Racing: Advance of the High Street bookie

The refusal to allow Ladbrokes to keep Coral is another upheaval in betting's colourful history.

THE STORY of off-course betting in Britain is a tale of crime, enterprise, wealth and hypocrisy, and anyone with 40 years' of punting experience will have experienced it all. From the days of illegal cash betting shops, raided once a year to keep up appearances, through an explosion of small operators in the 1960s, to the market of today in which a handful of brand names dominate, the betting industry has matured at an astonishing speed.

Ladbrokes' attempt to take over the Coral chain was blocked on Wednesday, but they remain the major players in the off-course market. Things were rather different in 1886, when a small credit bookmaking firm decided to name itself after the Warwickshire village, Ladbroke, where it was founded. Forty years earlier, cash betting shops had been operating freely and legally throughout the country, if only because no law had ever been framed to ban them. In 1853, though, after several bookmakers went bankrupt and welshed on their customers, an Act of Parliament closed them all down.

Or rather, it drove betting shops underground, where they were to remain for the next 108 years. Over the course of a century, the bookies' runner, who took bets on street corners and at the factory gates on behalf of the local layer, became a familiar figure. There was even specialist technology to ensure the security of this multi-million pound illegal industry, in the form of the clock bag, which locked securely and recorded the time when it was shut. Betting "after time" was thus almost impossible.

If the betting industry at the time of Ladbrokes' foundation was different, then so too was the firm itself. Choosy to the point of snobbery about who it would accept as a client, Ladbrokes considered itself the bookmaker to the gentry, whether they chose to bet on credit away from the course - which, unlike cash betting, was perfectly legal - or with Ladbrokes' representative at the track. It is an irony of Ladbrokes' current domination of off-course betting that the bookmaking firm which once dealt only with aristocrats now takes more money from the common herd than any other.

The firm's rise to pre-eminence effectively began in the early 1960s, when two important facts began to dawn on the authorities. First, the law against off-course cash betting was doing nothing to curb the gambling instincts of the general public. Second, when an industry is legal and regulated, it can also be taxed.

Betting shops were finally legalised on 1 May 1961, although life was still not easy for either bookie or punter. Within a couple of years, the number of betting shops in Britain had risen to almost 20,000, as previously illicit bookies took out permits - famously described by John Banks, one of their number, as "a licence to print money" - and fought for a share of the market. Punters, meanwhile, were denied even the most basic of facilities. Legal it might be, but betting was still considered a vice. The gambling urge could now be serviced, it must never be encouraged. Only in 1986, a generation later, would the law be relaxed to allow betting shops to install toilets, coffee machines and televisions showing live racing.

Once legal betting shops had arrived, betting tax was only a matter of time. Punters have Jim Callaghan to thank for the deductions which make it all but impossible to beat the bookie, the then Chancellor having introduced the tax - at a rate of 2.5 per cent - in 1966. By now, the number of shops had already started to fall - there are less than 9,000 today - and after aggressive expansion programmes, the Big Four brands, Ladbrokes, William Hill, Coral and Mecca, were already starting to become familiar on most High Streets.

These days it is the Big Two, Ladbrokes and William Hill, although the latter was a relative latecomer to the off-course market. The original William Hill was the most famous on-course bookmaker of his generation, prepared to lay huge bets and take the consequences if his judgement failed him. It rarely did, but the same was not true away from the track. Hill had a thriving off-course business - with both legitimate credit clients and illegal cash offices - but he was slow to move into legal betting shops. Hill had - by bookmakers' standards, anyway - a well-developed social conscience, and was heard to describe the new establishments as "a cancer on society".

Eventually, though, Hill could resist no longer, and he bought his first betting shops in 1966. Hill died in 1971, the same year that his business was sold to the Sears group, but its expansion continued. Ladbrokes, too, was busily buying its way to the forefront of the market, and few bookmakers were safe from the predatory urges of the major players. Even William Hill succumbed, being bought by Grand Metropolitan in 1988 and merged with Mecca, which Grand Met already owned. Hill's name was retained, perhaps to give a human touch to what was a huge corporate machine.

By now, the market had started to coalesce into its present form, in which punters often feel free to bet with anyone they please, so long as it is either Ladbrokes, Hills or Coral. Nationally, there are just seven firms with more than 100 betting shops, but between them they account for 60 per cent of off-course outlets.

Yet if you are prepared to look hard enough, away from the plush new Big Three betting shops in prime High Street sites, it is still possible to find small, independent bookmakers in back alleys or on half-deserted local parades. They are the true descendants of the pre-War betting underground, with its runners and clock-bags and bribes for the local constable. It might be wise to visit one before it is too late.

THE CHANGING FACE OF OFF-COURSE BETTING

1853

Betting and Gaming Act makes off-course cash betting illegal. Credit accounts operated by post or, later, telephone are still permitted. Illicit betting shops proliferate.

1928

Horserace Totalisator Board (the Tote) is established by Parliament to control pool betting (like the football pools, dividends are declared after the race according to the number of winning tickets).

1961

Off-course cash betting legalised. A short-lived campaign to give the Tote an off-course monopoly, such as exists in France and Australia, fails when the Jockey Club show little interest in the idea.

1966

Cyril Stein becomes chairman of Ladbrokes, and begins an aggressive programme of acquisitions. Betting tax introduced at a rate of two and a half per cent. The current level of deductions payable on off-course bets, made up of tax and a little something for the bookie, is nine per cent.

1971

William Hill Organisation sold to Sears Group, a trend which is to continue with the purchase of Coral, by Bass, and Mecca, by Grand Metropolitan.

1986

Law relaxed to allow basic amenities, including toilets, in betting shops.

1987

Satellite Information Services (SIS) starts to broadcast live racing to Britain's betting shops. Within three years, its coverage reaches all but a handful of outlets.

1988

The Big Four becomes the Big Three when Mecca buys Hills, but adopts the latter's name for its 1,600-shop chain.

1998

Ladbrokes ordered to sell off Coral , purchased for pounds 375m on 1 January. Its eventual purchaser will automatically become the third major player in the market.

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