This may be a little deep, but, its a topic that needs debate.
The present UK horse-racing markets, are attended by .. an average, of say 40 licenced bookmakers per-day, who make a market for each race, and the Starting Price for each race, is derived from these (unpaid) professionals.
These bookmakers, all have access to the exchange models, which bet to 101% .. virtually an efficient market, but, have far greater expenses than the Internet, so, not unfairly, they have to build in margin.
Just how much margin, is the rub.
If they bet, for, say 2% per runner, in a 10 horse race, they make take money, but .. informed people, with access to mobile betting platforms, may decide, not to bet in cash on the course, but via their mobile, into an exchange.
If they bet for 1% per runner, they are probably likely to operate at a loss .. not good .. but, would increase the money being attracted to the racecourse, and eventually, will strengthen the rings.
The other debate, is how much money, the on-course ring, attracts from the High Street firms. I am led to believe, these firms, have all but stopped hedging back into the rings .. effectively saying, they don't care, what SP, each race is returned to.
Either, this is because the amount of money traded in betting shops these days, is in such decline, it doesn't matter, or, there are more efficient ways of dealing with it.
So, if you were an on-course bookmaker, what margin, would you put on your board .. ?
Its tricky, and a lot depends, on whether you are thinking short-term, or long-term.
I am a firm believer, rings should bet to an average 10-12% over-round .. but, understand, this is not realistic, an a cold, poorly attended day.
At some stage, racecourses may pay bookmakers to attend, or greatly reduce the costs for standing, .. or, more likely, they will do nothing, believing all bookies make money.
On-course bookies, do not operate cartels, and .. it is a free market, which, often leads to disputes. There is much jealousy in the rings .. its .. easy to take money, in good locations on the race-course, but, its almost impossible, in bad locations .. so, what do you do ?
Good location bookies, will want to bet to a good margin, making profits. Bad locations, wont care, as they take little money, at good or bad profit margins, so, .. normally, either bet to absurd margins .. good or bad.
This gives the rings a bad name .. the public often gets ripped off, knowingly or not ..
(( As an aside, its unreal, how ill-informed some people are .. obviously, they don't care .. betting for v small amounts .. but, often, have taken sizable bets, when, the bookmaker next door .. 2 yards away, is offering a better price))
The whole debate, is a minefield, with each case, aggressively argued by each vested interest.
At a later stage, I will return to this topic, to look at each area, in more detail.