Pool betting is one of the oldest forms of wagering. But in the UK in particular, the traditional pools sector has faced some trouble with staying relevant to a new instant gratification seeking generation.
Having assumed stewardship of the Tote in 2019, bringing Betfred’s eight years of ownership to an end, the UK Tote Group has faced some prominent challenges. But as the company’s B2C and Liquidity Director Jamie Hart explained, it has met these hurdles head on.
One challenge, three responses
In Hart’s view, the UK Tote has attempted to address the difficulties posed by the dominance of established fixed odds/starting price-based bookmakers, as well as the demands of an emerging generation of bettors, in three key ways.
Perhaps of greatest significance in the Tote’s mission to take on the starting price/fixed odds bookmakers is Tote Guarantee, which ensures the Tote customer is always paid at the best of both worlds – the Tote Win price or the SP, whichever is better.
“The biggest challenge we had was making the Tote relevant to punters and relevant in the punters’ portfolio, we had to make sure the Tote account was a central part of a customer’s portfolio,” Hart explained.
“We started by solving the problem that the Tote traditionally didn’t always offer the best value. Introducing the Tote Guarantee against SP was probably the most important thing right at the start, so that nobody has a bad experience that would put them off betting with the Tote.”
Since launching in November 2021,Tote Guarantee has proven to be a success for the group, demonstrated by the spend per head on Win betting options increasing by 50%.
Hart added that the Tote has sought to add value to its product in both a monetary way, but also with regards to the overall experience.
On the monetary side, the Tote+ (Tote Plus) offering has been combined with the guarantee to boost customers’ winnings by 10% for those betting directly with the Tote, to ensures that the Tote customer is always paid at the best of both worlds – the Tote Win price or the SP, whichever is better.
“We also wanted to have a better experience for the Tote bet themselves,” Hart continued. “With a Win bet you have to be competitive, and with Tote Guarantee we ensure this, while Tote+ ensures if you come directly to the Tote with any of our products you’ll get paid more than having the same bet anywhere else.”
From a product perspective, the Placepot remains ‘by far the most popular bet’ for UK Tote customers, and is what the group sells primarily through its bookmaker partners. But Hart emphasised that the firm wanted to ensure customers ‘get the most out of their placepot’.
“With the multileg bets (like Placepots, Jackpots and Scoop6), it’s important we make the most of the “ride” throughout the bet. How many people are left in? What’s the Placepot going to pay if the favourite makes the frame in the last race? Where do I stand?
“Our bets are more than the punter trying to beat the house – you’re in the game with everybody else. It’s where a unique opinion can be your biggest asset.”
On a wider international level, Hart pointed to the launch of the World Pool, the global commingling racing community established by the Hong Kong Jockey Club (HJKC) and with World Pool fixtures authorised by the Hong Kong government, as another key achievement for tote betting.
In particular, via the World Pool, the Tote has introduced its customers to a wider variety of highly competitive ‘exotic’ bet types, including Swingers, Quinellas, Trifectas etc showcased across the 22 World Pool days in the UK, Ireland, Dubai and South Africa in 2022.
“If you look at coverage of horse racing in Hong Kong, Australia, the US – all the places dominated by parimutuel betting – they talk about Trifectas, Exactass etc, and we never do that in the UK.”
An additional area of innovation which has proven popular is the Tote’s Betting Tournaments. First introduced at Cheltenham and Aintree, the products were rolled out across all 17 UK and Irish World Pool days this year with a total offer of over £250,000 in prizes
“Without us trying, players saw people winning big for small stakes in the tournaments and were being introduced to the more exotic bets in that way, which has always been a problem in the UK when you look at media coverage of racing,” Hart detailed.
A generational divide
The Tote has also found itself with two prominent gaps to cross in its commercial journey in recent years, Hart noted; these being the generation gap between young and older bettors, and the ‘knowledge gap’ that exists because of this.
Hart observed that there are ‘two very distinct generations in their view of the tote’, continuing: “Some in the older generation had written off the Tote because of the value point, and so we had to sort out the value question for them.
“Then there is the younger generation who hadn’t even heard of the Tote. We had to introduce the younger guys to the Tote. We’ve been trying to introduce them to the benefit of the tote through our tournaments, we want people to experience it.”
He added that younger bettors are ‘not learning their trade’ in a high street, bricks-and-mortar environment as previous generations did. This, he stated, is the ‘major generational divide’ facing the sector.
So how has the Tote sought to engage with and appeal to this younger generation? Finding itself competing with a huge range of established SP operators in the UK, the Tote has brought itself into the digital age through the adoption of a new app and website.
However, the organisation has gone beyond this – looking at international examples, Hart emphasised the UK Tote’s desire to adopt a betting system which customers can easily understand and enjoy, placing a small, simple bet with the chance of a much larger pay-off.
This also has an advantage with regards to potential changes in regulation. Public and political pressure has been mounting on the betting industry of late, and so a return to small stake betting is in many operators’ favour.
Hart added: “Bookmakers are coming back to the ‘small stakes-win big’ model because of the affordability and compliance changes that are coming up, and that is the Tote’s absolute sweet spot, and that is making us more relevant.
“We just need to make it easier for people to understand and play. In 2023 we will be introducing what the Australian’s call ‘flexi-betting’.
“This is where instead of putting a pound Trifecta on runners two, four, seven, eight and twelve and being told you owe £60, you go up, tell them your budget and your choices, place the exact amount you wanted to bet and get paid accordingly.”
Adapting and innovating
As well as examining the international opportunities created by the World Pool, the UK Tote has looked to other segments of sports entertainment on how to connect its product to a new generation of punters.
“One of the biggest innovations we’re launching and that’s immediately seen really good traction with early players is Tote Fantasy, a daily fantasy racing product,” he continued.
“It’s very pick up and play, we’ve done a lot of market research and customer research, and now have something that is very easy to understand and built from an ecommerce point of view, rather than from a betting point of view.
“That will be the next big push, to get people playing this simple game. All daily fantasy sports are pools, as everyone’s getting points, climbing leaderboards and being paid based on how well they’ve done compared to the crowd. It’s a perfect pool product.
“During the soft launch, people are coming back to it day after day. We are experiencing better retention on that than we are with our main horse racing bets, so it’s a top candidate for more focussed investment.
“We’ll get into the daily fantasy realm more, because ultimately we’re a pool and those daily fantasy operators are running something that is far more user friendly as they don’t talk about dividends and units, they just tell people what they need to know to win.”
There is one hurdle which remains with regards to the adoption of the new bet types which shine through the World Pool, that being media exposure.
Operators in Hong Kong and Australia have a distinct advantage in this regard, due to maintaining their own media holdings – the HKJC owns its own coverage, and Tabcorp notably has its Sky Racing World holding – in the UK this is far from the case.
“You do need media support,” Hart continued. “One of the reasons they get far more engagement with the exotic bets is the fact the HKJC owns its own coverage, Tabcorp owns Sky – when they come up with a new bet, they can promote it cost effectively as they own the media channel.
“It’s a very tough ask to get a new bet off the ground in the UK, because you have to pay to educate your entire market, and to launch a new concept in racing based on pure advertising alone with little media support is very hard.”
Where next for the Tote?
Despite the UK media challenge, Hart maintained faith in the Tote and the World Pool’s ability to continue acquiring and retaining customers, pointing again to the social aspect of the offering.
Notably, the Tote’s betting lead made a comparison to the difference between poker and slot machines – the Tote is like the former, he argued, where you are playing against people not the machine.
“Where fixed odds exist you need to give customers what they already want, but in other areas you need to be clever, which you can be with the Tote.
“Horse racing is still the best betting event and product, there is nothing better than being in that moment, fighting out the finish, and we don’t want to lose that.
“The biggest advantage is you’re allowed to win without being restricted, and it’s also quite psychological – you’re dealing with people and going up against people.”
The figures suggest pool betting is again taking hold in the UK and Ireland, with the pool growing 36% over the last year and the Tote seeing a 44% growth in active customers. On a global level, it is the prominent form of horse racing wagering in markets such as the US, Asia and Australia.
In Hong Kong, World Pool days are sanctioned by the government, so the territory’s authorities hold the ultimate decision on whether or not a new country can be allocated a World Pool day.
As it stands, 17 of the 22 World Pool Days take place in the UK and Ireland, which as Hart noted is a testament to the continuing popularity of our sport around the world’.
“Every racing jurisdiction in the world wants a World Pool Day, because of the financial benefit and greater exposure it brings to your biggest races,” Hart added.
Success for the World Pool has been ‘quite across the board’, he continued, but also acknowledging that to guarantee liquidity, World Pool races need to have at least 7+ runners to make all bet types viable. Hart explained that this has been another challenge that the Tote and partners, including racecourses, are working on together.
‘The biggest races (by volume) aren’t always the ones you would expect. Often it ramps up as the day goes on, because people tend to reinvest winnings and are more engaged by the end.
“The number of runners is very important – we can only run all of the pools on races with seven or more runners. Making sure we had seven runners in every race was a challenge, and some racecourses did better than others because of this.”
…and where next for racing?
As previously outlined, racing is intrinsically linked with betting, and offers a fast paced and engaging customer experience to customers, which Hart and the Tote believe is unrivalled across the wider sports landscape.
Closing the discussion, Hart remarked that supporting the sport of horse racing is one of the Tote’s primary objectives as an organisation, firstly via the same levy payments as other operators.
As well as a financial agreement which sees over £50m injected into racecourses over the first seven years of the UK Tote Group’s stewardship of the Tote, and with World Pool’s volumes increasing 44% to £521m in 2022 (2021: £363m), this funding has a solid fiscal backing.
World Pool is also giving back to racing, Hart emphasised, with funding ranging between £500,000 to £1m for each race day. This is a cash injection which has been lauded by a range of key horse racing figures.
This has included HKJC CEO Winfried Engelbrecht-Bresges, Jockey Club CEO Nevin Truesdale, York Racecourse Chief Executive William Darby and Goodwood Racecourse Managing Director Adam Waterworth.
With these stakeholders describing the World Pool as ‘true value’ for customers and racing, a ‘brilliant new funding opportunity’, an important ‘seal of approval’ and a ‘wonderful initiative’ for the sport, it is clear that the innovations described by Hart are being well received as racing continues to regain its footing after the financial blow of the pandemic.