Can anyone post on the x-matching thread

By my reckoning the first and worst affected will be anyone who lays short prices- whether that's manually or with bots. Until now that has been the real IR gold mine, now it's going to get a lot harder. It's hard to foresee all of the implications though because the removal of some players should open up new opportunities. I'm sure the first to go will be the keep bet layers who offer everything at 1.5 (or whatever). They're already very marginal and this is sure to kill many of them off. To some extent that may counteract the effect of the X matcher. Let's hope so anyway.

Simple skimming isn't really the best approach to IR betting either (for various reasons), many of the skimmers already look pretty marginal to me. You have to be a bit smarter if you want to efficiently strip a decent over-round out of the market even as it is. So I'd guess that the less sophisticated skimmers will suffer quite quickly too, but I won't miss them either as that will also make space.

For me it will be a problem because when all's said and done I'm primarily a short layer, I depend on horses going shorter than they should and that will now happen less. On the other hand I don't expect it to wipe me out. I will be scaling back for a while to see how it all pans out though.

There are two basic modus operandi for setting your prices for In Running betting, whether you are positively or negatively affected will depend on which you use;

M.O. 1 - try to identify winners or losers then put in a price way below true value because you're sure you know what's going to happen, a simple example is the 1.01 override backer. This is a poor way to play because you risk throwing away value with every bet. These people will benefit from the new algorithm because it will get them a better price for more of their stake.

M.O. 2 - Try to identify prices that are out of line and then offer a price close to true value, pocketing the difference between your offer and what you're matched at as your profit. An example is someone who sees a horse being over-backed and trading at 1.3 when it should be (say) 1.6, he offers 1.5 and cleans up (in the long term at least). This is how you play if you want to win- and this is exactly the kind of player who will suffer. This is because all of those dumb ass over-ride backers using the other M.O. who are pushing the price in too quickly will be matched against other backers at 1.6, leaving our smart player not even matched at 1.5- let alone 1.3 which is what he would have got before.

In this way the X matcher evens out the advantage that good players have over bad ones and keeps the market closer to true, so it's good if you're a loser, bad if you're a winner

That's absolutely correct. You will get the best price available, but there will be fewer good prices available because the mugs will be getting better prices than they otherwise would have done, which means they won't push the price into value territory so much or so quickly.

*D U M B A S S E S

If they hit simultaneously both get 2. BF strip out any over-round, to that extent it does skim.

Now- let's say a third horse wins (happens all the time)- where has all the money gone?

After a lot on initial noise on the sports markets, I haven't read anything about the x matcher so it can't be that bad for those markets

have to disagree there - it's a pain and it takes money out the system

anyone that previously got bad prices matched will notice a massive difference

My point is just that it depends on how you define skimming. If you match 2 horses in a three horse race for a 100% book then you are effectively skimming. This is exactly what will happen in Bayes' example.

Will this affect the pre-off 1.01 layers?  Say in a 5 horse race I place a back bet for each horse at 90.  Will I get matched before the 1.01 layer?  So in effect I'm laying at a price just above 1.01?

Well going by that first race there isn't the liquidity there to provide perfect cross matching - the percentage book frequently went above 100% - I saw 120% for one split second.

Darn! I would have won in that first race. Losing favourite was matched at 1.01.

It's surprising how much of a difference those inverse odds can make, muqbil.
If this x-matcher works well for the horses, it's going to be a goldmine for the bosses.
More bets matched and a substantial slice tucked away in the back pocket on top

so would backing horses ir at 1.01 be a total no no ?

What puzzles me is why they have taken so long to introduce this - and I really think it reveolves around late NR's

If late withdrawals are in the IR market then they could be manipulated to create a losing market for the skimmer - I can only think the reopened IR market will only contain runners that have jumped off

Being cynical, birch2. Maybe it's a little bunch of flowers up the sleeve, saved for immedaitely post IPO?

fav fell there brought down fiftyonefiftyone which traded at 1.39 before being brought down! X-matching bot

I was being cynical, birch2! Having had the technology for a few years, it is interesting it has only been implemented a few weeks after the ipo.

Wee Mac When: 23 Nov 10 15:18 Plenty of potential for destination invariant funds.

It's not hard to imagine the uproar had the great man still being posting on here during the x-matching and pc eras!

I don't do horse racing, but I don't see why Betfair haven't been able to implement this before. Isn't this pretty much what's already going on in markets like Half Time Score in football.

It's obviously a good move for Betfair, because it will either force the current batch of people exploiting this to offer better prices (making the exchange more efficient / improving churn), or Betfair will take the profit themselves.

Betfair need to be careful with skimming though, surely some of the benefit should go to losing customers.

Yes, Since the PC, I've gone from having 99% of my bet volume on Betfair to 90-95%. If the PC was increased further, this would shift further. The fact that I don't get credited for a substantial balance I hold here (which betfair make huge profits on in times of high interest), as well as the substantial cross matching transactions I'm involved with has a lot to do with this.

Winners making huge profit margins is obviously sub-optimal for Betfair. High churn is good. If Betfair replace these (ridiculously) high profit margin operators with cross matching, it benefits Betfair, but it doesn't make the exchange any better. That's something Betfair should focus on more as it will indirectly increase their bottom line.