Drones Vs Telegraphs

There is a thoroughly modern story coming out of Ireland:

Drones are being used routinely around Irish racecourses to take advantage of a short time lag between broadcast footage of events and the action on the ground.

Even this small delay allows gamblers take advantage of changes to so-called “in-running” betting odds, if say a horse begins to struggle, jumps awkwardly, or falls.

Obviously what those naughty drone operators are doing is despicable. Imagine cheating bookmakers out of their hard-won profits by using technology! Awful!

But it reminded me of an earlier story. Much earlier!

Tom Standage wrote a brilliant book called "The Victorian Internet". It talks about how the invention of the telegraph upended all sorts of social conventions - in much the same way as the popularity of the Web did at the end of the last century.

Provincial bookmakers used to accept bets long after the race was over. They would wait until the information was transmitted to them via telegraph. To prevent regular punters sending the winning horse's name back to their accomplices, the telegraph companies simply banned unauthorised people from transmitting racing results. But there was plenty of cunning to be had…

Here's an excerpt from Tom's book:

One story from the 1840s tells of a man who went into the telegraph office at Shoreditch station in London on the day of the Derby, an annual horse race, and explained that he had left his luggage and a shawl in the care of a friend at another station—the station that just happened to be nearest the racetrack. He sent a perfectly innocent-sounding message asking his friend to send the luggage and the shawl down to London on the next train, and the reply came back: "YOUR LUGGAGE AND TARTAN WILL BE SAFE BY THE NEXT TRAIN." The apparently harmless reference to "TARTAN" revealed the colours of the winning horse and enabled the man to place a bet and make a hefty profit.

You can read more about this in "The London Anecdotes for All Readers" published in 1848.

I wonder what the next innovation will be which exploits information asymmetry?