LABOUR & ASSOCIATED COSTS
Salaries are the biggest fixed-costs for betting- shop operators. As labour-related expenses spiral upwards, more and more locations become economically unviable.
In Ireland and the UK there are around 9,200 betting- shops, with labour costs totaling around €805m. Traditional betting-shops have an average of 3.5 employees. In Rep of Ireland, this adds up to around €110,000 per shop every year. This sum rises by about 2–4% annually. At that rate, staff costs double every 12 or 13 years. Assuming an industry-standard GP of 11%, this means €1m of Turnover each year goes to servicing staff costs alone.
And the losses are not just monetary:
Employed staff also bring time-consuming issues that have to be continually dealt with;
Recruiting staff for betting shop work is becoming increasingly harder over time. With the large German grocer, Aldi now offering a self-enforced minimum living wage of €12.10 the competition for staff is intense. A greenfield betting shop staff member can take upwards of 6 weeks to be fully trained. Autonomous betting shops alleviate this problem. Instead of having indigenous staff within the shop, a team of mobile engineers can maintain a network of shops. The training and recruitment for on-the-road engineers are far easier than trying to teach a staff member how not to fall for the dreaded slow count! Time and money are often wasted because of staff churn. This problem was exacerbated in 2020 when government payments made inactivity preferable to working for millions of people.
They are often cramped, enclosed spaces, lacking windows and natural light. One of Orchadia Systems personnel Colm Finlay, himself a veteran of 15 years of betting shop work has stated “I use an Apple watch to monitor my exercise and health over time. One clearly distinctive trend I noticed over time was how little steps I took on days when I was rostered to work. Sometimes I would be covering a 12-hour shift on short notice and by the end of the day, I’d have covered 25% of my steps quota. I would share my exercise data with my friends who worked in a variety of other sectors. Even on their working days, there would be no comparison in terms of exercise and movement. Add to this the fact that the shops themselves are built for the privacy of the client, I could easily go 3 or 4 days without getting more than an hour or so of natural light. Neither of these are conducive to good health.”
LABOUR & ASSOCIATED COSTS
WHY AUTOMATION IS KEY
The two rights holders SIS & TRP are now combining for a total subscription cost of just short of €50,000 per annum in 2021. As more and more shops fall by the wayside, the remaining estate of shops are left shouldering the burden of what the rights holders need to “Extract” for LBOs. This vicious cycle is only exasperating the problem at the retail level and in turn having major ramifications for the sport of horse racing itself. What Orchadia Systems proposes is a switch to a more equitable revenue share arrangement no different to the offer currently reserved for online operators.
The key enabler of a revenue share arrangement is the fact that Orchadia Systems shops provide machine-hosted transactions which are exempt from ‘bets after the off’, back prices, mistranslated slips and fraudulent ambiguity. The parameters of the bet are clearly and concisely laid out as occurring to the customer’s expectations before the off. Not only does this mean greater profitability for bookmakers but it also removes nearly all customer disputes. The need for the intermediary IBAS to resolve punter to bookmaker transactional disputes is virtually gone. While horse racing might see a drop in their per-unit subscription incomes, with the Orchadia Systems automated solution more shops can reopen in places long forgotten and the burden of servicing that income can be spread out amongst more shops.