Home alone: the pain and pleasure of a professional punter

Strange how gambling of late has come to represent the darkest niche of depravity. Unless, of course, it involves punters contributing to the National Lottery and, in the event of the London 2012 bid succeeding, helping to bankroll an Olympic Games.

Perceptions of seedy, dubiously backed dens of iniquity still tend to trouble some, when the reality is that many hundreds of thousands, from the comfort of their homes or offices, throng the cybershops. And once you're on the net, you become less a gambler, more a trader, as my colleague Iain Fletcher explains in elaborate detail in his entertaining new book* on the gambling revolution produced by the genesis of betting exchanges.

In doing so, he demystifies this phenomenon, explaining how expressions such as "lays", "exposure" and "positions" are not ones necessarily filched from a porn director's vocabulary. The dominant force in a market whose numbers were reduced last week by the collapse of Sporting Options is Betfair, the brainchild of Andrew Black, a GCHQ worker based in Cheltenham. With too much spare time on his hands, the devil he created was a device which enables the customer both to back and lay (like a bookmaker) events online with a market of "matched" bets, principally on sport, that resembles the stock market.

From the start, Betfair has been superbly marketed, led by Mark Davies (son of commentator Barry), and the company have circled the covered wagons effectively to protect themselves from attack, both from potential rivals and vested interests, notably bookmakers.

To deflect one particular criticism - that it is making huge sums at the expense of horseracing - Betfair, though a private company, have revealed their first financial figures, a healthy but hardly excessive operating profit of £11.9 million for 2003-04, their fourth year of trading (after payment of £9.3m tax and £3.9m to the Levy Board). To counter another objection, essentially that the industry is still young and hence unstable, Betfair, in a move that was not entirely altruistic, also provided a rescue package for Sporting Options clients.

Fletcher, who describes one year as a "pro" on the exchanges in search of a profit and who works them with the mathematic agility of the city broker he once was, admits to an almost masochistic pleasure, describing his obsession as a combination of "fear and promise". He talks of loving "the gnawing at the stomach, the hollow feeling that borders on nausea. I love the anticipation and the angst".

From my own perspective, that of an occasional "player" who over four years has invested relatively small stakes and has remained comfortably ahead, that appears somewhat dangerous territory to occupy. I believe that you should only bet up to an amount about which you can shrug indifferently if you lose.

The eternal quest, for all of us, is value. Fletcher believed he had discovered it the day he laid Tiger Woods for the Masters. It was "a very aggressive lay of probably the most famous sportsman on the planet". If Woods lost, the profit would be £475 after commission, but at odds of 5.5-1, his exposure (the amount he would lose if Woods won) would be £2,250. "Sometimes there is a price that just seems ridiculous, and I thought this was one."

However, that was far from his only bet on this year's Masters. During the tournament, he also backed Woods; he laid Ernie Els, then backed him; and, most significantly, he laid Phil Mickelson, and laid him again, then belatedly backed him to win his first major. The American obliged with that 12-foot putt which defied the detractors who regarded him as a "bottler". "Bloody great viewing, and made even more enjoyable by the £342 I won instead of the £2,670 loss I could have suffered if I had carried out my full plan of laying him [Mickelson] to the bitter end," concludes Fletcher.

The best advice is one with which we both concur: betting against England, or any other of the home nations, isn't unpatriotic. It's common sense, at times. Certainly, laying Sven Goran Eriksson's team in friendlies can prove very lucrative.

© Nick Townsend

(This article appeared in The Independent, Sunday November 21st 2004)