Why gambling is a mug's game

Many, many, many years ago, stepmother Dixon decided it would be a good idea to put her stepson off gambling.

Her plan was a simple one. Give said stepson (yours truly) a fiver and tell him to pick a horse in the Grand National.

The chosen horse would naturally lose, young Dixon would be put off the gee-gees for life, and the Dixon millions would be safe for posterity.

Young Dixon decided to play along: first, he would choose the horse with the number of legs most closely approaching three; second, the dubious nag would be paired with a jockey with a career trajectory only slightly less promising than that of a seaside donkey minder.

As two concessions to hope, he would pay the extra 50p tax in advance (it was that long ago) and he would split his fiver each way.

Now an each-way bet, for readers unfamiliar with the ways of the turf, is similar to the offside rule in football. Those who don’t understand it spend hours having it explained to them by those who do, and neither party is happy with the outcome of the discussion.

But the general idea is if your horse comes in second, third or (sometimes) fourth, you still get a bit of your money back. But if the odds are less than four (or five) to one, you don’t get enough money back to recoup your original stake.

To add to your confusion, you also have to bear in mind the two basic rules of horse racing. The first of these is always to bet on the grey. Remembering always that greys aren’t grey, they’re white, with a bit of silvery-black thrown in. The second rule? Never bet on the grey.

And if you think that’s complicated, try working out a fourfold accumulator with a combination tricast on the side.

Anyway, the neophyte punter picked up the each-way concept pretty quickly, dashed off to the bookies and laid his money down.

Later that afternoon, the Dixons gathered round the flickering screen of their steam-powered black-and-white TV and waited for the off, secure in the knowledge that the horse would lose and that the heir to the Dixon fortunes would never henceforth be tempted to throw his supposed inheritance into the path of those thundering hooves.

The jockey was recovering from testicular cancer. His name was Bob Champion. The horse had the same great-great-great-grandfather on both sides of his pedigree, and was recovering from a serious leg injury. His name was Aldaniti.

Together, they won the 1981 Grand National at odds of ten to one.

Which meant a return on the original investment of something like £35, including the stake: not too shabby for a complete beginner.

There was a mighty throng at the bookies when we went back in to collect the winnings, and a sense of anticipation in the air.
Later that evening it was the final of the Eurovision Song Contest, and in those halcyon days the UK had at least an outside chance of winning.

The bookies were offering ten to one – we just laughed. But a few hours later, Bucks Fizz ripped their skirts off and won with Making Your Mind Up. And that’s why gambling really is a mug’s game.

Confusing the meerkat

It’s a funny thing, insurance. Well, it is until you you have to pay for it.
Or indeed, until you have to explain it to someone who never has had to pay for it.
“Daaaad, what’s car insurance?” ask the little ones, as yet another price comparison advert comes on the telly. How best to explain while protecting their innocence?
Well, a good way to teach is in parables: you use an example of something that your pupil is already familiar with in order to explain something more complicated and abstract that they don’t yet understand.
And luckily the younger brethren have a ready-made example right in front of them, in the form of the Grand National.
For was it not their very own dad who a couple of weeks ago forked out his hard-earned dosh on a number of promising nags (well, their names sounded promising), all but one of whom ended up as also-rans, and the other of whom (top grammar) brought home the princely sum of £3 as a disappointing each-way shot?
They understood that all right – or at least they understood the post-race cursing. So why shouldn’t they understand premiums, no-claims bonuses, excesses and courtesy cars?
Because, with apologies to Terry Pratchett, and his “inn-sewer-ants” joke, insurance is nothing more than institutionalised gambling.
You have a middle-sized car and a comparatively small amount of money. The insurance company has a comparatively large amount of money and maybe a courtesy car, which is never as good as yours.
You bet your money that your car will get nicked, or hit by someone else’s dodgy motor after they left the handbrake off at the top of a hill, or blown away to the Land of Oz in a tornado, or one of the other nasty things that insurance companies threaten you with to try to make you sign up with them.
The insurance company bets big money that none of these things will happen, and that your car will survive the year without being TDA’d, scraped or twistered.
You pay your stake (sorry, premium), and if you win the bet you can claim the big payout, which you then get to spend on another car.
The insurance firm meanwhile has taken your money, bundled it up with all the other punters’ dough and laid off an enormous bet on the re-insurance market, which is not explicable by graphs, pie charts, Venn diagrams or any other means at the disposal of your average parent.
Not even rich godfather, who works in it, has ever been able to explain said market to anyone’s satisfaction.
By this point though the kids are starting to lose interest, if not the plot. “Daaaaad, what’s a meerkat?” they venture. “Daaaaad, why are all those scary people staring into webcams on confused.com?”
Again, these questions are best answered in parables.
For it came to pass that a company looked upon the profits made by the insurance companies and saw that they were good, yea even amid a crunching of credit.
And the company said “Lo, let us dress up a cute desert-dwelling member of the mongoose family in a velvet smoking jacket. And lo, let us give it a fake middle European accent and put it in an advert, for verily the punters can’t get enough of that anthropomorphic stuff, like unto the tea-swilling chimps and the bogroll-unrolling puppies. And lo, let us take a tithe of the insurance companies’ wonga even unto ourselves. Lo, lo and thrice lo.”
And the people did look upon the advert, and saw that it was passing good, at least the first time they saw it. But verily, after threescore viewings and ten, they grew vexed and weary with it, and threw the cat at the telly.
“Daaaad....”
A lightly trimmed version of this is due to be my column in The Bath Chronicle on April 16 2009. Or April 19, as I keep thinking of it for some reason.