Thursday 27 November 2014

Transformation from bookie to banker is long overdue

It might be desirable to have people who know gambling is for mugs running the banks, writes Declan Lynch

Published 18/05/2014 | 02:30

Illustration by Jim Cogan

PATRICK Kennedy, chief executive of Paddy Power, will be leaving his post in a year's time. And according to various business reporters, there is speculation that he may eventually "head up" Bank of Ireland, where he already has a "role" as a non-executive director.

Now, there was a time in Ireland, and indeed in most advanced societies, when even the mere speculation that a bank might be run by a bookie would cause some excitement. Even, perhaps, a touch of anxiety.

Terry Rogers, for example, who was effectively the chairman and chief executive of the Terry Rogers turf accountancy corporation, a man of tremendous energy and charisma and a mathematical genius, would hardly have been in the running for one of the great roles in Irish banking.

I remember as a boy watching Terry Rogers standing on an upturned crate at the Phoenix Park races, wearing a Panama hat and a pin-striped suit, his colour rising as he shouted the odds, the quintessential bookie. Like his big-time colleagues on the rails such as the Belfast bookie Sean Graham – "let them in and let them out" – he was an impressive figure in many ways.

And yet for all their acumen, such men would hardly be on the short-list when the top post at the Bank of Ireland was being considered.

And if they had been, even the most well-behaved of business reporters would probably have got a bit flustered about it. In fact, the idea of a man who had run a betting organisation even being on the board of a bank would have been regarded as self-evidently wrong.

So these reports that the boss of Paddy Power might soon be running the Bank of Ireland are interesting and informative in themselves, but the fact that they came without comment of any kind, the fact that such a move is now regarded as a completely normal procedure, is the essence of the story.

It confirms something that we have been observing for some time, the fact that throughout the financial services community, the bankers have tended to become more like bookies, while the bookies have become more like bankers.

For all the terrible eejitry which they generate, including the recent 'North Korea' scandal and the Oscar Pistorius ad (which were not mentioned either by reporters of the Kennedy announcement), the executive class at Paddy Power and other betting corporations are not exactly the "characters" that their publicity would suggest. You will not find these guys standing on upturned crates being flamboyant, taking enormous bets on the nod from seasoned punters, like the bookies of old.

In spirit they are probably more akin to the bank managers of old, the deeply forbidding sort who were averse to all crazy-sounding propositions, who would not give a sucker an even break, who were ruthless in maintaining the hardline ethos of the institution. Indeed, my work in this area has brought me into contact with certain punters who say that even a relatively modest profit on their part, a few years running, has resulted in their accounts being restricted, for breaking the unwritten rule which requires them not to win, over time, but to lose.

And during that period in which the betting corporations have become fantastically successful, the banks have been degenerating and disintegrating. They have disgraced themselves again and again and again. And they have done this mainly through gambling.

The betting corporations have a certain superficial connection with gambling too, but only in the sense that other people gamble, with them. The banks, by contrast, have not been quite so prudent.

So while the corporate bookies, in a certain light, can be seen as providers of an essential service to the mature investor, the bankers tend to be seen as incorrigible blackguards – it used to be roughly the other way round.

The attitude of the executive-style bookie to issues of profit and loss can best be illustrated by a recent story involving the actor Ben Affleck who was asked to leave the blackjack tables at Las Vegas because he was "card-counting". Which is not cheating, as such, it is just a talent that Affleck has, that gives him a better chance than most other players of beating the house.

So they barred him, essentially because he was good at blackjack. Which implies that they only want people who are not good at it.

That is how it works, in the gambling business, or 'gaming' as they prefer to call it. If you want to have 'fun', most likely it is you who will be paying for it. You will probably be paying too for the horrible ads that inveigled you into it in the first place.

These executive bookies with their private educations and their upper middle class accents have managed to parlay a once-reviled trade into a form of family entertainment, and that is quite a trick.

Indeed, if anything the transformation of bookie to banker is long overdue – on the same morning as the Patrick Kennedy story, we were hearing dark reports of a new property bubble. In which case it might be desirable to have people running the banks who have a deep understanding that gambling, for the most part, is for mugs.

Not that it matters much who runs them. As the old blackjack player put it, the bank always wins.

Sunday Independent

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