Leicester City triumph to trigger ‘recalibration’ on long shot pricing

premier-league-trophyThe news media is awash at how much Leicester City’s incredible Premier League title triumph is going to cost the betting industry, but we may not see the true impact of the unlikely win until next season.

While the estimates are that The Foxes’ 5,000-1 victory has cost the betting industry between £25m – £50m, the truth is that the industry has recouped this money across a season where the big teams failed to deliver and the lack of weekends when 8 out of 10 favourites won in the Premier League which would normally cost upwards of £20m as everyone’s accumulators came in.

What is groundbreaking is that the Premier League title triumph is the first 5,000/1 single ever landed in bookmaking history, according to William Hill, whose previous longest-odds payouts were at 2,500/1 to grandfather Pete Edwards who won £125,000 by backing grandson Harry Wilson to play football for Wales. Before that in 1969 David Threlfall won £10,000 with a £10 bet that man would walk on the moon before 1970.

Hill’s spokesman Graham Sharpe commented: “Leicester’s 5,000/1 victory has smashed all bookmaking records and in the process cost us a £2.2m loss – our worst individual day’s result on a single sport since Frankie Dettori rode all seven winners at Ascot in September 1996 and cost us over £8m and the industry £50m.”

William Hill took just 25 bets at 5000/1 – Thirteen were in the shops and twelve online.

David Williams at Ladbrokes suggested that the betting industry would have to revisit how it deals with long shots after this season. He commented: “The first rule of bookmaking is ‘never say never’, and we broke that rule last August. Leicester winning the title was in the realms of the ridiculous, and it has cost us the biggest anti-post payout in our 130-year history.

“For a 5,000-1 shot to emerge as a winner is absolutely off the charts in betting terms. The longest odds on a Grand National winner were 100-1, England were 250-1 before they won the Ashes in 1981, and Buster Douglas beat Mike Tyson as a 50-1 shot in 1990, so nothing else comes close.

“It means we will have to completely recalibrate how we approach betting on outsiders.”

Indeed back in August Paddy Power said there was more chance of watching Dean Gaffney pick up an Oscar for Best Actor and Elvis Presley to be found alive and well, than Leicester winning the league.

Part of the expense for bookmakers though was the fact that the market didn’t react as quickly to what was happening on the pitch. The betting damage started to be done with online bookmaker Betway when it laid a number of bets at 1000/1 after the Foxes won away at West Brom on 31 October. Even when two points clear of Arsenal at the top of the table at Christmas they were an underestimated 10/1 shot and Betway has paid a painful price.

Alan Alger, Betway
Alan Alger, Betway

Betway’s Alan Alger said: “Leicester winning the Premier League is the most remarkable story in the history of the competition, if not football as a whole. This most unlikely triumph will not be forgotten by both fans and bookmakers. For fans it’s jaw-dropping elation, while for us bookies it’s enormously expensive.”

Even William Hill had the Foxes at 25/1 at the turn of the year. They own had Leicester at odds on favourites a month ago as the expected surge from Arsenal and Manchester City failed to materialise.

Bookies are still not convinced at the longevity of Leicester City though. Most have shorter odds for them to be relegated than to retain the title. Some are also putting their neck on the line for a second time, with TonyBet.com offering 200/1 for a limited time for a £10 stake.

Tonybet.com UK spokesman Warren Lush explained: “It is 200/1 for a repeat title win in 2016/2017. In our eyes lightning cannot strike twice and we are confident this season was just a freak event. The Leicester owners have money and may be able to keep hold of their players but we really cannot see them doing it again. Might they be another Blackburn?

“We are putting it all on the line – by doing this alone we expect to run up the chance of a possible pay-out of over £5,000,000 but in Guardiola, Klopp, Pochettino, Van Gaal, Wenger and maybe Mourinho we trust! We have looked around at other bookmakers and they offer in the region of 40/1 for Leicester to win the title and 100/1 they win next season’s Champions League. May madness is upon us.”

Another implication for the betting industry is that partnerships may become more expensive. At last month’s Betting on Football Conference, Head of New Business at Leicester City Mark Davies suggested that the rise of Leicester could actually shape the future of sponsorship in the Premier League, with the supposedly lesser teams able to create better partnership deals. He also referenced Leicester City’s inflated Facebook following, from 500,000 to 3.5 million followers, as an example of their extended reach in light of the success.

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