by Rob Davies, The Guardian
On any given Saturday, Rory would spend several hours glued to a screen flickering with hundreds of football and horse racing bets placed by customers of the Irish bookmaker Paddy Power.
One of multiple insiders from firms including Paddy Power Betfair, Ladbrokes and William Hill who spoke on condition of anonymity, Rory was part of an obscure corner of the gambling industry that exists to maximise profits by clamping down on successful punters.
“The volume of customers they had, you could afford to get rid of anyone you thought wasn’t going to be profitable,” he said.
Punters know the house usually wins, but most have no idea that bookies sharpen their edge via something called “stake factoring”, the process by which winning customers are dialled down, while losers are allowed to bet more.
It works like this: when a customer opens an account, they might be given a stake factor of 1, meaning they can bet 100% of the normal maximum stake, for example £500.
“As soon as people start winning or losing, that gets adjusted,” said Cameron, formerly of William Hill. “It starts with 50% and if they keep doing it [beating the bookie], it’ll keep going down. At William Hill it went down to 25% to 10% and eventually down to 1%.”
Sometimes, such decisions are determined by other factors.
“We’d make judgments based on what job you do, who you’re friends with on Facebook,” said Steve, who works as an odds trader at a well-known betting website.
“It’s particularly true of any account with a female name,” he said, explaining this was often someone who had had their stake factor reduced on their own account and was posing as a spouse, sister or friend.
A manual, handed out to employees of Paddy Power within the past six years and seen by the Guardian, offers further insight.
It advises staff to restrict customers who “look like bad business” and to increase stake factors for “all customers that are regularly hitting their max [maximum bet]”. Those customers with a stake factor above 1 can wager more than 100% of the normal maximum figure.
The guide also suggests traits that supposedly indicate someone is likely to be bad business, including “eastern European customers”, apparently based on concerns about locations in which past suspicious betting patterns have been identified.
For the bookies, stake factoring is seen as a legitimate way of levelling the pitch against punters who they argue are resorting to unfair methods.
One former trader at William Hill explained how the firm would be targeted by “latency cheats”, people who exploit the small delay between events at a match and the bookies’ TV pictures, either by accessing a faster feed or attending the event.
“You see a bet come through from a brand-new account on a certain cricketer to score less than 25 runs, and they’ve put on as much as they can. You look up at the TV and he’s out that ball.”
Rest is here…
