THE COST OF PUNTING

Have you ever bothered to calculate the ‘cost of punting’ ? Most of us do not win in the long term but if you were to approach the activity as a business venture you might be in for something of a surprise!

I have not been a serious ‘horse player’ for quite awhile but I do ‘fiddle’ regularly. Here are my findings and they should be assessed against the following background :

I do not own any horses so nothing ‘eats while I sleep’.
I do not go to the course at all. Nor am I likely to in the future. So there are no transport or on course expenses.
All of my activity is conducted from home via TV & the Internet.
I bet mainly with bookmakers and my horse activities are almost exclusively with Interbet – simply because bets struck are small and ‘bitty’ and primarily on UK racing where I find form far more reliable ( my opinion and not necessarily fact ) and market movements better indicators than locally.

My tote betting comprises about 1% of my betting turnover for the following reasons :

a. As I often back more than I horse in a race I need to know my margins in advance.
b. This exercise will reveal how destructive the takeout is so I have no desire to double or treble that takeout by using the tote.
c. I am not prepared to take a risk only to have my stake refunded without any profit whatsoever.
d. I see little point in reducing my own payout by having a larger wager on a tote event – eg If I were to take 5,0000 places on a horse showing R5 for a place my action will reduce the ‘dividend’ (sic) to a lot less.

In order to conduct this activity I need certain equipment. ( This may vary from person to person but this is the configuration which works for me ) :

Telephony :

1x Landline + ADSL + VAT : R 447-37 pm
1x Service Provider ( Uncapped @ 2 M linespeed ) : R 399 pm

Total : R846 pm

Racing useage of the system comprises about 20% so let’s agree that IT costs amount to : R 169 pm

Hardware :

1x Computer system @ R10,000 with a life (optimistically) of 5 years.
1x TV @ R10,000 with a life (optimistically) of 5 years

Racing useage of system comprises about 20% so this cost amounts to : R 66 pm

( I will ignore printers, paper, consumables as they are negligible for racing purposes ).

DSTV

Although Tellytrack claims to be free DSTV is not! The setup is a requirement to get the picture.

I pay them R692-72 pm

Racing useage of system amounts to at least 30% so this cost amounts to : R207

Form Material :

I am able to source most basic information off the web for free.

So this cost is surprisingly Nil ( or incorporated in the IT cost )

Now let’s cut to the chase. And these are my actual figures for the period January 1st – June 30th which include periods of up to 2-3 weeks when no bets whatsoever were struck.

Forget about whether I am winning or losing ( as some of my bigger plays are still ‘in running’ ). These are the expenses ON WINNING BETS ONLY incurred so far this year :

Betting Tax @ 6% : R 83,182

Interbet Service Fee : R 18,575

Vat On Service Fee : R 2,573

Put another way this activity can be summarized as follows :

1.) I incur costs of R 202 pm to participate via technology.
2.) I pay Interbet an effective R 3,095 pm for connectivity to a pool of bookmakers.
3.) I pay R 428 pm VAT for ‘2’ above.
4.) I pay Multichoice an effective R207 for Tellytrack
5.) I have paid local government R 6,931 pm year to date in betting tax ( 50% of the 6% betting tax )
6.) I have paid the operator R 6,931 pm year to date for ‘the show’ ( 50% of the betting tax )

After all of the above – if I ‘win’ R100,000 nett of the above expenses I assume SARS will want a further R 40,000 despite 6% already having been levied against the gross winnings. The funding which was used to finance the activity had already having been subject to 14% VAT before it was even paid to me and thereafter another 40% before I was able to apply it to wagering!

Makes you realize how expensive this activity can be.........

Bargain....hey....

Great post again Garrick

Garrick please tell me you didn't back the Chiefs, else its going to be even more costly to your pocket...()

And that's not including if you do this part time. my charge out rate is around R1,500 per hour for work. I spend at least 3 hours per day on horses which could very easily be spent on something productive.

Plus I feed them and go to the track ( where is that gun )

Cheers Garrick

hibernia Wrote:

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> Great post again Garrick


I agree...(tu) despite my earlier flippant remark...()

yes but if your money grew more than it laying in a bank accruing minimal interest...then it's worth the headache, besides, you're staving off Mental Disease if you keep your mind active...

Don Wrote:

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> yes but if your money grew more than it laying in
> a bank accruing minimal interest...then it's worth
> the headache, besides, you're staving off Mental
> Disease if you keep your mind active...

I must confess that any participation in racing is best described using adjectives such as 'delusional', 'misguided' and 'irrational'. Lol. The word 'rational' should perhaps be well avoided. Sometimes it makes Mental Disease look like a better option!

Good question!!

You have expressed it only in monetary terms,but what about on ones sanity?

brilliant post.