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ABOUT OUR SPONSOR - BETFRED
Fred Done owns 256 betting shops, and is the largest independent bookmaker in Britain. The recently published 'Rich List' estimated the wealth of Fred and his brother, Peter, at a conservative £78 million, but he began with nothing. In 1959, the 15-year-old Fred worked with his father in the family's bookmaking business.
'He traded in Knott Mill, one of the rougher areas of Manchester, under a tarpaulin in a back yard. He would open the shop from eleven to three and from five to seven for the evening dogs. Bets were written on any scrap of paper, with a nom de plume on the back.
'We had runners in all of the factories in Trafford Park, one of the biggest industrial complexes in Europe. We would send a taxi round every day, and the bets would be handed over in clock bags.' These were leather bags, which, when closed, set the time on a clock, confirming that bets had not been placed after racing had started.
'There were no books, there was no income tax, no betting duty. What you had at the end of your day was profit. The only payment you had to make was bribe money to the police, two or three quid a week to keep them off your back. If they were going to raid you, they'd let you know.' Bookmakers' runners, who earned 10 per cent commission on all the bets they collected, were imprisoned automatically for a third offence; when a raid was imminent, substitutes were employed.
'Of course, punters were not as well-informed then. I once said I felt sorry for them and my father said, "If I ever hear you say that again... Always remember, skin 'em and stamp on 'em".' Limits on multiple bets protected bookmakers from excessive losses. The businesses were highly lucrative and had to be protected from predators. 'I'm choosing my words here. You would get threats and you had to look after yourself. You had to be tough to stay in the industry. We had runners in all the pubs as well, and there was a lot of competition. The pubs were probably worse than the factories to control.'
In 1961 Done went to work for the Peters chain of betting shops in Salford, marking up prices, and after a few years he had been promoted to manager of their credit office. 'There was no [security] camera, no till. In those days it was so good that you could allow for the fiddling and still make money. But when betting tax came in and we started trimming the odds, it became a business.'
The first five years of High Street betting were the most rewarding, and by the mid-1960s local magistrates had granted an estimated 16,000 licences. Applicants had to prove a knowledge of the business; one of the most compelling arguments was to admit to a couple of prosecutions for illegal bookmaking.
John Banks, who owned a chain of betting shops in Scotland, and who later became one of the biggest racecourse bookmakers, described the shops as 'money factories', a description that attracted the Government's interest. In 1966 they introduced betting tax.
The following year, Done started out on his own. 'Two weeks after we opened our first shop, foot and mouth struck. I had no cash and thought we wouldn't make it through. Most bookmakers closed, but we kept going with the dogs, and the punters came. They wanted to bet.'
One of the first men to realise the potential of betting shops was Cyril Stein of Ladbrokes. He acquired shops, no matter how run down, no matter the location. He moved the licensed premises, refurbished them, and turnover soared. 'Cyril was a man before his time,' says Done. 'I've never liked Ladbrokes. They've always been too aggressive, but I looked up to them. I think they've lost it now.'
Betting tax was increased and the Government, under pressure from football pools companies, imposed a 33 per cent tax on the fixed-odds coupons issued by bookmakers. The number of High Street shops began to decline, and now there are just over 8,000.
Until the mid 1980s, punters could listen only to an audio commentary on races, provided by the Exchange Telegraph Company. Each region had a commentator with an appropriate accent. 'When the regular man had a day off, a cockney took over. We hated him.'
Not until 1986 was regulation relaxed. Television screens were permitted which, a year later, would bring live racing via satellite to the majority of shops. Bookmakers were allowed to have two amusement-with-prizes machines and to provide soft drinks and refreshments. They were permitted to open in the evenings and on Sundays, but duty at 10 per cent (nine from 1996) was driving punters to illegal bookmakers. Still operating in pubs, clubs and factories, they account for a reputed 10 per cent of betting turnover.
'The tax killed off big punters in the shops who wanted to bet the odds-on chances, the man who would have £4,000 to win £1,000. Since offshore betting began, some of my biggest customers have been coming into the shop to see the prices and watch the races, but walk outside to call Victor [Chandler, who pioneered offshore betting] to bet on their mobile phones.'
Frankie Dettori rode all seven winners at Ascot in September 1996, and the betting industry shuddered. 'I wrote out cheques for £1.5 million. Even my gardener won £10,000 off me.' Bookmakers suffered another blow when the Government introduced the National Lottery six years ago, although a strange logic denied betting shops the right to sell tickets.
'The Lottery was a blow. Not necessarily the jackpot, but the scratch cards. They took away significant business.' The advent of off-shore bookmaking, with lower deductions, was the final punch. The Government conceded.
Betting duty will be abolished, perhaps as soon as the autumn, to be replaced by a 15 per cent tax on bookmakers' profits. 'If they hadn't done anything,' says Done, 'the number of betting shops would have been halved within five years. Now, I believe there will be an increase in the number of shops. It's an exciting time. I can't wait to get to work in the mornings.'
Done closed his credit business a decade ago - too much hard work betting against a shrewd clientele that didn't always pay up - but he will be tempted to start again. 'It's a different business now, with punters using Switch and Delta cards - you don't get knocked. I'll also be looking at starting a fixed-odds coupon for football.'
He should do well. Over the years Done's policy of giving more concessions than his rivals has built up a loyal clientele. A Manchester United devotee for more than half a century, Done pays out early those who have backed the Old Trafford team to win the Premier League when they are clear at the top. In 1998 Arsenal finished the season strongly to overtake United for the Championship, a late run that famously cost Done half a million.
This interview first appeared in The Observer 29/04/2001
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