-changing clientele. The latest money-getter for them is fixed-odds betting terminals (FOBTs). They began appearing in betting shops six years ago, after then Chancellor Gordon Brown abolished betting duty. There are now 24,500 FOBT machines in UK bookmaking shops, and more than half belong to Ladbrokes and William Hill, which take more than £8 million a week.
What a business: no trade unions, no overtime, no security issues; just plug these machines in, connect to the Internet, and make money. Not surprisingly, casinos and bingo halls are now installing these high-staking server-based units in their premises, meaning 82,000 of one particular make are already in the British Isles alone.
Inspired Gaming Group (IGG) is the company with the big figures, and its FOBT products are in high demand both domestically and in new, potentially massive markets, such as Asia.
Unsurprisingly, Inspired Gaming's share price has doubled since launching on the AIM at £1.80 a year ago. Daily trades in the company have grown tenfold during the past 12 months.
There are dozens of reasons to expect this upward trend to continue, not the least of which is Goldman Sachs' decision to purchase a 22 percent stake in the outfit. I'd say they are as good a judge as anyone, and I will be ploughing some of my hard-earned into IGG.
It's the dogs. No, it really is!
Greyhound racing is one of those sadly long-forgotten betting mediums that has nurtured so many legendary gamblers; most notably, in recent times, former
World Series of Poker main-event winner Noel Furlong, Harry Findlay - dog racing is his foremost love - and, on the other side of the fence, bookmaker Gary Wiltshire.
Its slow demise can be blamed on a number of factors, but I'm not here to write a thesis on that subject or the loss of tradesman such as tic-tac men and the dwindling number of on-course bookmakers.
I want to point out that greyhound racing offers punters both the best and worst betting medium available in the marketplace.
The side on which toast usually falls (facedown), the absolute worst of it, is BAGS (Bookmakers Afternoon Greyhound Service) racing. Here, you have absolutely no chance. I mean, the margins are so heavily stacked against you, you are better off betting on the animated dog racing nonsense from Millersfield and Muzzelboro. That's right, the betting percentages offered on these computer-generated races are fairer to the punters than the real thing!
Quite simply, BAGS races are ultracompetitive, and opening betting shows of 7/2 down the card are commonplace. In fact, an SP of 4/1 for every runner in a race has been known. It happened just recently.
Naturally, every runner should be returned at 5/1, given they all have an equal chance of winning. That makes a perfect SP percentage of 100 percent, or represents a 16.66 percent of each dog winning. However, a 4/1 SP for the entire field (20 percent per dog) means a 120 percent book, a 20 percent margin in the bookmaker's favour.
It gets a whole lot worse; in that "perfectly graded race" in which the entire field started at 4/1, the BAGS forecast paid £20 to a £1 stake, the equivalent of 19/1. If that does not sound fair, just consider that there are 30 different forecast combinations, and the dividend should have been £31.
On to the tricast, there are 120 different ways to put numbers 1-2-3-4-5-6 into a first, second, and third order, and yet the dividend was just £60! It does not take a brain surgeon to figure out that you are going to go broke in no time at that rate.
But, as I said, the right type of greyhound betting can offer some outstanding opportunities. Year in, year out, staying loyal to fancied runners amongst the antepost betting lists in major competitions has proved to be more profitable than Microsoft shares. I'm talking specifically of competitions with field sizes ranging from 48 to 200 runners, expressly the Derby, Oaks, St. Leger, Blue Riband, Champion Stakes, and the like.
Here, with all the major off-course firms pricing them up, the overall betting percentage can be as low as 110 percent, meaning that if you could omit 10 percent of the field, you would hold every chance. I declare that you can often safely put a line through 60 percent of the entries, as these competitions simply do not go to no-hopers.
Do be very careful here, as competitions with 32 runners and fewer have a far more select field and there is far less deadwood in the field, but, essentially, the larger the field size, the more outclassed runners there are amongst the entries, simply to make up the numbers.
Up or Down?
By Thor Henrykson
Down. Definitely. And, unfortunately, I am talking about the near-term direction of the global economy cycle. The past eight years, administered by the hegemonic empire of George Bush, have been a fetishistic orgy of low interest rates, uninhibited spending, and free printing of the U.S. dollar. In fact, no administration in history has printed more currency than Bush. Thus far, this liquidity excess has been a boon for the U.S. consumer, who keeps the global economic wheels turning with his excessive over-consumption.
But the U.S. consumer is fat, tired, and just about tapped out. Gone are the good days when ever-increasing wealth was being pulled out of rapidly appreciating mortgage assets (said to be America's last piggy bank). Increasingly, the feeling is that the end is near, and the bill is due. And it's not looking pretty.
The vast majority of homes purchased in the U.S. in the last two years are worth 20 percent-30 percent less than their bank mortgage. Variable interest rates, used to lure less-than-credit-worthy (sub-prime) home buyers, are adjusting upward, creating unaffordable mortgage payments. People are defaulting on their loans, and simply walking out of their homes, never to return. The bank forecloses on a property, and tries to sell the home to another buyer, though currently there are almost no buyers left. To exemplify how bad the problem is becoming, in "boomtowns" like Las Vegas, one in 60 houses is now in such foreclosure.
The resulting credit crunch is now starting to spill over to the broader economy. Citigroup (NYSE: C), the largest bank in the U.S., is writing off at least $18 billion in losses tied to these mortgages this quarter, with more bad news to come from other banks. Almost all financial institutions are overexposed to these mortgages, which were secured and traded among the banks of the world as Structured Investment Vehicles. These SIVs now have little or zero value, and the market for them has completely evaporated. Though no one is quite sure how big this problem is, some are calling it the "$1 Trillion Problem." What's next is a massive and painful global repricing of debt and credit.
And like all other trends, what happens in the U.S. soon follows in Europe. This, dear reader, can only mean that the loud pop of the real-estate bubble bursting, and the bank woes that follow, are coming to a EU country near you. So, what should you do? Do what the U.S. Vice President Dick Chaney (Darth Vader?) has done. His portfolio is positioned such that he profits from a dropping dollar and increasing interest rates. Shorting or buying puts on U.S. home builders and banks has also proven very lucrative for Antepost, which plans on doing the same in the EU. Happy new year!
