Who says the Bookie doesn't lose.

[seafoid]

The fallout from the collapse of Fianna Fáil's neoliberal economic model is going to cause savage hardship in 2011.

Don't overestimate them. There was no model, no philosophy, no grand scheme, no matter how badly designed. There was a seat-of-the-pants do what it takes to win the next election off the cuff system of governance, with a nod and a wink to those of preferred status. To say that there was any particular line of thinking conjured up by Charlie McCreevy the free marketeer and Bertie Ahern the Socialist (to give them their own titles - not the ones I'd give them) is to give them a credit they don't deserve.

It was ideological . McCreevy is a neoliberal. So is Bertie. Cowen too.
They followed the ideology to the bitter end. The country was bet on housing and the bet lost. 

[seafoid]

According to the Irish Times the margins were low even in the good years. €4m operating profit on a turnover of €180m.

http://www.irishtimes.com/newspaper/breaking/2011/0104/breaking31.html

[Declan]

Never nice to see a business fail

[Lone Shark]

According to the Irish Times the margins were low even in the good years. €4m operating profit on a turnover of €180m.

http://www.irishtimes.com/newspaper/breaking/2011/0104/breaking31.html

That wouldn't be low for betting shops.

Unless you're operating in a vacuum and you don't have to do things such as guaranteeing early prices, offer money back races, special offers and the like, then you're very happy to take 8% gross profit. To dial it down to your typical shop that would be breaking even now, here's a guesstimate of their weekly numbers:

Turnover 60,000 per week (on average 3000 bets)
GP 4,800

Betting Tax 600
Wages: 2300 (3 staff members getting 1600 between them into their hand, the rest to allow for Employers PRSI, PAYE, PRSI, levies etc
Rent: 400 (based on a good sized premises in a small provincial town)
Newspapers, Tea, Coffee, Biscuits etc: 100
Electricity 150
SIS/Sky/Racing Channel: 600
Till System (A-Bet-A or Alphameric): 300
Rates 50
Phone/Internet: 100
Sundries - Repairs, free bets, bank fees, accountants etc: 100

So as you can see, off 8% gross margin, there's little or nothing left - €100 left over by my sums - and note that's with no debt and no accounting cost incurred for a raceroom or district manager. So even if we say 10% gross, which would be 1300 profit after all that, you're still only at around 2% margin.

Any company making 2% NOT INCLUDING debt charges at the moment is singing for joy - things are that bleak out there.

[Rossie11]

SIS/Sky/Racing Channel: 600

Thats some bill for TV!!! Whats that about a tenner an hour for normal opening hours.

[Lone Shark]

Phone & internet - 100 a week?

Sorry, my mistake - that one is per month. All the rest are per week though.

SIS/Sky/Racing Channel: 600

Thats some bill for TV!!! Whats that about a tenner an hour for normal opening hours.

Probably a bit less per hour over the course of the year. Winter opening hours would be 7-8 per day plus late opening on Friday night for Dundalk, summer opening is 11 hours a day every day bar Sunday.

This is a huge additional cost on recent years, one that an awful lot of bookies just can't handle. Also, don't forget here that's just for the pictures. There's nothing there that pays for the variety of large screen TV's that a shop is expected to have.

[Rossie11]

Safe to say Sky are operating on alot more than 8% margin so!!!

[seafoid]

According to the Irish Times the margins were low even in the good years. €4m operating profit on a turnover of €180m.

http://www.irishtimes.com/newspaper/breaking/2011/0104/breaking31.html

That wouldn't be low for betting shops.

Unless you're operating in a vacuum and you don't have to do things such as guaranteeing early prices, offer money back races, special offers and the like, then you're very happy to take 8% gross profit. To dial it down to your typical shop that would be breaking even now, here's a guesstimate of their weekly numbers:

Turnover 60,000 per week (on average 3000 bets)
GP 4,800

Betting Tax 600
Wages: 2300 (3 staff members getting 1600 between them into their hand, the rest to allow for Employers PRSI, PAYE, PRSI, levies etc
Rent: 400 (based on a good sized premises in a small provincial town)
Newspapers, Tea, Coffee, Biscuits etc: 100
Electricity 150
SIS/Sky/Racing Channel: 600
Till System (A-Bet-A or Alphameric): 300
Rates 50
Phone/Internet: 100
Sundries - Repairs, free bets, bank fees, accountants etc: 100

So as you can see, off 8% gross margin, there's little or nothing left - €100 left over by my sums - and note that's with no debt and no accounting cost incurred for a raceroom or district manager. So even if we say 10% gross, which would be 1300 profit after all that, you're still only at around 2% margin.

Any company making 2% NOT INCLUDING debt charges at the moment is singing for joy - things are that bleak out there.

if there is so much competition in the bookmaking business as evidenced by those low margins how do Sky get away with that level of gouging on the tv costs? 

[Donnellys Hollow]

According to the Irish Times the margins were low even in the good years. €4m operating profit on a turnover of €180m.

http://www.irishtimes.com/newspaper/breaking/2011/0104/breaking31.html

That wouldn't be low for betting shops.

Unless you're operating in a vacuum and you don't have to do things such as guaranteeing early prices, offer money back races, special offers and the like, then you're very happy to take 8% gross profit. To dial it down to your typical shop that would be breaking even now, here's a guesstimate of their weekly numbers:

Turnover 60,000 per week (on average 3000 bets)
GP 4,800

Betting Tax 600
Wages: 2300 (3 staff members getting 1600 between them into their hand, the rest to allow for Employers PRSI, PAYE, PRSI, levies etc
Rent: 400 (based on a good sized premises in a small provincial town)
Newspapers, Tea, Coffee, Biscuits etc: 100
Electricity 150
SIS/Sky/Racing Channel: 600
Till System (A-Bet-A or Alphameric): 300
Rates 50
Phone/Internet: 100
Sundries - Repairs, free bets, bank fees, accountants etc: 100

So as you can see, off 8% gross margin, there's little or nothing left - €100 left over by my sums - and note that's with no debt and no accounting cost incurred for a raceroom or district manager. So even if we say 10% gross, which would be 1300 profit after all that, you're still only at around 2% margin.

Any company making 2% NOT INCLUDING debt charges at the moment is singing for joy - things are that bleak out there.

if there is so much competition in the bookmaking business as evidenced by those low margins how do Sky get away with that level of gouging on the tv costs?

I'd imagine that most of that figure is made up of the SIS and Turf TV subscriptions.

[Lone Shark]

if there is so much competition in the bookmaking business as evidenced by those low margins how do Sky get away with that level of gouging on the tv costs?

Safe to say Sky are operating on alot more than 8% margin so!!!

Sky is the smallest part of that. That would be roughly 500 a month to Sky which is about the same as their pub rates, about the same amount again to the Turf TV or maybe a bit more, and the guts of 1500 a month to SIS for their full service, which admittedly includes the feed of prices and SP's. I accept that in one sense that it's a separate cost, but for the purposes of this summary I thought I'd include them all together.

All of those are rough numbers from memory, if you'd asked me 2 years ago I would have been a lot more au fait, but they aren't too far off. It probably should be noted here though that you will get a lot of bookies who will just get a home Sky subscription and move the card, including At The Races and Racing UK. That'll nearly halve the bill, until you get caught of course.

** Edit - Donnelly's Hollow has just clarified, and in a much more succinct fashion.