Betting is a Business – Gambling is For Idiots!

My question to you today is, how much profit are you really making from gambling? (And please be brutally honest with yourself when answering that question!)

I hope you are winning! If you are then well done to you, as that surely is the goal for most people, but even if you are a rare winning gambler, are you making as much as you could? However if you’re not a winner then don’t worry as your not alone. In fact you’re in very good company, as an amazing 98% of gamblers lose money long term.

So assuming you are not winning, do you know why?

Well I’m going to hazard a guess the reasons are something like this;

a) Betting in the wrong types of races,

b) Blindly backing favourites (especially odds on shots)

c) No sense of money management,

d) Undisciplined approach

e) Chasing losses

f) Maintaining a ‘gamblers mentality’.

However if 98% of people are losing money it stands to reason that 2% must be winning, so who are these elite 2% and what is it that they do differently to the majority?

Well the elite 2% are the professionals and semi-professionals like me and we approach betting as a business. The betting industry like to call us ‘professional gamblers’ but lets just make one thing absolutely clear here, one thing we are NOT are gamblers and this description couldn’t be further from the truth – we don’t bet for fun, or for the sake or thrill of it. We bet for one reason and one reason alone – TO MAKE A PROFIT!

I’ve said this many times before and I’m going to say it again – ‘Betting is a business and gambling is for idiots’ – So let me try and explain the difference between betting and gambling.

As I have already stated I am a professional and as such I am in the business of betting for only one reason – to secure slow and steady long term profitability. To achieve this outcome betting professionally has to be BORING and MUNDANE, from a psychological point of view the result of just one race becomes almost irrelevant to me, as in the long term I know I will make a profit from my betting strategies.

The point of running any business is to make a profit and to achieve this outcome I need the following three elements to work in my favour:

a) A betting bank,

b) A staking plan

c) A betting strategy which will deliver profits over the long term.

The betting bank needs to be big enough relative to my stake size to withstand the inevitable losing runs. It is also important that psychologically the betting stakes are well within my betting comfort zone, meaning that my pulse is never racing either before during or after a bet.

The moment your pulse starts to race should immediately alert you to the fact that you have stopped betting and are instead gambling, something has gone wrong with your strategy and you have become either uncomfortable with the size of your stake or have lost confidence in your chosen betting strategy. The inevitable result of this will be a breakdown of discipline and a desire to start chasing your losses, which is something I NEVER do. When I have a poor day then my attitude is always the same ‘cest la vie’, there will always another day.

I have many diverse and varied betting strategies within my betting portfolio but for the purposes of this exercise let me use my ‘Hughie’ Place Betting Strategy as an example of the above philosophy in action.

‘Hughie’ Place Betting Strategy

Here are the Hughie results for the six months to 01 June 2009. (I could use any 6 month period from over the past 9 years, in fact some previous half yearly figures would show higher profits. But these are the latest figures and emphasise the points I am trying to make.

The results are based on a betting bank of £400 and the stakes being used are as follows £2, £4, £8 and £12

Oct 1 + 77.63

Nov 1 +129.90

Dec 1 + 14.34

Jan 1 +179.83

Feb 1 +116.37

Mar 1 +169.58

Apr 1 – 3.62

May 1 + 13.81

Jun 1 + 77.78

The first thing you will notice is the relatively small and ‘boring’ size of the stakes I am using in relation to the size of the betting bank. By staking such a small percentage of the betting bank on the ‘Hughies’ takes all the stress away instantly, as the bank is never in any danger of going bust and the stake size is always well inside my betting comfort zone. Some of my members bet the ‘Hughies’ to much bigger stakes, however if the stakes are doubled or trebled then so must the bank.

As you can see you could comfortably follow this particular betting strategy to the advised stakes and at betfair sp safe in the knowledge that win, lose or draw over a long term period of say 6 months you would be comfortably in profit. You wouldn’t need to watch any races biting your finger nails praying that a particular horse hung on for a place, because you would be confident that the strategy works and one or two horses not placing wouldn’t make one jot of difference to the ability of the strategy to deliver a long term profit.

I keep using the phrase ‘long term’ because it is essential that you understand that it takes this long-term approach in order to succeed with any betting strategy. Just have another look at the ‘Hughie’ results above and you will clearly see that the months of March and April were not good months for the ‘Hughies’. At the time I remember saying regularly in my daily column that it was probably down to the transitional period of switching codes from the ‘jumps’ to the ‘flat’. For me though that’s just part and parcel of any strategy – we will have these bumps but will come away unscathed as all that matters is to maintain a long term strategy. The plan works, as it doesn’t require me to either lose faith or panic. That said any member who joined in March or April and followed my advice to concentrate on the ‘Hughies’ would have been pretty downhearted by the end of April as it would appear to them that the ‘Hughies’ are a poor bet. However any member joining last December enjoyed a terrific run and would have had a totally different opinion of both ‘place betting’ and me.

I think this point clearly demonstrates the importance of taking a long-term view of any betting strategy (12 months minimum I would argue)

Anyway this example of how safe, slow, steady, boring but consistent profits are generated month after month after month is just one aspect of a strategic and professional betting approach and hopefully demonstrates the difference between the excitement of gambling which is for thrill seekers and the boredom of betting which is my business.

Banks Have a Lot of Reasons to Reject Your Small Business Loan

For a small business to grow into a big business, it needs a loan unless it has exceptional sales and profit margins. A small business owner has quite a few places where he/she can go with a loan request. Banks seem to be one of their options on most occasions. What these owners might not realize is that banks have recently developed a reputation for rejecting small business loans. It seems that banks are more interested in financing large businesses due to their benefits. A bank can come up with a variety of reasons to reject loan approval for a small business. Some of the common reasons are as under:

Reasons for Banks to Reject Your Small Business Loan

Credit History

One of the barriers between you and the business loan is credit history. When you go to a bank, they look at your personal as well as business credit reports. Some people are under the impression that their personal credit does not affect their business loans. But that’s not always the case. A majority of banks look into both the types of credits. One of the aspects of credit that matter a lot to the banks is credit history. The length of your credit history can affect your loan approval negatively or positively.

The more information banks have at hand to assess your business’ creditworthiness, the easier it is for them to forward you the loan. However, if your business is new and your credit history is short, banks will be unwilling to forward you the desired loan.

Risky Business

You must be aware of the term high-risk business. In fact, lending institutions have created an entire industry for high-risk businesses to help them with loans, credit card payments, etc. A bank can look at a lot of factors to evaluate your business as a high-risk business. Perhaps you belong to an industry that is high-risk per se. Examples of such businesses are companies selling marijuana-based products, online gambling platforms, and casinos, dating services, blockchain-based services, etc. It is imperative to understand that your business’ activities can also make it a high-risk business.

For example, your business might not be a high-risk business per se, but perhaps you have received too many charge-backs on your shipped orders from your customers. In that case, the bank will see you as a risky investment and might eventually reject your loan application.

Cash Flow

As stated earlier, your credit history matters a lot when a bank is to approve your loan request. While having a short credit history increases your chances of rejection, a long credit history isn’t always a savior too. Any financial incidents on your credit history that do not favor your business can force the bank to reject your application. One of the most important considerations is the cash flow of your business. When you have cash flow issues, you are at risk of receiving a “no” from the bank for your loan.

Your cash flow is a measure for the bank to know how easily you return the loan. If you are tight on cash flow, how will you manage the repayments? However, cash flow is one of the controllable factors for you. Find ways to increase your revenues and lower your expenses. Once you have the right balance, you can approach the bank for a loan.

The Debt

A mistake that small business owners often make is trying out too many places for loans. They will avoid going to the bank first but get loans from several other sources in the meantime. Once you have obtained your business funding from other sources, it makes sense to return it in time. Approaching the bank when you already have a lot of debt to pay is not advisable at all. Do keep in mind that the debt you or your business owes affects your credit score as well. In short, the bank does not even have to investigate to know your debt. An overview of your credit report can tell the story.

The Preparation

Sometimes, your business is doing fine, and your credit score is in good shape as well. However, what’s missing is a solid business plan and proper preparation for loan approval. If you haven’t already figured out, banks require you to present a lot of documents with your loan approval request. Here are only some of the documents you will have to present to the bank to get approval for your loan.

  • Income tax returns

  • Existing loan documents

  • Personal financial documents

  • Affiliations and ownership

  • Business lease documents

  • Financial statements of the business

You have to be exceptionally careful when these documents and presenting them to the bank. Any discrepancies can result in loan rejection.

Concentration of Customers

This one might come as a surprise to some, but a lot of banks consider this aspect of your business seriously. You must not forget that loans are banks’ investments. Businesses that approach the banks are their vehicles to multiply their money in the form of interest. If the bank senses that your business does not have the potential to expand, it can reject your loan request. Think of a mom and pop shop in a small town with a small population. If it only serves the people of that town and has no potential to grow further, a rejection is imminent.

In this particular case, even if the business has considerable profit margins, it relies on its regular customers for that. The bank might see it as a returnable loan but not as an investment opportunity.

Conclusion

The good news is that you have a lot of funding options as a small business owner. Today, banks are only one of the many options for you to fund your bank. You don’t necessarily have to apply for loans when you have crowdfunding platforms actively helping small business with their funding needs. If you are seeking a business loan from a bank, that’s fine. However, if the bank does not approve your request, it should not worry you much.

How To Start Your Own Online Casino and Poker Gaming Business

Did you know that online gambling business is currently one of the fastest growing business categories in the world? The popularity of online gaming is increasing rapidly and this year has seen significant growth in Europe and Asia. In China and Malaysia, there are twice as many online gamers as there are Internet shoppers. Around 43% of Chinese Internet users play games online, while just 16% report that they shop online.

Revenues in online gaming business rose from only $800 million to over $2 billion in 1999! By year 2010, it is estimated that online gambling industry will top over $16 billion in revenues! London-based Merrill Lynch analyst Andrew Burnett says online gambling could generate more than $150 billion in revenues by 2015.

Until recently small entrepreneurs had no chance of getting into the gambling industry, because of huge capital investments, gaming license acquisitions and legal red tape. The internet eliminated all the obstacles. You can now own and promote your own online casino, sportsbook and multiplayer poker room gaming business and generate revenues you’ve only dreamt about.

There are 3 ways to start an online gaming business:

1) Most Expensive – Design and implement all gambling software for an online casino, sportsbook and multiplayer poker room which could cost you millions of US Dollars. You will also need to obtain a gaming license to run your online gaming business, which requires approval from most governments. However, you will have full control of your gambling site, and full knowledge of the source code of your gambling software. In addition, no royalties are paid out to a gambling software development company.

2) Average – Become a Licensee of an Online Gambling Software Provider. This is a far less expensive option to start an online gambling business and you will receive all the gambling software and sometimes even the equipment necessary. It is also the most popular option for both licensed land-based establishments as well as entrepreneurs. Costs range from $30,000 to $350,000. The average licensing fees are around $150,000 (this usually includes marketing costs). In most cases a royalty is paid to the gambling software provider as a percentage of the monthly “take” or “drop” (gross profit). Usually the gambling software provider has payment processing (merchant account providers) already set up for a fully turnkey operation.

3) Most Affordable – Become a Sublicensee of an existing Licensee. This is the least expensive option to start an online gambling business. Costs range from $5,000 to $60,000. The sublicensee is responsible for all the marketing and receives a smaller percentage than a full licensee (2), because royalties paid to the licensee are much higher.

To legally operate online gambling businesses, online casino and poker room owners turn to sovereign governments in countries that permit online gambling and duly issue licenses for gambling operations. The casinos and poker rooms are registered as offshore gambling operations and in turn, the respective countries gain significant licensing fees and tax-generated revenues.

As Internet use spreads across the globe, online gambling business will continue to be one of most profitable online business opportunities of the 21st century.