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When will Betfair start restricting/banning accounts?

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By:
The Betf
When: 23 Sep 06 10:56
I can see the promotional material now:

Are you an 'INSIDER'? If so, sign up for the Exclusive Betfair Insider Account for a special
commission level of 99.9%

The reason low commission levels were introduced in the first place (before eventually hitting upon the current scheme) was to reward the market-makers. What you are proposing turns theory completely on its head and will dissuade those same market-makers from seeding. Are you sure you want that to happen?

What's at the root of this thread? Is it that you are concerned that people lose too quickly on Betfair and so eventually all of your potential winnings will dry up? Are you saying Betfair will self-implode because every mug punter knows that betting on Betfair has zero chance of winning? If you are saying this, DJ, the I will gladly stay here all day disagreeing with you, and on my side I will have hard evidence that people will always spend their hard earned cash at bookmakers and at casinos and that they keep going back for more. At least with Betfair the odds are stacked slightly more in their favour.

If you are not saying that then what would ever be the point of restricting big accounts, other than to** those big accounts off and systematically force a reduction in liquidity?

Forgive me, but I've quite lost the track of this thread.
By:
steady
When: 23 Sep 06 10:58
commission will be restructured.



thus ends the thread. thanks,

steady.
By:
bigpoppapump
When: 23 Sep 06 11:02
understand your point: of course they could make more by charging certain users more. doesn't mean they're not making as much profit as they think they can though does it?

with their current pricing structure they know how much they can make. they just look at the spreadsheet and there's the figure. They do not know, until they try, what impact a new pricing structure may have. it will be negative in certain cases (lost customers) and positive in others - users staying and paying more.

your idea is creative. a good idea. (not meaning to be condescending - genuinely think it's smart in theory). But the fact that they could charge certain users more is not proof that they do not max profits. the whole strategy for making more next year than you made this is a little more complicated than "charge more".
By:
Acilles
When: 23 Sep 06 11:07
Betfair unwritten policy is banning (or restricting) all winning accounts =** (and others) attractive policy of welcoming all.

Eventually Betfair becomes old news;** emerges the new shining star.
By:
DJ Sunset
When: 23 Sep 06 11:08
The reason low commission levels were introduced in the first place (before eventually hitting upon the current scheme) was to reward the market-makers.

Introducing a volume discount seems fair enough on the surface, but it also has the bonus for Bf of penalising people who spread their betting between exchanges/bookies rather than just on Bf.


What you are proposing turns theory completely on its head and will dissuade those same market-makers from seeding. Are you sure you want that to happen?

You don't need people giving out poor prices on a lot of Bf's markets. On minority markets you do, so offering carrots to people market making in niche markets seems fair enough, but offering carrots to people pumping money into Man U v Liverpool match odds, is not necessary.



What's at the root of this thread?

Asking a question that if there are sound reasons why Bf may charge more for the product in the future, anybody who uses Bf heavily should think long and hard about


Is it that you are concerned that people lose too quickly on Betfair and so eventually all of your potential winnings will dry up?

No.

Are you saying Betfair will self-implode because every mug punter knows that betting on Betfair has zero chance of winning?

No.


If you are saying this, DJ, the I will gladly stay here all day disagreeing with you, and on my side I will have hard evidence that people will always spend their hard earned cash at bookmakers and at casinos and that they keep going back for more.

But I'm not saying 'this'.

At least with Betfair the odds are stacked slightly more in their favour.

Do you really think that? I have watched many markets where people have a 0% chance of winning their bets - and its completely legal. Sometimes odds are in people's favour on here, other times they are very, very much not.


If you are not saying that then what would ever be the point of restricting big accounts, other than to **** those big accounts off and systematically force a reduction in liquidity?

I didn't say to restrict big accounts. I said there are reasons why they might charge more to winning accounts. (and less to losing ones).
.
By:
DJ Sunset
When: 23 Sep 06 11:09
bigpoppapump 23 Sep 12:02


understand your point: of course they could make more by charging certain users more. doesn't mean they're not making as much profit as they think they can though does it?


erm, yes it does :^O
By:
bigpoppapump
When: 23 Sep 06 11:11
erm, no it doesn't :^O
By:
DJ Sunset
When: 23 Sep 06 11:11
Acilles 23 Sep 12:07
Betfair unwritten policy is banning (or restricting) all winning accounts = ****** (and others) attractive policy of welcoming all.
Eventually Betfair becomes old news; ****** emerges the new shining star.


Why is Betfair any different from the Big 3 though? They will make a lot more money if they charge winning accounts more, and very few if any of those winning accounts will leave.
By:
DJ Sunset
When: 23 Sep 06 11:12
:^O bpp. :)
By:
bigpoppapump
When: 23 Sep 06 11:12
with their current pricing structure they know how much they can make. they just look at the spreadsheet and there's the figure. They do not know, until they try, what impact a new pricing structure may have. it will be negative in certain cases (lost customers) and positive in others - users staying and paying more.

me. a few minutes ago, on the unknown impact of price changes.
By:
DJ Sunset
When: 23 Sep 06 11:17
price change impact is easy to work out on markets where users solely use Bf. its much more tricky on arbers markets (massive winning accounts could actually be wedded to massive losing accounts in Asia, and vice versa).

they have the figures for the commission generated v profitability of each account, and if you've got your goliath accounts who happen to be the essential market makers that the exchange would "die" without (;)) running at 10% profit on turnover, its not hard to see that an increase from 2% to 3% would have little impact on them, but a huge rise in profit for Bf. I don't think a change in commission would be hard to model at all, however a new structure was put in place.
By:
bigpoppapump
When: 23 Sep 06 11:18
write to them
By:
DJ Sunset
When: 23 Sep 06 11:19
why would I write to them? :)

"dear Bf, please put up your charges." . can't quite see myself writing that ;)
By:
bigpoppapump
When: 23 Sep 06 11:28
thought you wanted them to maximise their profits?

and this method (charging more) is something you feel they haven't considered/aren't considering?

the current philosophy behind their pricing strucutre seems to me (a simple soul, but I think I understand this concept) is the more you use, the less you pay proportionately. Hence you start at 5% and all the way down to the legendary 2%. Betfair as a software platform, charging a rental fee for likeminded individuals who want to meet and bet online, benefits from high usage rates. You are saying this is flawed, and they ought (as a business) to charge more proportionately, for high levels of usage.

I think this demonstrates a crucial misunderstanding of how b/f makes money. volume is the key. they don't discourage this. they encourage it. i cannot see them changing their whole ethos. but hey, i've been wrong before ;)
By:
Acilles
When: 23 Sep 06 11:30
'Why is Betfair any different from the Big 3 though? They will make a lot more money if they [i]CHARGE winning accounts more, and very few if any of those winning accounts will leave'.[/i]

Your thread title uses the words 'banning', 'restricting' winning accounts. So my point is taking aim at these possibilities.

(My understanding of restricting, = successful punter exceeding a 'success' threshold, thus triggering a small stake limit).
By:
bigpoppapump
When: 23 Sep 06 11:31
how do casinos treat whales?

charge 'em more for their room and meals etc? or comp them for everything to have the volume going through the house?

you charge your best customers less, not more.
By:
DJ Sunset
When: 23 Sep 06 11:34
thought you wanted them to maximise their profits?

I don't like them running markets after the result is known and being bet on. Making money out of becoming a matching service between insiders and naive mugs looks like bad business to me, but maybe its very profitable for them? It looks like Betfair allow access to their markets to phone vote insiders, have identified no law is being broken, so they do nothing about it. As I've said earlier in this thread, my suspicion is that by doing this Betfair are paying 95% of the bill to subsidise insiders.



and this method (charging more) is something you feel they haven't considered/aren't considering?

yes it is something i feel they must surely be considering, and will be realised in the future, hence this thread ;)





the current philosophy behind their pricing strucutre seems to me (a simple soul, but I think I understand this concept) is the more you use, the less you pay proportionately.


there is a difference between "high usage accounts" and "high winning accounts". high usage accounts are perfect for Bf. High winning accts aren't.


Hence you start at 5% and all the way down to the legendary 2%. Betfair as a software platform, charging a rental fee for likeminded individuals who want to meet and bet online, benefits from high usage rates.

Usage is not the issue being discussed.


You are saying this is flawed, and they ought (as a business) to charge more proportionately, for high levels of usage.

Usage is not the issue being discussed.



I think this demonstrates a crucial misunderstanding of how b/f makes money. volume is the key. they don't discourage this. they encourage it. i cannot see them changing their whole ethos. but hey, i've been wrong before

Usage is not the issue being discussed.
By:
Robin Ewe
When: 23 Sep 06 11:35
A few people seem to have assumed on this thread that if you're on 2% commission you're a big winner. I really dont think this is the case judging by the hospitality days i have been to. Id say 75-80% of those on 2% commission are high stakers who lose overall so if betfair do raise the bottom commission rate from 2 to 3% they will be hurting these people even more.
By:
DJ Sunset
When: 23 Sep 06 11:35
bigpoppapump 23 Sep 12:31

you charge your best customers less, not more.



I think the "best" customers for Bf are the losing ones. The winners won't go anywhere even if there is a price hike. They also eat in to Bf's profits. If you should charge your best customers less, losers shoudl be on 2% and winners shoudl be on 5%,......
By:
DJ Sunset
When: 23 Sep 06 11:36
gray309 23 Sep 12:35
A few people seem to have assumed on this thread that if you're on 2% commission you're a big winner.


I've made that assumption, and apologies if I'm mistaken.
By:
bigpoppapump
When: 23 Sep 06 11:49
I don't like them running markets after the result is known and being bet on. Making money out of becoming a matching service between insiders and naive mugs looks like bad business to me, but maybe its very profitable for them?

you don't really assume this is betfair's business model. You're a smart chap. this is a dig about certain incidents in the past where **s benefitted on certain inherently risky specials markets. you yourself have gone on record to say you've known results but haven't chosen to benefit. so let's agree this is bad business (b/f having these markets) then they should can 'em. anyone betting on an arbitary tv show where a producer can literally play God does so at their own risk.


Usage is not the issue being discussed.


you want to play at CEO of b/f, discuss making profit, but not talk about site traffic? it's their business. it's all that matters. they don't care who wins. all bets by definition are matched - so all markets witness a 50/50 divide between winning money and losing money. theoretically they benefit more when more 5% comms guys win than 2% comms guys, but to have lots of the former they like the liquidity/volume provided by the latter. Betfair being THE place to bet if you're using an exchange is crucial. and you don't want to consider the importance of usage? so much you said it three times. Your tenure as CEO B/F would be, I'd bet, a short one.
By:
zeeny
When: 23 Sep 06 11:50
Ok, be honest here, is this the greatest fishing thread ever, or are you actually thinking that stuff? I would have gladly participated in the argument at some point, but I'm yet to see a phrase that would make me doubt for a second that it makes sense for BF to act against "winners".

PS: Except that we won't have "Betfair - Sharp Minds", but "Betfair - Losers welcome", which is an improvement, without doubt.
By:
DJ Sunset
When: 23 Sep 06 11:52
bigpoppapump 23 Sep 12:49

they don't care who wins.







DJ Sunset 22 Sep 19:48


Betfair is not a zero-sum game in the way you present it there.

Scenario 1

Player A bank 100 v Player B bank 100

money shuttled backwards and forwards between two punters, Betfair creaming off 2.5% of the total wagered, if bets are placed at evens. End result Betfair Player A and B both lose all their money, Betfair makes 200


Scenario 2

Player A v Player B v Insider

Every bet placed by either A or B is matched by the insider. End result Player A bank down from 100 to 0, Player B bank down from 100 to 0, Betfair make 10, insider makes 190
By:
DJ Sunset
When: 23 Sep 06 11:53
Scenario 3

Player A (Mug) v Player B (Mug) v Shrewdie

Bets are placed backwards and forwards between all three. End result Player A bank down from 100 to 0, Player B bank down from 100 to 0, Betfair make 100, Shrewdie makes 100
By:
DJ Sunset
When: 23 Sep 06 11:54
and the 100 that the shrewdie makes is withdrawn from the system. surely Bf would prefer scenario 1 to 3?
By:
zeeny
When: 23 Sep 06 11:58
I'm confused:

1. Not all winners are insiders, I hope that's not what you're saying?
2. You assume, that getting winners out of the exchange would NOT create new winners. An assumption that is very debatable, and quiet probably wrong, IMO, as the balance of money would shift in a way that would create possibility for users that lose or are close to 0 to find themselves wnning, this becoming winners and restarting the circle.
3. Betfair market two services to most people:
- an entertainment platform.
- a dream.
Banning even ONE winner, would mean betfair sell 1 service: entertainment platform only. Would you bet, if you know that the moment you win on a predifined consistant basis you lose your access?
What seems to make sense to you mathematically, does not make sense economically. GL with the thread, hope it reaches 500. With the current state of the BF forums, won't be surprised if it happens.
By:
bigpoppapump
When: 23 Sep 06 11:59
only if Mug A and Mug B didn't use their flexible friend to keep replenishing.
Or if Mug C and Mug D didn't make their ill advised entry into the market. winners = good business, not bad.

your company, as CEO would be a dull place DJ. All accountants and no marketing........

Got to sell the dream my friend, or there's no business at all.......
By:
DJ Sunset
When: 23 Sep 06 12:07
zeeny 23 Sep 12:58


I'm confused:
1. Not all winners are insiders, I hope that's not what you're saying?

Why would anyone rational think that?



2. You assume, that getting winners out of the exchange would NOT create new winners.

I've posted many times on this thread that extracting the maximum possible revenue from users is not being achieved by the current system, and I think its likely the system will change in the future. I've even written on here that its worth keeping the insiders, if Bf charge them up to a level for using the product that reflects their perfectly inelastic demand for it.


An assumption that is very debatable, and quiet probably wrong, IMO, as the balance of money would shift in a way that would create possibility for users that lose or are close to 0 to find themselves wnning, this becoming winners and restarting the circle.

Yes, it is an assumption that would be wrong, but I'm not sure where you have got it from, nor why you imagine I have said it. I clearly haven't.


3. Betfair market two services to most people:
- an entertainment platform.
- a dream.


I've seen adverts for bookies using young men and women partying in limo's celebrating their gambling success from bets placed with the bookies. Life changing sums have been won from bookmakers who restrict accounts, and the same would be the case here even if there were commission charges related more to each users willingness to pay for the product.


Banning even ONE winner, would mean betfair sell 1 service: entertainment platform only.

I don't fully agree with you.


Would you bet, if you know that the moment you win on a predifined consistant basis you lose your access?

The debate has moved towards charging more for people who have the most benefit from using the service. This does not include banning people who bet without **ing (e.g. clock-beating etcetera).
By:
DJ Sunset
When: 23 Sep 06 12:09
bigpoppapump 23 Sep 12:59

Got to sell the dream my friend, or there's no business at all.......


excellent B-). since when did selling a dream involve actually offering one ;) . last time i checked people who smoked weren't being welcomed to marlboro county, they had yellow teeth, pale skin, and emphysema. carlsberg don't do liver cirrhosis, but if they did,............... well actually they do.
By:
morris
When: 23 Sep 06 12:10
In theory scenario 1 is better than 3 but the problem is it's not a real world scenerio.

Liquidity breeds liquidity.

A good example is when the bots are down on exchange games.(scenario 1).huge spreads , thin markets no-one wants to bet.

When the bots are working(scenario 3) we have 100% books and mega liquidity.The total matched per game increases tenfold.

It's a case of whether you want 95% of 100 or 50% of 1000.

Obviously no-one wants insiders , but genuine (honest) winners provide the liquidity that the exchange requires to make it's profits.
By:
frog
When: 23 Sep 06 12:10
DJ,

I think you are confusing two issues here. I dont think your idea to close accounts of genuine punters who win has any merit as these people win then lose as things change. You have to give genuine punters the dream of being able to win to get them here in the first place.

Obviously most people would agree that the **s (the market manipulators and insiders) should be banned immediately. They should be banned because they are skilless individuals who can only win through **ing everyone else who plays in good faith.
By:
bigpoppapump
When: 23 Sep 06 12:17
since when did selling a dream involve actually offering one

:^O

you want to close down **s, but want b/f to be a chea itselft? "we'll only let you play if you don't win?"

b/f can sell a genuine winning dream (when bookmakers don't) , because as discussed, and as you know, they don't care who wins.........Bookies hate that anybody wins. Betfair is a software platform that charges for usage, and thus wants high levels of usage. Brilliant model. Working like a dream, they wont be shutting down winners anytime soon. forget it.

you sound like you want gambling to be banned altogether? if that's the case, please go away ;) America might take you :p
By:
medemi
When: 23 Sep 06 12:18
Holding on to the insiders won't do betfair any good.
We're talking a small percentage (just like the big winners) that could
give betfair a bad name and be a major burden when they want to expand across borders.
I can't imagine that betfair would not share this view.

As for increasing profits, I think the traders will be targeted next, certainly not a few big winners.
When considering technology won't be able to keep up with growth eventually, it makes even more sense.
Increasing margins this way very gradually would be on my mind if I were CEO , along with
fighting crime and improving integrity.
By:
DJ Sunset
When: 23 Sep 06 12:19
bigpoppapump 23 Sep 13:16

you want to close down **s, but want b/f to be a chea itselft? "we'll only let you play if you don't win?"


No, as I keep having to say, and it keeps being ignored, it makes sense for Bf to charge people who would be break even at 15% commission, more than the 2% that they currently are charging. (Maybe 3%, 4%, or if we're getting silly, 8%).

I am not suggesting banning any genuine punters accounts.

Are you calling the Big 3 **s btw? As far as I know they restrict people, which isn't **ing, its looking after their own business model. The point is that Bf's business model probably isn't quite as different to the Big 3 as they used to think it was.
By:
DJ Sunset
When: 23 Sep 06 12:22
bigpoppapump 23 Sep 13:16

Betfair is a software platform that charges for usage, and thus wants high levels of usage.


A trader who bets hundreds of times on one market and wins nearly every market pays 5% of their winnings to Bf. A mug who bets a few times across many different accounts but has a lucky streak ends up paying say 50% to 80% of their winnings to Bf as commission. They use the site far less though.

Betfair charges are far from being perfectly correlated with usage.
By:
The Betf
When: 23 Sep 06 12:22
DJ, it sounds to me like you are digging yourself a hole by justifying an increase in commission for big accounts. If Betfair are seriously planning this then I sincerely hope they change their minds. Surely Betfair would be better serverd by trying to increase liquidity by reducing commission.
By:
DJ Sunset
When: 23 Sep 06 12:26
morris 23 Sep 13:10
In theory scenario 1 is better than 3 but the problem is it's not a real world scenerio.


Fair point.

Liquidity breeds liquidity.

Fair point too, but perhaps more so when the markets are in their infancy, and less so later in the life cycle?


A good example is when the bots are down on exchange games.(scenario 1).huge spreads , thin markets no-one wants to bet.

When the bots are working(scenario 3) we have 100% books and mega liquidity.The total matched per game increases tenfold.


These are markets that need seeding. (Fair enough).

It's a case of whether you want 95% of 100 or 50% of 1000.

Fair point :)

Obviously no-one wants insiders , but genuine (honest) winners provide the liquidity that the exchange requires to make it's profits.

I'm not sure I agree 100%. I "think" (but I don't know) that as there is nothing illegal whatsoever about betting using a phone vote, Bf have made the decision to allow them to bet freely. If that is Bf's position, I can't help but feel that even if it is legal, it is a very expensive thing for Bf to do.
By:
bigpoppapump
When: 23 Sep 06 12:43
Are you calling the Big 3 **s btw? As far as I know they restrict people, which isn't **ing, its looking after their own business model. The point is that Bf's business model probably isn't quite as different to the Big 3 as they used to think it was.

the Big 3 don't **. They cant because they don't "play". They set prices, and if they get one "wrong" they cry palpable error. They shut down winners. The Big 3 do something similar to your scenarios above: move money around between long term losers and skim off the overround.

The things you appear to advocate (no longer sure what you're suggesting!) in turning the commission structure at b/f on it's head might make them something closer to the Big 3 model, but for now its model is miles different.

B/F as a concept is just a room, where we can meet and bet against each other. The blinding idea of b/f is its simplicity - b/f doesn't need to involve itself with numbers, or setting prices or anything like a bookie. Totally different idea. But, just like a bookie it needs a through-put of bodies and money. Unlike with a bookie, b/f doesn't have liabilities on individual accounts, but profits from all.

But you know all this.

GL.
By:
Twisp
When: 23 Sep 06 12:44
One of the big problems people seem to be agreed on is Insiders 'hoovering' up money once they know the result. Perhaps the solution to this is a different method of charging commission.

If commission was charged on the winner's stake rather than winnings it would hit the insiders harder as they are sucking up money at low odds. Losers would still pay no extra. The same 5%-2% commission structure could be kept.

Am I wrong here? Possibly missing something?
By:
luckylucas.
When: 23 Sep 06 12:46
DJ Sunset 23 Sep 12:19


why would I write to them?

"dear Bf, please put up your charges." . can't quite see myself writing that


Is that not exactly what you have done with this thread ;)
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