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Dear Mr. Berko:

Dear C.S.:

I think you might be listening to too many satellite radio programs such as CNN, MSNBC, Bloomberg, CNBC and Fox. But I’ll answer your questions for two reasons: Because you read my column, you’re not dumb enough to enjoy satellite radio, and because the answers might interest and fascinate a lot of readers.

British culture has always cherished three things dearly: the monarchy, tea and gambling. Gambling is a form of sex for most Brits. It’s caused by an antagonist strand in their DNA molecules commanding them to make wagers on horses in Brazil, football in Romania, chess in Russia, elections in Iceland, assassinations, earthquakes, soccer, rugby, sculling and that Nottingham shall win the Welsh Hurling Cup at the Irish Games in Kilkenny. Gambling is so much their cup of tea that gross betting revenues for 2007 actually exceeded the government’s combined spending on defense and health care. It’s legal, licensed and delivers myriad billions of pounds to the Exchequer, a.k.a. the treasury.

Gambling in England is generations more sophisticated than the mob-owned joints in the United States or the bookies who run windows at Pimlico or the punter (the person making a bet) who places a “monkey at 7” ($500 at 7 to 1 odds) with their bookies in Brooklyn. Gambling is a national pastime.

And yes, the best chiropractor in Kankakee is right – well, sort of. Not everybody across the pond is a confirmed gambler. The population of England is about 51 million, and only 12 million Brits are considered “regulars.” But the punters in London are not making big money all the time. In fact, very few make money and fewer still are making big money.

British bookmaking operations run like stockbrokerage houses in the United States. They hire bookies to solicit bets from their list of clients, and like a stockbroker, the bookie earns a commission, usually 5 percent. Bookies provide tips from research departments or other racing services and often finance wagers for active punters. When exceptionally large bets come in, the house can syndicate it with other bookmakers, each of which will share in the risks and profits.

Betting in the U.K. is computerized, like trading on the New York Stock Exchange. Hard data, such as odds, percentages, spreads and total money wagered on a special event, and soft data, like a jockey’s record, trainers, stable, the nag’s runnings, etc., flash across tens of thousands of computer screens. Resultantly, all sorts of betting paradigms have evolved, including the no-risk bet about which your brother-in-law told you.

It’s simple, so here’s how it works. You can place a bet to win and you can stand a bet from another punter who wants the same horse to win, meaning you are effectively betting on that horse to lose. It is like hedging options on the U.S. market, in which a trader purchases both a put and call on the same underlying stock. That’s why some observers call the NYSE a “horse race.”

So let’s say you bet a monkey at 12-1 on Big Dog at Cheltenham. If Big Dog wins, you make $6,000. But if he loses you lose your $500 wager. So to cover your wager you might stand a bet for a monkey at 7-1. If Big Dog wins, you make $6,000 with your monkey at 12 and lose $3,500 standing a monkey at 7, so you net $2,500. It’s zero risk and guaranteed profit just as Dr. Crack Embone told you. But if Big Dog doesn’t win, you are even. You lost your $500 with a monkey at 12 but kept $500 standing a monkey at seven.

Computers plus the ability to bet “ante post,” which means you can bet on a horse before post time, make bets at different odds possible. Ante-post odds are significantly higher because you can lose your bet if your horse doesn’t run. The odds are hugely higher before the entries close because you are also gambling that the connections might not chose your horse to run. Odds can be hugely higher still because even if a horse is entered it might not run. Capish? Good!

I know nothing about publicly traded bookmakers in the United Kingdom, but they’re common as rats and alley cats. The most widely known are William Hill, 888 Sport, Lasseters Corp., Stanley Leisure, Bet-on-Sports, Bet 365 Bookmakers, Boylesports, SportingBet PLC and Ladbrokes. I trust neither my data on revenues and earnings nor prices quoted on the London Stock Exchange. However, I can tell you that many of these firms are immensely profitable and the total pound value of one month’s wagers would boggle your mind. I can tell you that Ladbrokes and William Hall are the oldest bookmakers in England, that the largest and most well known is Ladbrokes, kind of considered the Merrill Lynch of U.K. bookmakers. I can also say Merrill Lynch has branch offices in the U.K. that will e-mail or fax you pertinent financial data on most publicly traded bookmakers with “buy” and “sell” recommendations.

Bookmaking has been a land-office business in the U.K., and during the last five years, gross betting revenues grew nearly 40 percent. However, the English housing market is collapsing, job losses are growing, manufacturing is trending lower, the real estate market is weak and the Organization for Economic Co-operation and Development and the British Broadcasting Corp. tell us economic growth will slow 1.2 percent this year and the United Kingdom will soon enter a recession that could stretch 18 to 24 months before a recovery is seen. The FTSE 100, like the U.S. S&P 500, is down more than 20 percent since reaching a 6,800 high in November 2007. So I think a proposed venture with several of the best bookmakers might be ill advised right now. And I’d make book on that.

Oh, and right now, Ladbrokes puts Obama as the 1-2 favorite to the November elections while William Hill is offering 5-4 on McCain to win. Be mindful that London bookmakers trump our poll results every time.

Please address your financial questions to Malcolm Berko, P.O. Box 1416, Boca Raton, Fla. 33429 or e-mail him at malber@comcast.net. © 2008 Creators Syndicate, Inc.