Betting used to be a simple pleasure. You took a punt on Happy Lad in the 3.15 at Wincanton. If he romped home ahead of the field, you went to collect your winnings. If not, the slip was a further example of the futility and danger of gambling addiction. The "worst" that could happen, however, was that you lost a pre-determined stake, something you decided for yourself when you placed the bet.
That has changed. The latest and certainly the fastest way to lose your shirt is spread betting. The fad started as a way of increasing the range of odds, by gambling on a range of possible results. Unlike conventional gambling, however, the amount you win or lose depends on how close you come to the "spread", a mid-point set by the bookmaker.
The bookmaker chooses the most probable result, sets a small range, or "spread", either side of it, and you bet which way either side of that central spread the result will be. If you think the spread is too high you make a "sell" bet, which means you believe the result will come in under the bookmaker's estimate. Conversely, if you believe the spread is too low you make a "buy" bet and hope the bookie has got it wrong the other way round. Then sit back and watch the action.
Roderick Green, a City-based fund manager and fanatical West Ham supporter, knows all about the triumphs and tribulations of spread betting. "Last week, I had a tenner `sell' on West Ham scoring the first goal in the first 20 minutes of the Coca-Cola quarter-final with Arsenal," he says. "The Hammers' goal came in at about 17 minutes, so I made about pounds 70 because the bookies had a spread of 25 to 28 minutes for that to happen. Trouble is, Arsenal won 2-1 anyway."
The original spread-betters were almost without exception young, rich and heavily testosteroned City types. But according to Ladbrokes, its spread-betting clients now include artisans and policemen, and even a professional golfer and a weather forecaster. A quarter of earn between pounds 10,000 and pounds 20,000 a year, nearly 60 per cent are between 35 and 54, and half live outside the South-East.
Spread betting was invented in the Sixties by the bookmakers Coral to encourage gambling on movements in the FT 30 share index. It was extended by City professionals who set up the IG Index in 1974, initially to let colleagues bet on the movements in the gold price which had been was decontrolled in 1972 and was going up and down rapidly.
The craze has since crossed the species barrier to include sport and politics. IG is the leading expert on political betting. Sports betting is dominated by the Sporting Index which has almost half the market, Ladbrokes and William Hill, which employ teams of experts to balance the risks by setting spreads and constantly updating them. Angus Loughran, "Statto" in the Fantasy Football television programme featuring David Baddiel and Frank Skinner, started life as a Ladbrokes soccer pundit.
Punters can bet on everything from the performance of the favourites at a race meeting to the number and timing of goals, to how many yellow cards will be shown in a game, the sum of the numbers on the shirts of all the goal-scorers, the number of games in a round of the Wimbledon tennis championships, or the number of ducks in a Test series.
Last year's favourite punt, in which millions were wagered - and lost - was on the scale of the future Labour administration's Commons majority. This year, the big event is the World Cup. Sporting Index is offering a spread of 166 to 169 goals for the 64 matches.
Ladbrokes has devised special contracts to limit gains and losses, to reduce risks and attract nervous novices. But for the really committed it also offers "in-running" bets, which allow punters to offset what might be losing bets while the events are actually taking place.
Spread betting is only done over the telephone. Punters must open an account and, after checks, are granted a credit limit.
It is important to realise that, unlike conventional bets, debts from spread betting are legally enforceable and bookies have the right to take defaulters to court to recover debts.
how spread betting works
Take, for example, a spread bet on the timing of the first goal in a soccer match. The bookmaker offers a "spread" from the 36th to the 40th minute, in it expects such a goal might be scored.
You think the first goal will come early, so you make a "sell" bet at, say, pounds 10 a minute. If the first goal is scored in the 10th minute you win (36-10) x pounds 10 = pounds 260. If there are no goals by the 37th minute, however, you are nursing a pounds 10 loss. If there is a late goal you are in trouble, and if the match ends nil-all you are in very deep doo-doo: you have lost pounds 540.
Conversely if you took out a "buy" bet you would make (90-40) x pounds 10 = pounds 500 from a nil-all draw. But a first- minute goal would cost you pounds 390.