The world of betting is one that has long been filled with competition, with more and more bookmakers opening from the moment that they were allowed to take money for bets. When bookies could only operate on racecourses, this tended to be good news for punters because they all had to keep their margins low in order to bring in as many bettors as possible in comparison to their competitors.
The move to most bookmakers now operating online should theoretically encourage the same thing, given that new companies are springing up all the time. The problem is that many of the sites that are arriving are just white label offerings, meaning that they’re all effectively clones of each other and don’t offer anything new. Competition isn’t really happening in the way that some people think, which is detrimental to punters.
More Choice For Consumers
The one thing that can’t be argued with in principle is the fact that the move online for the betting industry has resulted in more choice for bettors. There are tens if not hundreds of betting sites, meaning that punters are spoilt for choice when it comes to figuring out which site is the one that they want to use. The sheer number of sites has also driven down the costs for operators, which should theoretically be passed onto the bettors.
If you want to place a bet on a major sporting even and have the inclination to do so, you can scour through countless different betting sites to see which ones are offering you the best odds. Not only that, but there is a cottage industry of sites that promise they’ll check the best odds for you, meaning that you don’t even need to search from site to site. In that sense, it truly does feel like a golden age for punters.
There’s Little Competition
Whilst it might seem as if there is a huge amount of choice for people looking to place a bet, the reality is that many of the biggest bookies have merged together. A quick look at some of the biggest names in the industry will show that they aren’t actually separate entities, with the following being just a small taste of the bookmakers that are linked together thanks to mergers and parent companies:
- Paddy Power – Betfair – Sky Bet (Flutter Entertainment / Stars Group)
- Ladbrokes – Coral (Entain)
- Betbright – 888 (888 Holdings)
- William Hill – Mr Green (William Hill Group)
- Unibet – 32Red (Kindred Group)
The industry is also changing all the time, so companies that are currently operating independently will doubtless soon be taken over by a bigger entity. The big names in the world of betting know that they’re mainly competing against each other, with smaller businesses unable to be truly competitive with them and maintain the margin that they need to keep their heads above water.
White Labels Don’t Help
Many people would be forgiven for thinking that there’s a wealth of choice when it comes to betting sites, but the truth is somewhat different. Countless different online bookmakers aren’t actually independent companies at all, but instead are white label operations that are all run by the same company. This means that if you were to search them all for odds on a given event, they’d all be offering the same thing.
White labels have become somewhat controversial of late, with the United Kingdom Gambling Commission feeling the need to remind their operators that they still have to obey the compliance rules and regulations. From the point of view of bettors, they don’t offer the level of competition to the rest of the industry that one might hope, instead merely serving as noise that confuses things and offers a false sense of value.
Monopolies Decrease Competition
The reality of the betting industry is that the various monopolies that have been forming for years are resulting in less competition, not more. Betfair isn’t competing against Paddy Power, nor is Coral trying to outperform Ladbrokes. Instead, their parent companies are looking to ensure that they work together to price other companies out of the market and that they’re able to dominate it even more.
The one exception to this is the Betfair exchange market, which operates differently to fixed odds sportsbooks and allows punters to bet against each other, finding their own pathway to odds that the market agrees with. Even so, because this is an entirely different way of betting, traditional bookmakers don’t feel the need to compete with the betting exchanges so it doesn’t really count as competition.
Is The Model Broken?
In simple terms, you don’t really get a more capitalist venture than gambling. From the point of view of the companies operating the system, it’s easy to understand why they’re quite happy with the status quo. As far as punters are concerned, though, things aren’t really what they cracked up to be. More and more money is being poured into the betting market, but the value available for those that engage in gambling is shrinking all the time.
There is some good news for bettors, with the biggest companies still competing against one another. They need to find new and innovative ways to draw in new customers and to keep the ones that they already have, so offers and promotions remain common. Canny bettors can look to take advantage of them on a regular basis, which is why many people have betting accounts with several companies across the industry.
There’s certainly an argument that the model is broken when it comes to the betting industry, but the problem comes when trying to think of a way to fix it. It is not in the interests of the biggest companies to explore ways to make things more competitive, whilst many critics of the gambling world feel that the industry regulator lacks teeth. If there isn’t a collective will to change anything then it’s extremely unlikely that there will be a way to do it. Instead, we’re likely to see more and more companies merge and fewer and fewer advantages handed to the customers.