Ireland-based bookmaker Paddy Power Betfair has been accused in secretly manipulating the odds of on-course bookmakers in horse races in order to prevent paying thousands of Euros in customers winnings, according to The Times.
The daily newspaper reported that according to several people with knowledge of the matter, the company’s head office traders had instructed the brand’s representatives to place bets at local racecourses in order to sharply reduce so-called starting price odds (SP odds).
The Problem of Using SP Manipulation Method
The problem is that starting price must be set independently, being calculated using a random sample of odds from on-course bookmakers, so that a fair price for a horse is set. Also, starting price is never set until the race begins.
As reported by The Times, however, people familiar with the matter claimed that large sports betting companies can intervene in the process in order to save money. According to the accusations, the common practice involves a phone call from a trader to an agent at the course, with the latter being instructed to place a large bet right before a race is given the start. This is aimed at manipulating and reducing the starting price in order to also reduce the payout that would be given to players who win.
Such a practice is not defined as illegal under the current UK gambling legislation and is rumoured to be pretty commonly used across the local industry. As reported by The Times, one person with knowledge of the matter revealed that such a method was often used in case that a customer had made a bet that looked likely to win. The person claimed that Paddy Power is used to collapsing the starting price as a way to reduce its loss.
What is more, such a practice protects the bookmaker as it pays out on the starting price in case that the latter is higher than the price set by its traders.
Paddy Power carried out its merger with Betfair back in 2015. The two companies joined forces in order to create a large gambling company with a market value estimated to €7.7 billion. To date, bookmakers in Ireland are not regulated very tightly, and there has not been any progress in the country’s gambling control bill to guarantee better control and monitoring of the industry since 2013.
SP Manipulation Used on Bigger Events, Too
The starting price manipulation and collapse method may not be illegal, but the question whether bookmakers should be allowed to continue using such a practice still remains. Things seem to be serious, as one of the people familiar with the practice claim it had once been used on less popular events, but bookmakers have started using it on the bigger events, too, including such as the Galway Races.
Another source of The Times which is closed to Paddy Power Betfair confirmed that manipulation and artificial lowering was a common routine used by the company to cut losses, saving it tens of thousands of Euros in a single race. The fact that the bookmaker was focused on protecting itself from losses, was confirmed by a company’s spokesman, who shared that such hedging could be dome via various methods, including on-track bookmakers, off-course bookmakers and the company’s Betfair Exchange.
- Author
Olivia Cole
