Fifty years after its legalization, golf betting has become a $600M industry in the U.K.

The British Open generates about half of the $600 mil. the U.K. bets on golf each year.
Ed Gabel / Joe Zeff Designs

A year ago, as gale-force gusts battered Royal St. George's, site of the 2011 British Open, a down-and-out caddie named Keith Carney hunkered in his flat on the outskirts of London and waited for a windfall to blow his way. Only weeks earlier, Carney, a looper at Sunningdale Golf Club, near his home, had carried 18 holes for Darren Clarke, as he does whenever Clarke swings through town. Their casual round, marked by birdies and jokey banter, firmed up two of Carney's core convictions: (1) "Darren is a great bloke," and (2) "his game is built for links golf," his low, boring shots more than compensating for his frequent struggles around the greens.

On his way home that evening, driven by a hunch and a personal allegiance, Carney stopped by his local betting shop and dropped £10 on Clarke (£5 to win the Open, and another £5 to finish in the top five), at long-shot odds of 150 to 1. When championship Sunday came, Clarke found himself in the final pairing, and Carney found himself in his living room, nibbling his nails in front of the TV. Phil Mickelson charged. So did Dustin Johnson. But the stronger the wind blew, the more Carney liked his chances.

By the time Clarke lifted the Claret Jug, Carney was lifting pints at his corner pub, the start of a two-week celebratory bender. "Believe me," he says. "I was happy for Darren. But I needed that win a lot more than he bloody did."

As feel-good stories go, it was hard to beat St. George's: a first-time major triumph for an aging icon, with fringe benefits for his part-time caddie. But refreshing twists aside, the results of the Open were really nothing new. Though Carney's haul was nice, and Clarke's $1.45 million paycheck would have covered both men's bar tabs, neither matched the profits of the week's biggest winners.

The bookies had cleaned up again.

Their take-somewhere between £6 million and £10 million, according to two leading British bookmakers-was par for the Open in a part of the world where sports betting is legal, and golf and gambling go together like bumps and runs. The urge to make things interesting, as old as the ancient game itself, finds expression in Great Britain as a mainstream compulsion, never more so than when the Open rolls around. Gamblers in the U.K. stake about £400 million, or nearly $650 million, on golf each year, according to Brad Barry, chief golf odds compiler at the bookmaker Ladbrokes. Of that, half is bet on the Open. That's 200 times what Las Vegas takes on the event, and five times the amount wagered on the Masters in the U.K.

Gambling is for entertainment only. Or so goes the claim. But to visit a U.K. betting shop, where wagering diversions range from televised darts and snooker to computer-generated greyhound races, is to marvel at what passes for amusement. In any urban center, the shops are everywhere, in hardscrabble neighborhoods and high-rent districts, cheek-to-jowl with banks and butcher shops, squeezed beside pizzerias and pubs. Almost none belong to old-school numbers runners; most independent shops have been gobbled up by such corporate outfits as William Hill, whose 2,300-plus outposts make it the largest brick-and-mortar operator in the U.K. — only slightly larger than Ladbrokes and Coral, two of the other so-called "Big Three." Dominant for decades, this prominent trio finds itself today in a crowded market, competing with a small host of deep-pocketed contenders.

As numerous as they are, betting shops account for less than a quarter of all golf betting in the U.K. The bulk of the action transpires online, through websites operated by large corporations. Be it the Masters or the Malaysian Open, punting on events — which, in the old days, came to an end once the first tee ball was struck — now carries on until the final putt drops. Head-to-head match-ups, round-by-round scoring — odds are available in near-boundless permutations.

In recent years, the biggest growth has come from interactive betting, or "in-running betting," as it's known in the U.K., which operates as a live market, allowing gamblers to buy or sell a player online at any moment, the odds shifting with every tugged tee ball and yipped putt. There's always the risk of acquiring a junk bond (keyword search: Jean Van de Velde, Carnoustie, '99). On the flip side, snatching up Ben Curtis in 2003 was like getting in early on Apple stock.

More than any major, the Open, with its quirky bounces and bursts of brutal weather, has made a famous habit of defying expectations. In 2004, Todd Hamilton entered the event at 250 to 1; Curtis had been a 300-to-1 shot the year before. As a general rule, the bigger the shock, the better for the bookies, because marquee players attract more public money (see sidebar). Also good for profits: a fan-favorite who repeatedly falls short. "Colin Montgomerie has been good for golf," says Rupert Adams, a public relations executive at William Hill. "But he's been absolutely great for us."

Each bookmaker works hard to set itself apart by claiming to offer the most generous odds or by cultivating personalities that lend their business a human face. They include such polished players as Victor Chandler, overlord of the betting site BetVictor, who is known in gambling circles as the "the gentleman's bookie" for his polite deportment and his personalized touches (dressed in a tailored suit, he pays off some of his biggest bets in person); and Paddy Power, a fourth-generation Irish bookie whose eponymous business has a growing presence in the U.K., aided by its edgy ad campaigns. One of Paddy Power's recent adverts depicted Jesus at the Last Supper, at a table piled high with poker chips. Another showed a pair of elderly ladies hustling to cross the street before an oncoming truck, with odds listed next to each of the women.

If the ads ruffled feathers, well, that was the point. "Our brand is all about having fun," Power says. "If you come to our shops with £100, we want you to go home with £90 in your pocket, instead of going home with nothing. Sure, we want to make money. But if you feel like you've gotten some entertainment value, there's a better chance that you'll be back."

As for the gamblers, or punters, as the British call them, they're a melange of sad sacks and successes, barroom rogues and upstanding businessmen. They range from media pundits like Jeremy Chapman, a Jimmy the Greek-style golf handicapper with a penchant for pink shirts and the power to move markets, to insurance salesmen like Bob Burnside, a placid Northern Irishman who stakes nearly $2 million on the game each year. Of his many spot-on forecasts in the Open, Burnside backed Lee Trevino in '72 and Sandy Lyle in '85. In 1984, when Seve Ballesteros prevailed at St. Andrews, Burnside won more on the Spaniard (£77,000) than Seve won for himself (£55,000).

Sometimes the punters are the players; in a 2005 Sports Illustrated survey, 20 percent of Tour pros admitted to having bet on themselves at a British Open, while 12 percent copped to placing a bet on a competitor. Among those fond of wagering on Tom Watson in the Open is a five-time Open winner named Tom Watson. Nick Price didn't nab the title at Royal Birkdale in '91, but, according to several accounts, including Money Golf, Michael K. Bohn's lively history of golf and gambling, Price did pocket £4,500 by betting on his buddy, Ian Baker-Finch. (Price's manager, David Abell, dismisses the story as "urban legend.")

Jay Haas has played in 10 British Opens, but swears he's never had the urge to back himself. "I never so much as even looked at the odds on myself, in part because it would have been too depressing to see myself listed at 180 to 1," Haas says. "A guy like Trevino might have done something like that, but he's probably listed at 6 to 1 — though at that point, you've got to start asking yourself, 'Is the return really worth it anyway?' "

In both the U.S. and the U.K., golf's governing bodies — the USGA and the R&A — allow informal wagering among players. It's the nation's governments that take different tacks. Just as Prohibition helped make booze a mobster's business, anti-gambling laws in the U.S. have kept huge amounts of sports betting in the shadows. In the U.K., by contrast, an entire industry has been unleashed. A defining moment came in 1961, when Parliament legalized betting shops, sanctifying a practice that was previously restricted to race tracks and phone transactions. Sports betting boomed.

Even as it did, though, golf remained a tiny sliver of the market. Outside of the majors, TV coverage was minimal and tournament odds often hard to come by. Betting shops focused on horse racing and soccer. If the downside for golf gamblers was limited action, the upside was bookies with little golf expertise. In 1988, Chapman the handicapper showed up at the Open at Royal Lytham and noticed that a local betting shop had made a glaring error: 5-to-1 odds on a hole-in-one during the tournament. Knowing that the true chances were closer to 6-to-4, Chapman placed a £200 wager that an ace would be made.

Early Thursday morning, Lanny Wadkins jarred his opening shot on the par-3 first. "Quickest grand I ever won," Chapman says.

Today such egregious bookie mistakes are as rare as double eagles. Those who set the lines are less likely to be mooks than trained mathematicians. Ladbrokes' Barry, already aided by computer algorithms and encyclopedic records of player performance, supplements his knowledge by tuning in to 50 hours of golf a week. When he started in the business, 26 years ago, even tournament results were beyond his easy reach. For scores in the U.S., he and his colleagues would call PGA Tour officials, pretending to be British sportswriters on deadline.

"A lot of times," Barry says, "we didn't even know who was in the field."

Everyone loves a winner, but savvy punters know that trying to pick one is not the right approach. The more lucrative tack, they say, is to search for value, as Bob Burnside does when he hunts for players he feels are overlooked by the gambling public and, as a consequence, underpriced. At the '83 Open at Birkdale, the strategy led him to Andy Bean, who he didn't really think would beat Tom Watson. So he placed £500 on Bean to finish in the top five at the distant odds of 66 to 1. Bean wound up tied for second, and Burnside wound up with a fat win for the week.

The same tactic, Burnside says, has worked well for four decades on players such as Tom Weiskopf and Mark O'Meara, failing him only during the reign of a player Burnside calls "the greatest ever."

"All those years of Tiger's dominance, I couldn't bring myself to back him because the odds were just so terrible, there was no value," Burnside says. "But I cost myself a fortune by not betting on him."

He wasn't the only one to feel Woods's bite.

In 2006, Barry, eager to stand out from the competition, listed Woods as 6 to 1 to win at Hoylake when the other books had Tiger at 3 to 1. Part marketing ploy, the move was also a calculated risk: Woods was in a slump, and the forecast called for foul weather.

"I figured Tiger hasn't been hitting his driver well and he generally plays poorly in bad weather," Barry says. "But come the Open, the skies are sunny and Tiger hits driver once all week." After the first round, seeing trouble ahead, Barry lowered Tiger's price to 5 to 1, then 4 to 1. But there was no recovering from the ditch he'd dug.

On Friday afternoon, when Woods holed a 4-iron from the fairway for eagle on the 14th, Barry turned off the television. On Monday morning, he turned up in his boss's office, hoping that the weekend hadn't cost him his job. The meeting was unnerving. For Ladbrokes, after all, Tiger's win was a £5 million loss. But when all was said and done, Barry kept his post and his perspective.

"Every now and then, you're going to take a soaking," he says. "But in the long run, I look at it as money lent."