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just been notified im going to have 20% deducted from successful bets.How are you supposed to make this game pay,dont betfair want customers
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Early positive signals on regulation from the US have been offset by an expensive defeat in the Australian courts over taxation, while initial soundings from several European countries suggest that they may follow Italy and ban betting exchanges completely.
The difficulty in securing consistent overseas regulatory successes has led market watchers to predict Betfair will be forced to change its strategy outside the UK and become a traditional bookmaker, thereby taking on risk from punters rather than simply receiving a commission as the middleman. One betting industry expert said: "Betfair has £170m of cash sitting on its balance sheet, access to debt and its own shares. It is a question of when, not if, it makes an acquisition."
When asked if the company was considering furthering its overseas ambitions by bidding for a bookmaker, chief financial officer Stephen Morana replied: "I don't think we will rule anything out."
The difficulty in securing consistent overseas regulatory successes has led market watchers to predict Betfair will be forced to change its strategy outside the UK and become a traditional bookmaker, thereby taking on risk from punters rather than simply receiving a commission as the middleman. One betting industry expert said: "Betfair has £170m of cash sitting on its balance sheet, access to debt and its own shares. It is a question of when, not if, it makes an acquisition."
When asked if the company was considering furthering its overseas ambitions by bidding for a bookmaker, chief financial officer Stephen Morana replied: "I don't think we will rule anything out."
If they became a fully fledged bookmaker (in a sense they already did with the high rollers) could they be trusted on front running? I wouldn't bet on it.
I suppose that the PC is the most discussed topic on the forum, and rightly so for it represents all that is bad about big business practice both in the way that it was implemented (incompetent,after the event of establishment, customers ignored) but mostly because of the principle of charging for services provided through taking a share of profit achieved.
By operating this way, BF are effectively stating that they are operating a franchise for users. They provide the platform and the users (losers) and the winners reap the benefit of them doing so.They also ensure that minimum charges are in place through commissions and usage charges so that they still make money out of non-winners.
However, there is no formalised franchise agreement which might cover tenure of security as far as PC rate is concerned, no limitation placed on the number of new players/winners who might erode profits of the current franchisees.
This methodology continues to favour trading strategies at the expense of traditional bettors who have far fewer bets, but end up paying more as a share of profit, so its no woinder that the number of traders must grow at a faster rate than traditional players. I am with Feck on this one. Whilst traditional players don't need traders to be part of the collective user base I doubt very much that the reverse would be true. The players most likely to switch to alternatives would be traditional players providing that the closure of winning accounts can be overcome. That for me is the reason why BF is not growing organically in its older markets e.g horse racing, because the bigger players must use alternatives if at all possible rather than be penalised on here.
By operating this way, BF are effectively stating that they are operating a franchise for users. They provide the platform and the users (losers) and the winners reap the benefit of them doing so.They also ensure that minimum charges are in place through commissions and usage charges so that they still make money out of non-winners.
However, there is no formalised franchise agreement which might cover tenure of security as far as PC rate is concerned, no limitation placed on the number of new players/winners who might erode profits of the current franchisees.
This methodology continues to favour trading strategies at the expense of traditional bettors who have far fewer bets, but end up paying more as a share of profit, so its no woinder that the number of traders must grow at a faster rate than traditional players. I am with Feck on this one. Whilst traditional players don't need traders to be part of the collective user base I doubt very much that the reverse would be true. The players most likely to switch to alternatives would be traditional players providing that the closure of winning accounts can be overcome. That for me is the reason why BF is not growing organically in its older markets e.g horse racing, because the bigger players must use alternatives if at all possible rather than be penalised on here.
"This methodology continues to favour trading strategies at the expense of traditional bettors who have far fewer bets, but end up paying more as a share of profit"
Pleaese explain this theory, given the opposite would appear to make more sense.
Pleaese explain this theory, given the opposite would appear to make more sense.
That's ok feck. I just use it so I know I'm not wasting my time messaging someone.
just checking
Feck'n eejit explained it well enough earlier if you care to read back but the relevent para is this
Under the old system if you had 100 backs at 1.1 and they all won and I had 100 backs at 110.0 and one won, we'd both have the same turnover and gross profit but I'd be expected to pay up to 11 times the commission you would. The premium charge doesn't even go far enough to address that injustice as those paying it are still paying a lower percentage of their profits in commission than all other long term betfair winners.
Feck'n eejit explained it well enough earlier if you care to read back but the relevent para is this
Under the old system if you had 100 backs at 1.1 and they all won and I had 100 backs at 110.0 and one won, we'd both have the same turnover and gross profit but I'd be expected to pay up to 11 times the commission you would. The premium charge doesn't even go far enough to address that injustice as those paying it are still paying a lower percentage of their profits in commission than all other long term betfair winners.
"Explained it"?
The old system is the same as the new system as I read that is it not, if the people concerned aren't paying PC? And:
If you've a person who trades not a jot, but earns enough to pay PC, he'll end up paying ~20% of his profit to betfair. If you've someone who trades 100%, but earns enough to pay PC, he'll end up paying ~20% of his profit to betfair.
If you're use of betfair is such that you're paying > 20% to betfair DESPITE PC, well that's quite impressive.
?
The old system is the same as the new system as I read that is it not, if the people concerned aren't paying PC? And:
If you've a person who trades not a jot, but earns enough to pay PC, he'll end up paying ~20% of his profit to betfair. If you've someone who trades 100%, but earns enough to pay PC, he'll end up paying ~20% of his profit to betfair.
If you're use of betfair is such that you're paying > 20% to betfair DESPITE PC, well that's quite impressive.
?
Should really read
"If your use of betfair is such that you're paying > 20% to betfair WITHOUT PC, well that's quite impressive."
The only way that what you (sandown) quoted would make any sense is IF people not trading are actually paying in effect more than 20% of their profit anyway (and that would be impressive). This is not an 'injustice', outside of the mentallist angry tunnel vision world of Feck, it just isn't.
"If your use of betfair is such that you're paying > 20% to betfair WITHOUT PC, well that's quite impressive."
The only way that what you (sandown) quoted would make any sense is IF people not trading are actually paying in effect more than 20% of their profit anyway (and that would be impressive). This is not an 'injustice', outside of the mentallist angry tunnel vision world of Feck, it just isn't.
just checking
Sorry. Can you have another go at making your point because I don't understand what it is you are asking/saying?
Sorry. Can you have another go at making your point because I don't understand what it is you are asking/saying?
What I'm saying is that I NOT accept what you said, albeit a quote of someone else but you obviously believe it. You said:
"This methodology continues to favour trading strategies at the expense of traditional bettors who have far fewer bets, but end up paying more as a share of profit"
I do not accept this to be true. You then posted Fecks link as a justification for it being true but it doesn't appear to explain anything. It doesn't explain why trading is favoured in any way. I then give various cases of ways people might bet traind or not trading to try and explain why I don't see it as true. See?
So I ask again. WHY is trading favoured, I don't see that? WHY would a traditional better pay more commission, I don't see that? Please explain this. If anything the PC is SPECIFICALLY targeted at traders, given it's markets played criteria etc, 'traditional bettors' are less likely to be affected, and even if they are, it's on a level playing field with traders.
"This methodology continues to favour trading strategies at the expense of traditional bettors who have far fewer bets, but end up paying more as a share of profit"
I do not accept this to be true. You then posted Fecks link as a justification for it being true but it doesn't appear to explain anything. It doesn't explain why trading is favoured in any way. I then give various cases of ways people might bet traind or not trading to try and explain why I don't see it as true. See?
So I ask again. WHY is trading favoured, I don't see that? WHY would a traditional better pay more commission, I don't see that? Please explain this. If anything the PC is SPECIFICALLY targeted at traders, given it's markets played criteria etc, 'traditional bettors' are less likely to be affected, and even if they are, it's on a level playing field with traders.
This methodology continues to favour trading strategies at the expense of traditional bettors who have far fewer bets, but end up paying more as a share of profit, so its no woinder that the number of traders must grow at a faster rate than traditional players. I am with Feck on this one. Whilst traditional players don't need traders to be part of the collective user base I doubt very much that the reverse would be true. The players most likely to switch to alternatives would be traditional players providing that the closure of winning accounts can be overcome. That for me is the reason why BF is not growing organically in its older markets e.g horse racing, because the bigger players must use alternatives if at all possible rather than be penalised on here.
Cheers Sandown. It's not just the commission system that favours traders, almost everything that's bad about betfair is down to favouring traders and cheats over traditional gamblers. The interface not only deters large offers but also seems to have been designed to convey information to parasites, there are regular crashes as the bf servers attempt to deal with the multitude of requests from traders, we've got reduction factors that are based on how traders will be affected rather than attempting to map the remaining runners odds to their likely post-withdrawal odds, skewed trading figures and a trader necessitated charge that deters new customers. They're also almost begging for new tax legislation with their artificially created glut of "professional gamblers". Throw in the loss of customers due to the cheating and you've got to wonder at their sanity. It's as if they're trying to create a memorial to their pre-betfair city existence.
Cheers Sandown. It's not just the commission system that favours traders, almost everything that's bad about betfair is down to favouring traders and cheats over traditional gamblers. The interface not only deters large offers but also seems to have been designed to convey information to parasites, there are regular crashes as the bf servers attempt to deal with the multitude of requests from traders, we've got reduction factors that are based on how traders will be affected rather than attempting to map the remaining runners odds to their likely post-withdrawal odds, skewed trading figures and a trader necessitated charge that deters new customers. They're also almost begging for new tax legislation with their artificially created glut of "professional gamblers". Throw in the loss of customers due to the cheating and you've got to wonder at their sanity. It's as if they're trying to create a memorial to their pre-betfair city existence.
If they want to increase liquidity then they should decrease standard commission for the higher band payers and claw it back with
the all new liquidity generating Premium Charge = (GrossProfit - 5 * CommissionGenerated) / 2.
That would at least force the parasites to contribute a bit of liquidity.
the all new liquidity generating Premium Charge = (GrossProfit - 5 * CommissionGenerated) / 2.
That would at least force the parasites to contribute a bit of liquidity.
Whilst traditional players don't need traders to be part of the collective user base I doubt very much that the reverse would be true. The players most likely to switch to alternatives would be traditional players providing that the closure of winning accounts can be overcome. That for me is the reason why BF is not growing organically in its older markets e.g horse racing, because the bigger players must use alternatives if at all possible rather than be penalised on here.
Sandown,
Unfortunately, I think that the reason why the horse racing markets are dwindling, whereas football and tennis, say, are thriving, is that the new, younger generation of gamblers have little or no interest in racing. And why would they? It only really exists in order to provide a betting medium, and now that all the other more 'watchable' sports are open to IR betting, racing is bound to suffer.
Sandown,
Unfortunately, I think that the reason why the horse racing markets are dwindling, whereas football and tennis, say, are thriving, is that the new, younger generation of gamblers have little or no interest in racing. And why would they? It only really exists in order to provide a betting medium, and now that all the other more 'watchable' sports are open to IR betting, racing is bound to suffer.
Traders provide all the liquidity here, and anyone with a braincell knows it (ie, just about everyone except feck)
Contrarian
I'm sure that the point you make is valid. However, there are some pretty big horse racing players around (backers mainly) who can't or wont bet on here for various reasons including weak early markets, poor ante-post markets, unfavourable reduction rates,market sensitivity and of course the imposition of the premium charge. Their money is still findiong its way through alternatives such as commission agents, off-course and on-course at big meetings where sizeable bets can be taken.
I'm sure that the point you make is valid. However, there are some pretty big horse racing players around (backers mainly) who can't or wont bet on here for various reasons including weak early markets, poor ante-post markets, unfavourable reduction rates,market sensitivity and of course the imposition of the premium charge. Their money is still findiong its way through alternatives such as commission agents, off-course and on-course at big meetings where sizeable bets can be taken.
turtleshead
Its obvious that the presence of traders in abundance,backing and laying for small gains resulting from small price movements, has the effect of increasing price sensitivity and narrower spreads.But what surely what constitutes real liquidity is the amount of risk capital that is put into the site from players who are betting to an opinion. For example, Player A invests £10k on an outcome.
Say that he doesn't hedge or layoff at all. That £10k provides the means by which hundreds of traders can spread the risk around. Each trader may play £100x 100 times to generate £10,000 t/o but he will risking a tiny amount each time and so the amount of risk money involved might be tiny. To say that its traders who provide all the liquidity on here is a perverse reading of the reality.Traders spread the money provided by others and take a % for doing so. in that way they provide liquidity for smalle rplayers but never lose sight of who starts the process. As I daid, i don't think backers need traders but traders certainly need opinion players.
Its obvious that the presence of traders in abundance,backing and laying for small gains resulting from small price movements, has the effect of increasing price sensitivity and narrower spreads.But what surely what constitutes real liquidity is the amount of risk capital that is put into the site from players who are betting to an opinion. For example, Player A invests £10k on an outcome.
Say that he doesn't hedge or layoff at all. That £10k provides the means by which hundreds of traders can spread the risk around. Each trader may play £100x 100 times to generate £10,000 t/o but he will risking a tiny amount each time and so the amount of risk money involved might be tiny. To say that its traders who provide all the liquidity on here is a perverse reading of the reality.Traders spread the money provided by others and take a % for doing so. in that way they provide liquidity for smalle rplayers but never lose sight of who starts the process. As I daid, i don't think backers need traders but traders certainly need opinion players.
Just checking
Feck has explained in his last posts why the exchange is geared towards traders and why it favours trading.
I'll have a go at providing you with some figures which might help.
Take 2 players, both with the same EV - lets say £15k over 1000 bets for £100 staked each time.
player A bets on 10.0 shots. He will average a profit of £15k but it will vary considerably because of variance at the 10.0 level.He could make £35k or he could lose £5k. that's the resultr of randomness at the level of probability that he plays at.At 5% commission the amount deducted will be around £5-£6k whatever his final profit.Its unlikely that he will ever have to pay PC because his deductions will invariably greater than the 22% of profit set by BF. So the introduction of PC doen't really effect him. He is always paying substantially more than 22% to BF.
Now player B is a trader who ends up with a very high strike rate because he greens up a lot. He too should make on average £15k but pre PC his average commission paid would have been around £1k. So pre PC BF's terms favoured traders. Since PC the amount of PC paid would bring the deductions up to 22% of profit but because of the low variance he will rarely if ever be in the psotion of paying more than 22%, unlike player A.
Feck has explained in his last posts why the exchange is geared towards traders and why it favours trading.
I'll have a go at providing you with some figures which might help.
Take 2 players, both with the same EV - lets say £15k over 1000 bets for £100 staked each time.
player A bets on 10.0 shots. He will average a profit of £15k but it will vary considerably because of variance at the 10.0 level.He could make £35k or he could lose £5k. that's the resultr of randomness at the level of probability that he plays at.At 5% commission the amount deducted will be around £5-£6k whatever his final profit.Its unlikely that he will ever have to pay PC because his deductions will invariably greater than the 22% of profit set by BF. So the introduction of PC doen't really effect him. He is always paying substantially more than 22% to BF.
Now player B is a trader who ends up with a very high strike rate because he greens up a lot. He too should make on average £15k but pre PC his average commission paid would have been around £1k. So pre PC BF's terms favoured traders. Since PC the amount of PC paid would bring the deductions up to 22% of profit but because of the low variance he will rarely if ever be in the psotion of paying more than 22%, unlike player A.
Feck
I'm resigned to the only conclusion possible which is that BF was set up by traders, for traders and is run by people who only identify with trading and not with backing an opinion. To the extent that the early claims suggested otherwise, action since has shown that those claims have been confined to the dustbin of history. We are where we are and I, like you and others like us, who have an opinion and are prepared to back it, must make most of our dough through traditional channels. BF is still an excellent product but it could have been so much better.It's a shame, but there it is. This forum is 90% against you because that surely represents the MO of the user base.For what its worth, I agree with virtually every opinion you have - on gambling anyway - but you are pis**ng in the wind, I fear.
I'm resigned to the only conclusion possible which is that BF was set up by traders, for traders and is run by people who only identify with trading and not with backing an opinion. To the extent that the early claims suggested otherwise, action since has shown that those claims have been confined to the dustbin of history. We are where we are and I, like you and others like us, who have an opinion and are prepared to back it, must make most of our dough through traditional channels. BF is still an excellent product but it could have been so much better.It's a shame, but there it is. This forum is 90% against you because that surely represents the MO of the user base.For what its worth, I agree with virtually every opinion you have - on gambling anyway - but you are pis**ng in the wind, I fear.
Sandown, why is it that you and everyone like feck who claims traders get such a great deal always refer to ones with a fantastic strike rate, do ones not exist who have a poor one
Face facts, pc affects EVERYONE with excellent strike rates full stop, it matters not one jot whether you "trade" or not!
Face facts, pc affects EVERYONE with excellent strike rates full stop, it matters not one jot whether you "trade" or not!
Player A 5-6k? He doesn't pay commission on losing bets and only pays it on winning bets, where does this come from?
Is that your 'experience'?
Player B 1k? I'm not sure there's many traders out there would make 15k and only pay 1k on it, that sounds extremely efficient. And of course if keeps on at it he'll get clobbered by PC.
But let's ASSUME the above figures are correct, let's move onto the other part, where is the supposed 'injustice'? You've just said PC shouldn't affect the non trading player, so PC isn't not injust on them.
BF is a level playing field, it has fair rules, and as long as nobody is e.g. exploiting a bug, people are surely free to adopt whatever strategy they can dream up, no different to laying the draw or looking in their tea leaves while singing Dolly Parton if that helps. If a person can get their bet matched securely and efficiently, that's where his interest should end. It's not as if the odds are on an island and this is the only game in town, the odds on BF will change as external odds on the internet change, that's for sure, feel free to go where you like to place your 'traditional' bet.
The strategies employed by others and what others are doing is none of a persons damned business as long as they're not abusing a bug or such. One man placing a bet and another man laying a bet isn't doing anything wrong merely because of what bet they intend to do say a while later, that's just bl00dy mental. Think about it. At this point it just becomes envy and sticking your nose into other people's business and getting annoyed. Given Fecks hard left 'issues' this should be no surprise given their bizarre feeling of righteousness, of a god given right to tell others what to do and instinctive hatred of anyone they feel are doing better than them, but to grown ups who realise we're all individuals with respect for each other it shouldnt be an issue.
That's the insanity of these threads, the bizarre 'moral highground' some people seem to think they're taking, though you (Sanddown) come across as quite reasonable so don't take that personally. BF has a system, it's there for you to use, it's a level playing field for everyone from the unqualified to the PhD. The commission is NOT exhorbitant and if you think it is, the world is full of bookies catering to simple traditional bets. If others are somehow making things work better for them here than you, well .. welcome to life.
Is that your 'experience'?
Player B 1k? I'm not sure there's many traders out there would make 15k and only pay 1k on it, that sounds extremely efficient. And of course if keeps on at it he'll get clobbered by PC.
But let's ASSUME the above figures are correct, let's move onto the other part, where is the supposed 'injustice'? You've just said PC shouldn't affect the non trading player, so PC isn't not injust on them.
BF is a level playing field, it has fair rules, and as long as nobody is e.g. exploiting a bug, people are surely free to adopt whatever strategy they can dream up, no different to laying the draw or looking in their tea leaves while singing Dolly Parton if that helps. If a person can get their bet matched securely and efficiently, that's where his interest should end. It's not as if the odds are on an island and this is the only game in town, the odds on BF will change as external odds on the internet change, that's for sure, feel free to go where you like to place your 'traditional' bet.
The strategies employed by others and what others are doing is none of a persons damned business as long as they're not abusing a bug or such. One man placing a bet and another man laying a bet isn't doing anything wrong merely because of what bet they intend to do say a while later, that's just bl00dy mental. Think about it. At this point it just becomes envy and sticking your nose into other people's business and getting annoyed. Given Fecks hard left 'issues' this should be no surprise given their bizarre feeling of righteousness, of a god given right to tell others what to do and instinctive hatred of anyone they feel are doing better than them, but to grown ups who realise we're all individuals with respect for each other it shouldnt be an issue.
That's the insanity of these threads, the bizarre 'moral highground' some people seem to think they're taking, though you (Sanddown) come across as quite reasonable so don't take that personally. BF has a system, it's there for you to use, it's a level playing field for everyone from the unqualified to the PhD. The commission is NOT exhorbitant and if you think it is, the world is full of bookies catering to simple traditional bets. If others are somehow making things work better for them here than you, well .. welcome to life.
just checking
My figures come from a model using a spread sheet which i look to answer "what if" questions. Its perfectly understandable that without seeing that you might question the veracity.
As for moral high ground, that's not my beef. I haven't used the word "injustice" I don't think. If I did I take it back. I'm not concerned about the MO's of different players but BF should be, purely from a commercial standpoint. Any charging system will have flaws and biases and that's a reality. Trying to get to a point where every MO pays the same rate is what BF have attempted with the PC and it levels up to some degree as I have explained. Don't you think that 2 people on the same bus should pay the same fare for the same journey if they are sitting in similar seats? Why should one who gets off every stop and then gets back on, pay less? May not be the best metaphor but its late.
My figures come from a model using a spread sheet which i look to answer "what if" questions. Its perfectly understandable that without seeing that you might question the veracity.
As for moral high ground, that's not my beef. I haven't used the word "injustice" I don't think. If I did I take it back. I'm not concerned about the MO's of different players but BF should be, purely from a commercial standpoint. Any charging system will have flaws and biases and that's a reality. Trying to get to a point where every MO pays the same rate is what BF have attempted with the PC and it levels up to some degree as I have explained. Don't you think that 2 people on the same bus should pay the same fare for the same journey if they are sitting in similar seats? Why should one who gets off every stop and then gets back on, pay less? May not be the best metaphor but its late.
Well said, JC. I'm fed up with imbeciles and morons who continually make out traders (whatever they are or however they are defined!) somehow get to make vast sums of money at just about zero risk with no effort or skill and pay sod all as a result, so somehow betfair have to charge pc to compensate!
SO WHY DONT YOU DO IT YOURSELVES IF IT'S SO SIMPLE
SO WHY DONT YOU DO IT YOURSELVES IF IT'S SO SIMPLE
Sanddown: "I haven't used the word "injustice" I don't think"
It was the essence of the second half of the quote you gave and is a general 'theme' which I thought you said were pretty much in agreement with. "The premium charge doesn't even go far enough to address that injustice as those paying it are still paying a lower percentage of their profits in commission than all other long term betfair winners."
I know it's not your words but you know what I mean!
It was the essence of the second half of the quote you gave and is a general 'theme' which I thought you said were pretty much in agreement with. "The premium charge doesn't even go far enough to address that injustice as those paying it are still paying a lower percentage of their profits in commission than all other long term betfair winners."
I know it's not your words but you know what I mean!
jimmy
What's the equivalent of "the naughty step" for foul-mouthed pensioners?
What's the equivalent of "the naughty step" for foul-mouthed pensioners?
Come on, all you "trader" bashers, why don't you tell everyone why you can't do the same, and see huge risk free sums just flow into your account with no effort or bother and paying betfair next to nothing for the priviledge, it doesn't make sense?!? 
i am a traditional bettor had very few bets per week but because of my success rate it didnt take long to reach the premium charge.the guy said to me you reached it in november,but you must of had a losing streak and then went quiet.i had no problem getting my bets matched and i thought that was how betfair worked.i have no problem how people make there money but for a traditional bettor there is no value anymore in betfair,and since the premium charge i have not had a bet.all i can say is this is simalar to a bookmaker who shutdowns successful punters and the amounts you are allowed to win as a traditional bettor on betfair are simalar to bookmakers.
steve, can you please explain why there is no value anymore on Betfair for traditional punters ?
I'd also like to know why you don't bet here anymore as per definition if you are paying PC, you have to do very well on here.
Just to clearify, I'm against the PC and think it's a disgrace and the biggest mistake Betfair has ever done. It's just that I find your statements very strange.
And Betfair isn't shutting you down as traditinal bookmakers do, Betfair just want a bigger slice of your winnings if you are successful enough to fall into the PC payer category.
I'd also like to know why you don't bet here anymore as per definition if you are paying PC, you have to do very well on here.
Just to clearify, I'm against the PC and think it's a disgrace and the biggest mistake Betfair has ever done. It's just that I find your statements very strange.
And Betfair isn't shutting you down as traditinal bookmakers do, Betfair just want a bigger slice of your winnings if you are successful enough to fall into the PC payer category.
Come on, all you "trader" bashers, why don't you tell everyone why you can't do the same, and see huge risk free sums just flow into your account with no effort or bother and paying betfair next to nothing for the priviledge, it doesn't make sense?!?
Would you not be better asking the traders why, if they think they're so hard done by, they don't just gamble and pay 40 or 50% of their profits in commission seeing as how they're apparently convinced this is less than 20%?
Would you not be better asking the traders why, if they think they're so hard done by, they don't just gamble and pay 40 or 50% of their profits in commission seeing as how they're apparently convinced this is less than 20%?
Sandown, I agree I'm p1ssing in the wind just now but I won't always be. I was told much the same thing years ago when I suggested it was only a matter of time before they introduced something along the lines of the premium charge. The introduction of that showed that betfair's city boys at least acknowledged that the providers of the famous "liquidity" would be unable to provide their famous "liquidity" elsewhere. Some day they'll realise what I'm saying about the interface is true also although you'd think 10 years of tumbleweed early markets would've rammed that home by now.
JC, if the exchange was run as a series of private price auctions with commission set at 1% of winnings on every individual bet (not market) that would be a level playing field. Would you be in favour of that level playing field?
Feck, ther would be no market makers if the 1 % of every individual bet was introduced.
Eddie, would they be needed in private price auctions. Market makers are just middlemen as well.
Feck N. Eejit
27 Feb 11 11:35 Joined: 10 Jan 02 | Topic/replies: 2,947 | Blogger: Feck N. Eejit's blog
Come on, all you "trader" bashers, why don't you tell everyone why you can't do the same, and see huge risk free sums just flow into your account with no effort or bother and paying betfair next to nothing for the priviledge, it doesn't make sense?!?
Would you not be better asking the traders why, if they think they're so hard done by, they don't just gamble and pay 40 or 50% of their profits in commission seeing as how they're apparently convinced this is less than 20%?
But, as far as I can tell, none of us traders are moaning about how hard we have it, and how easy it would be to make money taking bets that run to expiry. Whereas you're constantly complaining that the traders are able to perform simple tricks that are tantamount to theft.
27 Feb 11 11:35 Joined: 10 Jan 02 | Topic/replies: 2,947 | Blogger: Feck N. Eejit's blog
Come on, all you "trader" bashers, why don't you tell everyone why you can't do the same, and see huge risk free sums just flow into your account with no effort or bother and paying betfair next to nothing for the priviledge, it doesn't make sense?!?
Would you not be better asking the traders why, if they think they're so hard done by, they don't just gamble and pay 40 or 50% of their profits in commission seeing as how they're apparently convinced this is less than 20%?
But, as far as I can tell, none of us traders are moaning about how hard we have it, and how easy it would be to make money taking bets that run to expiry. Whereas you're constantly complaining that the traders are able to perform simple tricks that are tantamount to theft.
Contrarian
I really believe that there needn't and shouldn't be civil war between players with different MO's. It would be in everyone's interests if the site was offering the best for every different type of player but as Feck pointed out in his
post at 26 Feb 11 17:45, the site doen't work as well for traditional players as it does for traders or for that matter IR players and/or those clever people who have found that the site has encouraaged automated betting.
I, for one, would love to have an A/P market that could take bigger bets without collapsing.
I would love to play early sometimes but the reduction method is anathema to me and I have yet to experience it working in my favour, ever.
I would love to be able to play without having to drip feed.
So I don't play heavily on here at all.And there will be hundreds of others who think the same way.
The expensive IT superstructure is there for the benefit of the automated players who must make huge demands on the system compared to the minute demands of trad players yet the pricing system favours the former at the expense of the latter.And given the increased ratio of winners to losers Feck is right to point out the risk that somewhere in the tax authorities will be taking a close peep.
I have no problem with "trading" as such - other than it makes the market even more efficient - and nor do I have a problem with the profits made by anyone because for me they represent a function that BF would provide - and do I suppose with cross-matching - so I don't see traders as "the enmey" at all.Good luck to the IR players like aye robot, and people like yourself and The Management, Investor etc - all are very clever people and I wouldnt want to compete with them directly.
But I just know that there is a huge amount of money that is not finding its way onto the site for the reasons outlined.That's why its in BF's interests to sort this out. If they do become traditional bookies, you can bet your life that account closures would follow soon after so that's not the solution for me either.
I really believe that there needn't and shouldn't be civil war between players with different MO's. It would be in everyone's interests if the site was offering the best for every different type of player but as Feck pointed out in his
post at 26 Feb 11 17:45, the site doen't work as well for traditional players as it does for traders or for that matter IR players and/or those clever people who have found that the site has encouraaged automated betting.
I, for one, would love to have an A/P market that could take bigger bets without collapsing.
I would love to play early sometimes but the reduction method is anathema to me and I have yet to experience it working in my favour, ever.
I would love to be able to play without having to drip feed.
So I don't play heavily on here at all.And there will be hundreds of others who think the same way.
The expensive IT superstructure is there for the benefit of the automated players who must make huge demands on the system compared to the minute demands of trad players yet the pricing system favours the former at the expense of the latter.And given the increased ratio of winners to losers Feck is right to point out the risk that somewhere in the tax authorities will be taking a close peep.
I have no problem with "trading" as such - other than it makes the market even more efficient - and nor do I have a problem with the profits made by anyone because for me they represent a function that BF would provide - and do I suppose with cross-matching - so I don't see traders as "the enmey" at all.Good luck to the IR players like aye robot, and people like yourself and The Management, Investor etc - all are very clever people and I wouldnt want to compete with them directly.
But I just know that there is a huge amount of money that is not finding its way onto the site for the reasons outlined.That's why its in BF's interests to sort this out. If they do become traditional bookies, you can bet your life that account closures would follow soon after so that's not the solution for me either.
And I forgot to add that the PC makes the choice between backing on here and backing elsewhere a bit of a no brainer.
But, as far as I can tell, none of us traders are moaning about how hard we have it,
and how easy it would be to make money taking bets that run to expiry. Whereas you're constantly complaining that the traders are able to perform simple tricks that are tantamount to theft.
Cut and paste one place where I said that. Shouldn't be hard if I say it constantly.
and how easy it would be to make money taking bets that run to expiry. Whereas you're constantly complaining that the traders are able to perform simple tricks that are tantamount to theft.
Cut and paste one place where I said that. Shouldn't be hard if I say it constantly.
Feck N. Eejit Joined: 10 Jan 02
Replies: 2950 27 Feb 11 12:43
Eddie, would they be needed in private price auctions. Market makers are just middlemen as well.
That seals it for me regarding you Feck. Up until now I have had some symphaty for some of your arguments, but saying that market makers on an exchange is just unneccessarry middlemen is so far from the truth that you obviously haven't got a clue !
Replies: 2950 27 Feb 11 12:43
Eddie, would they be needed in private price auctions. Market makers are just middlemen as well.
That seals it for me regarding you Feck. Up until now I have had some symphaty for some of your arguments, but saying that market makers on an exchange is just unneccessarry middlemen is so far from the truth that you obviously haven't got a clue !
Eddie,
Feck biggest problem is in comprehending that market making is itself a risky activity.
Feck biggest problem is in comprehending that market making is itself a risky activity.
He obviously struggle to see that, but I happen to think that his biggest problem is that he is unable to see that other exchange users( also hounrable straight punters) may want to use the exchange in adifferent way than himself do.
That seals it for me regarding you Feck. Up until now I have had some symphaty for some of your arguments, but saying that market makers on an exchange is just unneccessarry middlemen is so far from the truth that you obviously haven't got a clue !
That seals it for me regarding you Eddie. You obviously have no idea what a price auction is. Maybe you think there are market makers on the tote.
That seals it for me regarding you Eddie. You obviously have no idea what a price auction is. Maybe you think there are market makers on the tote.
And once again we find ourselves back in the "traders are needed on quiet markets" territory. The lack of liquidity in quiet markets is provided by the traders. It's no wonder it's known as the famous liquidity.
Feck,
I was referring to your complaints about traders exercising their 'market maker advantage'.
I was referring to your complaints about traders exercising their 'market maker advantage'.
So what is it you're saying contrarian? It isn't an advantage or it's hard to understand?
Feck , I most certainly know what a price auction is. I just happen to think it would be exstremely stupid for an betting exchange to introduce it and it will never happen no matter how much you advertise it.
feck, do you want to make changes to b/fair because you are struggling to make money the way it operates now.....or is there another reason?
Sandown,
But suppose that a commission structure were introduced that favoured traditional positional players over traders (eg 1% of each transaction), what do you think would happen to the IR markets? I know that Feck believes that they wouldn't be any less liquid (in fact, presumably he thinks that liquidity would actually increase), but you don't think this do you?
But suppose that a commission structure were introduced that favoured traditional positional players over traders (eg 1% of each transaction), what do you think would happen to the IR markets? I know that Feck believes that they wouldn't be any less liquid (in fact, presumably he thinks that liquidity would actually increase), but you don't think this do you?
iz, he doesn't yse this site for betting anymore. He is a full time forumite.
I'm sorry if this is wrong Feck, but you said a while ago you hadn't had a bet on here for ages. You may have started betting here again though ?
I'm sorry if this is wrong Feck, but you said a while ago you hadn't had a bet on here for ages. You may have started betting here again though ?
If you do then you'll know market makers wouldn't have the same importance. As regards whether it will ever happen, we'll see. The defeatist attitude last5minutes.com's boffins have on early markets (which you clearly agree with) illustrates the fact they're totally lacking in innovation.
I know that Feck believes that they wouldn't be any less liquid (in fact, presumably he thinks that liquidity would actually increase),
Incorrect. Liquidity would certainly decrease.
Incorrect. Liquidity would certainly decrease.
One of your bigger problem Feck is that all your "solutions" are based on your betting style.
I'm guessing that mostly is backing horses priced @ 10/1 or less.
For most other sports and horse backers at long odds your solutions would be devastating.
I'm guessing that mostly is backing horses priced @ 10/1 or less.
For most other sports and horse backers at long odds your solutions would be devastating.
feck, do you want to make changes to b/fair because you are struggling to make money the way it operates now.....or is there another reason?
iz, the current interface deters liquidity and makes it too much hassle getting a decent sized bet on. In fact early on it makes it too much hassle to get a bet of any size on.
iz, the current interface deters liquidity and makes it too much hassle getting a decent sized bet on. In fact early on it makes it too much hassle to get a bet of any size on.
Feck,
Why don't you just build a drip-feeding bot?
It's really not that hard.
Why don't you just build a drip-feeding bot?
It's really not that hard.
It's not me I'm talking about contrarian. There should be an automatic (server side) drip feeder.
Contrarian
I can see that a 1% charge on all transactions might have something of a negative effect, to say the least, for all who trade using bots, for sure.
I'm sure that BF believe that the PC is the best option or the least worst at least. But they crossed a line using profits and it has destroyed all trust, a high price to pay, and the LT consequences are still to be felt.
Surely it doesn't make sense to lose the big backers? Even the BM's recognise the importance of the big hitters - they don't all win for sure and LB's profits are especially sensitive to these players as are VC's.
And you have to admit that the biggest chunk of overhead is tied into the mega transactions model yet that is not reflected anywhere to the advantage of those who do not place those demands on the system.
I can see that a 1% charge on all transactions might have something of a negative effect, to say the least, for all who trade using bots, for sure.
I'm sure that BF believe that the PC is the best option or the least worst at least. But they crossed a line using profits and it has destroyed all trust, a high price to pay, and the LT consequences are still to be felt.
Surely it doesn't make sense to lose the big backers? Even the BM's recognise the importance of the big hitters - they don't all win for sure and LB's profits are especially sensitive to these players as are VC's.
And you have to admit that the biggest chunk of overhead is tied into the mega transactions model yet that is not reflected anywhere to the advantage of those who do not place those demands on the system.
I can see that a 1% charge on all transactions might have something of a negative effect, to say the least, for all who trade using bots, for sure.
Obviously, this 1% charge would kill trading. I have a margin of less than 0.5% turning over 7 figures every month.
If such a system was introduced I would still be able to profit though. I'd just get a tiny fraction of bets matched relative to what I get now.
Under this 1% system, any winner needs a large margin, which is bad for all leisure punters (and in that way minimises the price advantage betfair has over traditional bookies. If the spread is still small, say 2.00-2.02, and the odds are fair, everyone getting bets matched loses, paying 1% for each transaction.
If I'm confident the correct price is 2.00, I'll be a layer at 1.98. If I had to lay at 1.97 or 1.96 (as would everyone else trying to profit), Betfair's competititive pricing advantage erodes and the whole point of using an exchange dissappears for many.
Fair price: 2.01. Best bookie price: 2.00. In a highly liquid market, you'll get layers willing to go to 2.00. Trading around their position to get passed the commission hurdle rate.
It's foolish to think that it's a good thing if this 'middleman' is not there, and the spread is 1.98-2.04.
You might argue that it won't necessarily be that wide, as gamblers will meet each other in the middle, but only people that actually expect to profit will provide volume. Leasure punters will take a price that is there more often than offer.
If Betfair created a commission structure that incentivised straight betting instead of trading, that's what I'd do. As it currently encourages trading, that's what I'm doing. Pretty simple really, and I think it makes sense. The tighter the spreads, the better for Betfair and leisure punters.
Obviously, this 1% charge would kill trading. I have a margin of less than 0.5% turning over 7 figures every month.
If such a system was introduced I would still be able to profit though. I'd just get a tiny fraction of bets matched relative to what I get now.
Under this 1% system, any winner needs a large margin, which is bad for all leisure punters (and in that way minimises the price advantage betfair has over traditional bookies. If the spread is still small, say 2.00-2.02, and the odds are fair, everyone getting bets matched loses, paying 1% for each transaction.
If I'm confident the correct price is 2.00, I'll be a layer at 1.98. If I had to lay at 1.97 or 1.96 (as would everyone else trying to profit), Betfair's competititive pricing advantage erodes and the whole point of using an exchange dissappears for many.
Fair price: 2.01. Best bookie price: 2.00. In a highly liquid market, you'll get layers willing to go to 2.00. Trading around their position to get passed the commission hurdle rate.
It's foolish to think that it's a good thing if this 'middleman' is not there, and the spread is 1.98-2.04.
You might argue that it won't necessarily be that wide, as gamblers will meet each other in the middle, but only people that actually expect to profit will provide volume. Leasure punters will take a price that is there more often than offer.
If Betfair created a commission structure that incentivised straight betting instead of trading, that's what I'd do. As it currently encourages trading, that's what I'm doing. Pretty simple really, and I think it makes sense. The tighter the spreads, the better for Betfair and leisure punters.
The Investor
The mindset of the average backer or layer,albeit recreational or pro, is very different to your way of looking at things.
There is no way i could be confident (at least on horses) to .02 on an evens chance. I would be neither a backer or layer just because of a difference of 0.4 in the spread.I have to work to higher margins (of confidence) in order to play and I would expect that to be true for others.
It makes no real difference to me whether I end up backing at 1.98 or 2.02 because if I'm backing at that price its because I'm clear in my own mind that its chance is more like 1.5. If I can get my bet on at 1.98 but not at 2.02 then I'm not too much bothered.
That's the difference. I have spent time on the race, I have a good knowledge of the merits of each horse given the conditions, the tactics and I am confident that the uncertaintiities are down to a minimum. If they are not, then I won't play for a marginal price gain and probably not for a major price difference unless I can leverage the price significantly.
The fact that BF may or may not offer a better price than with BM's is really neither here nor there for me. Of course I will take it if it is, who wouldn't. But can i get on at the level I want? if I do, will I influence the market too much? Can I find others who will get money on under the radar? Am I confident that I know something that the market doesn't or do I have a time line edge? these are much more important considerations.
For a pro, the only real advantage with BF is that you don't get your account closed if you win. That's it really.
It seems to me that BF have set their stall out to encourage your MO. OK, I have to live with that.You benefit. That's obvious.But the unintended consequence is that they are missing out on the really big hitters (not me now)who are quite happy to risk 10's of £000 or more on a single race.So, its to your detriment too because that would give you even more opportunity to cream off a % on the churn.
The mindset of the average backer or layer,albeit recreational or pro, is very different to your way of looking at things.
There is no way i could be confident (at least on horses) to .02 on an evens chance. I would be neither a backer or layer just because of a difference of 0.4 in the spread.I have to work to higher margins (of confidence) in order to play and I would expect that to be true for others.
It makes no real difference to me whether I end up backing at 1.98 or 2.02 because if I'm backing at that price its because I'm clear in my own mind that its chance is more like 1.5. If I can get my bet on at 1.98 but not at 2.02 then I'm not too much bothered.
That's the difference. I have spent time on the race, I have a good knowledge of the merits of each horse given the conditions, the tactics and I am confident that the uncertaintiities are down to a minimum. If they are not, then I won't play for a marginal price gain and probably not for a major price difference unless I can leverage the price significantly.
The fact that BF may or may not offer a better price than with BM's is really neither here nor there for me. Of course I will take it if it is, who wouldn't. But can i get on at the level I want? if I do, will I influence the market too much? Can I find others who will get money on under the radar? Am I confident that I know something that the market doesn't or do I have a time line edge? these are much more important considerations.
For a pro, the only real advantage with BF is that you don't get your account closed if you win. That's it really.
It seems to me that BF have set their stall out to encourage your MO. OK, I have to live with that.You benefit. That's obvious.But the unintended consequence is that they are missing out on the really big hitters (not me now)who are quite happy to risk 10's of £000 or more on a single race.So, its to your detriment too because that would give you even more opportunity to cream off a % on the churn.
Well, the only reason I have this MO is that Betfair encourages it. Due to PC, I fall more in between gambler and trader now, again because the charging structure encourages me to do so. I arb, but also take on more risk in my positions.
I benefit from high liquidity. It means lower margins for me, but the increase in turnover oustrips that.
I think I missed something regarding your big hitter example. What's stopping them now? Paying too much commission on their winnings? Perhaps liquidity would improve if instead Betfair uppped PC to 30% and charged everyone a flat rate of 1% commission. I'd prefer they didn't though
I benefit from high liquidity. It means lower margins for me, but the increase in turnover oustrips that.
I think I missed something regarding your big hitter example. What's stopping them now? Paying too much commission on their winnings? Perhaps liquidity would improve if instead Betfair uppped PC to 30% and charged everyone a flat rate of 1% commission. I'd prefer they didn't though
Investor
I believe I covered that in my posts of 13.29 and 13.31
I believe I covered that in my posts of 13.29 and 13.31
Thanks Sandown.
I don't do horse racing. I'm contributing to it through PC, but that's another matter.
http://markxdavies.blogspot.com/2010/06/premium-charge-and-levy.html
Allowing customers to win is therefore important to the success of the business, but it cannot be done in a way which costs the business money. Successful punters (who, incidentally, are not necessarily the same group of people year in, year out) have to win from someone, which means that Betfair needs to provide a never-ending stream of customers who contribute to the liquidity of the pool.
So, Betfair's business model is that it makes sure that it markets to a fast-growing customer base, and keeps the money circulating in the system. The longer the money stays in the system, the more often Betfair clips the ticket. Betfair's aim is therefore to keep the money in the system for as long as possible.
This suggets that an incentive to keep money in the system would be beneficial.
I've often said that there is a big difference between a PC paying customer with a £3k balance making and withdrawing £1k a week, and a PC paying customer with a £100k balance, making £1k a week and increasing their balance withdrawing nothing, in order to make more.
Draining of liquidity doesn't take place when money is won, it takes place when it is withdrawn. Unfortunately for me, Betfair does not make that distinction.
Effectively what I am suggesting is very similar to the suggestion of Feck and others to refund PC if somone has a big loss. Except in this case instead of a refund it is deferred and in the case of a big loss, written off as charges go above 20%.
I'm not sure I get it regarding your example of someone not placing large bets in horse racing due to the commission structure. In football people place massive bets all the time. Leisure punters aren't too price sensitive (in that they actually look for best price). They'll respond to general stuff like 'we guarantee to be best price' or 'up to 20% better than other bookies', but won't be actively seeking the best price on every bet specifically.
The best thing for people who want to place large fun bets is to have a tight spread at decent odds increments.
Perhaps Betfair could make everyone happy by charging the lesser of 1% on turnover or your normal commission. I doubt any increase in liquidity would offset the loss of earnings for bf though!
I don't do horse racing. I'm contributing to it through PC, but that's another matter.
http://markxdavies.blogspot.com/2010/06/premium-charge-and-levy.html
Allowing customers to win is therefore important to the success of the business, but it cannot be done in a way which costs the business money. Successful punters (who, incidentally, are not necessarily the same group of people year in, year out) have to win from someone, which means that Betfair needs to provide a never-ending stream of customers who contribute to the liquidity of the pool.
So, Betfair's business model is that it makes sure that it markets to a fast-growing customer base, and keeps the money circulating in the system. The longer the money stays in the system, the more often Betfair clips the ticket. Betfair's aim is therefore to keep the money in the system for as long as possible.
This suggets that an incentive to keep money in the system would be beneficial.
I've often said that there is a big difference between a PC paying customer with a £3k balance making and withdrawing £1k a week, and a PC paying customer with a £100k balance, making £1k a week and increasing their balance withdrawing nothing, in order to make more.
Draining of liquidity doesn't take place when money is won, it takes place when it is withdrawn. Unfortunately for me, Betfair does not make that distinction.
Effectively what I am suggesting is very similar to the suggestion of Feck and others to refund PC if somone has a big loss. Except in this case instead of a refund it is deferred and in the case of a big loss, written off as charges go above 20%.
I'm not sure I get it regarding your example of someone not placing large bets in horse racing due to the commission structure. In football people place massive bets all the time. Leisure punters aren't too price sensitive (in that they actually look for best price). They'll respond to general stuff like 'we guarantee to be best price' or 'up to 20% better than other bookies', but won't be actively seeking the best price on every bet specifically.
The best thing for people who want to place large fun bets is to have a tight spread at decent odds increments.
Perhaps Betfair could make everyone happy by charging the lesser of 1% on turnover or your normal commission. I doubt any increase in liquidity would offset the loss of earnings for bf though!
So, Betfair's business model is that it makes sure that it markets to a fast-growing customer base, and keeps the money circulating in the system. The longer the money stays in the system, the more often Betfair clips the ticket. Betfair's aim is therefore to keep the money in the system for as long as possible.
The bulk of the money going out of the system is down to cheating and trading both of which would be extremely difficult without betfair's assistance.
The bulk of the money going out of the system is down to cheating and trading both of which would be extremely difficult without betfair's assistance.
I'm not sure I get it regarding your example of someone not placing large bets in horse racing due to the commission structure.
It's generally not down to the commission (although a starting rate of 5% regardless of size of stake doesn't help). It's down to an interface that virtually guarantees that putting a large bet into the system will merely chase the price away from it.
In football people place massive bets all the time.
Football odds are a lot less volatile. Horse odds would be a lot less volatile too if we didn't have an interface that allowed people to practically monopolise the take on triers and non-triers.
It's generally not down to the commission (although a starting rate of 5% regardless of size of stake doesn't help). It's down to an interface that virtually guarantees that putting a large bet into the system will merely chase the price away from it.
In football people place massive bets all the time.
Football odds are a lot less volatile. Horse odds would be a lot less volatile too if we didn't have an interface that allowed people to practically monopolise the take on triers and non-triers.
In football people place massive bets all the time.
Question is, are they letting them stand, or they trying to force the price down a couple of ticks so that they can trade out with a profit?
Surely, any large football punter who wants their bet to stand would be better off using a BM where no PC is paid. VC built his business up through generating large Chinese football backers. There is far less risk of insider knowledge with football than there is with horse racing so layers are less vulnerable to coups.
As Feck says, horse racing markets are far more volatile and the players are more savvy and wary of market movements because of the insider angle.
Question is, are they letting them stand, or they trying to force the price down a couple of ticks so that they can trade out with a profit?
Surely, any large football punter who wants their bet to stand would be better off using a BM where no PC is paid. VC built his business up through generating large Chinese football backers. There is far less risk of insider knowledge with football than there is with horse racing so layers are less vulnerable to coups.
As Feck says, horse racing markets are far more volatile and the players are more savvy and wary of market movements because of the insider angle.
just a quick question ,,,when you pay the pc , do you pay say 4.9% of your winnings when the bets are settled and then another 15.1% every wednesday ?ty
no, it's a bit more complicated than that daves.
But dave has the bsaics right. Betfair take on wednesday the amount needed to get you to 20% commission generated which for most is closer to 22 % commission paid depending on your commission rate and strike rate that week.
Eddie, I worked out how to arb optimally to avoid PC (I think).
I'm on 3% commission, which means I pay 21.5% of GP to Betfair regardless of the ratio of commission paid to implied commission (that's not true for anyone on a higher or lower comm rate). Provided of course, I don't have a loss that takes me over 20% charges generated.
Now let's say I have an arb where I can back a selection at 2.00 with a bookie for £1,000, and lay on Betfair at 1.95.
My question is, what would the optimal stake be on Betfair? Obviously, the answer is not to stake in such a way that your profit is split so you make the same amount whatever happens, as you have a very strong preference to lose on Betfair. This means you'll be happy to give up some winnings if you lose on Betfair, and conversely, you'll need to win a lot more if you win on Betfair to cover PC.
I think I've done the math correctly, but the outcome is a bit counterintuitive.
It basically says that if I do a series of arbs (for the sake of simplicity they will either all win or all lose in this example) I will prefer a scenario where I lose £10,000 on Betfair and win £9,500 with the bookies to one where I win £10,000 on Betfair and lose £9,500 with the bookies and so I should skew my stakes accordingly.
Over a large series of arbs you may not need to worry about this too much, but if some arbs are much bigger in stake than others, it can make sense to find a way to stake optimally.
I'm on 3% commission, which means I pay 21.5% of GP to Betfair regardless of the ratio of commission paid to implied commission (that's not true for anyone on a higher or lower comm rate). Provided of course, I don't have a loss that takes me over 20% charges generated.
Now let's say I have an arb where I can back a selection at 2.00 with a bookie for £1,000, and lay on Betfair at 1.95.
My question is, what would the optimal stake be on Betfair? Obviously, the answer is not to stake in such a way that your profit is split so you make the same amount whatever happens, as you have a very strong preference to lose on Betfair. This means you'll be happy to give up some winnings if you lose on Betfair, and conversely, you'll need to win a lot more if you win on Betfair to cover PC.
I think I've done the math correctly, but the outcome is a bit counterintuitive.
It basically says that if I do a series of arbs (for the sake of simplicity they will either all win or all lose in this example) I will prefer a scenario where I lose £10,000 on Betfair and win £9,500 with the bookies to one where I win £10,000 on Betfair and lose £9,500 with the bookies and so I should skew my stakes accordingly.
Over a large series of arbs you may not need to worry about this too much, but if some arbs are much bigger in stake than others, it can make sense to find a way to stake optimally.
Sandown
Date Joined: 06 Dec 01
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When: 28 Feb 11 11:05
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| Topic/replies: 672 | Blogger: Sandown's blog
In football people place massive bets all the time.
Question is, are they letting them stand, or they trying to force the price down a couple of ticks so that they can trade out with a profit?
Surely, any large football punter who wants their bet to stand would be better off using a BM where no PC is paid. VC built his business up through generating large Chinese football backers. There is far less risk of insider knowledge with football than there is with horse racing so layers are less vulnerable to coups.
As Feck says, horse racing markets are far more volatile and the players are more savvy and wary of market movements because of the insider angle.
You would think that what you say is true: "Surely, any large football punter who wants their bet to stand would be better off using a BM where no PC is paid." I assume you mean take whatever bookie offers the bets price, rather than using a single bookie for all bets. However, you're approaching the problem from the perspective of someone who knows what they're doing.
From a purely rational point of view: if you don't know what you're doing, you're going to lose your money and shouldn't be placing large bets. If you do know what you're doing, and this is reflected in your returns, all the British bookies will turn away your business, confining you to the exchanges, where you will maximize returns by trading.
Basically the bookies are saying give us £1 and we'll give you back a fraction of £1 because we know our prices better than you do. On the off chance that you are very good at betting we'll turn away your business.
Date Joined: 06 Dec 01
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When: 28 Feb 11 11:05
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Date Joined: 06 Dec 01
| Topic/replies: 672 | Blogger: Sandown's blog
In football people place massive bets all the time.
Question is, are they letting them stand, or they trying to force the price down a couple of ticks so that they can trade out with a profit?
Surely, any large football punter who wants their bet to stand would be better off using a BM where no PC is paid. VC built his business up through generating large Chinese football backers. There is far less risk of insider knowledge with football than there is with horse racing so layers are less vulnerable to coups.
As Feck says, horse racing markets are far more volatile and the players are more savvy and wary of market movements because of the insider angle.
You would think that what you say is true: "Surely, any large football punter who wants their bet to stand would be better off using a BM where no PC is paid." I assume you mean take whatever bookie offers the bets price, rather than using a single bookie for all bets. However, you're approaching the problem from the perspective of someone who knows what they're doing.
From a purely rational point of view: if you don't know what you're doing, you're going to lose your money and shouldn't be placing large bets. If you do know what you're doing, and this is reflected in your returns, all the British bookies will turn away your business, confining you to the exchanges, where you will maximize returns by trading.
Basically the bookies are saying give us £1 and we'll give you back a fraction of £1 because we know our prices better than you do. On the off chance that you are very good at betting we'll turn away your business.
Investor
I'm wondering why there appear to be no "whales" on BF i.e. those punters with massive wealth who are prepared to punt huge amounts on games of chance in casinos or on sports where it is very hard to find an edge, and football has to rate in that category unless you have widespread contacts feeding you team news. VC clearly is making enough out of these folk to more or less run down his horse racing interests other than to the really big players. Laddies made I think £60m off these types the year before last.
I believe that they are put off for the reasons I and Feck have stated.
I'm wondering why there appear to be no "whales" on BF i.e. those punters with massive wealth who are prepared to punt huge amounts on games of chance in casinos or on sports where it is very hard to find an edge, and football has to rate in that category unless you have widespread contacts feeding you team news. VC clearly is making enough out of these folk to more or less run down his horse racing interests other than to the really big players. Laddies made I think £60m off these types the year before last.
I believe that they are put off for the reasons I and Feck have stated.
Why do you think there are no "whales" on Betfair. Surely many football and tennis matches have enough liquidity to accomadate them.
Eddie
I'm not sure whether the big bets you see, if you see them, in those markets are left standing or whether they are traded. If they are traded I wouldn't call the players "whales". Can you enlighten me?
I'm not sure whether the big bets you see, if you see them, in those markets are left standing or whether they are traded. If they are traded I wouldn't call the players "whales". Can you enlighten me?
you regularly see 5 figure bets in football, and some of them are very unlikely to be tick trades. in the run up to prem KOs it's not uncommon to see a big bet take out everything for three or four ticks and the price recover over the next minute or two.
As viva said, there surely are some huge bets taken. I don't know by who or what their paln is with those bets, but you are the one who said that there appear to be no whales on Betfair so I'd say you are the one who must enlighten us.
One reason why you won't get large A/P bets on BF on horse racing is because of the NRNB option available now with BM's on Cheltenham. Why take the risk (as a backer)for perhaps a marginal price advantage on here? The biggest betting meeting of the year and the markets are moribund.
Ok if you are talking about horse racing as I know close to nothing about betting on horses on here, but I'm pretty sure you have plenty of "whales" on here betting on sports wheater it's football, tennis or any other with the liquidity required.
How much are we talking? £500,000 on a Premier League team to win a match or something?
Sandown, obviously if someone wants to place a truly ridiculously large bet, they will be constricted by the liquidity available on Betfair.
As you may be aware Betfair did trial a 'high roller segment':
High Roller segment
During the first quarter of the year, Betfair ran a trial service with a small number of ‘‘High Roller’’
customers. The size and scale of the betting patterns of these customers is too large to be fully hedged
through the Betting Exchange and so Betfair has necessarily accepted proprietary risk on these bets.
The trial with High Roller customers proved to be profitable, but the volatility of returns from such
customers is such that Betfair has now decided not to proceed with this product offering for the
foreseeable future.
Revenue from the High Roller segment during the first quarter was approximately £25 million and
EBITDA was approximately £7 million. The results will be reported as a separate segment in FY11 and
have been excluded from Core Betfair revenue for the quarter stated above.
.
http://corporate.betfair.com/
investor-relations/~/media/Files/B/
Betfair/pdf/Betfair-Prospectus.PDF
Pay special attention to: The size and scale of the betting patterns of these customers is too large to be fully hedged. Which means they want a bet that is so large that there isn't enough cash in the exchange to accomodate them. This is part of the way Betfair is designed and this would still be the case under a tax on turnover system.
Betair's margins are much smaller than traditional exchanges, however their risk is zero. When a person/company is getting money risk free, seeking risk is less attractive.
So it's not the case that these whales are worried about commission and stuff like that (you get people betting £100k+ on the spin of a roulette wheel), they just want to be able to get their bets on. So if anything, Betfair needs more liquidity providers to accomodate these players (where I classify liquidity providers as people offering bets [at reasonable odds] for fun bettors to match).
As you may be aware Betfair did trial a 'high roller segment':
High Roller segment
During the first quarter of the year, Betfair ran a trial service with a small number of ‘‘High Roller’’
customers. The size and scale of the betting patterns of these customers is too large to be fully hedged
through the Betting Exchange and so Betfair has necessarily accepted proprietary risk on these bets.
The trial with High Roller customers proved to be profitable, but the volatility of returns from such
customers is such that Betfair has now decided not to proceed with this product offering for the
foreseeable future.
Revenue from the High Roller segment during the first quarter was approximately £25 million and
EBITDA was approximately £7 million. The results will be reported as a separate segment in FY11 and
have been excluded from Core Betfair revenue for the quarter stated above.
.
http://corporate.betfair.com/
investor-relations/~/media/Files/B/
Betfair/pdf/Betfair-Prospectus.PDF
Pay special attention to: The size and scale of the betting patterns of these customers is too large to be fully hedged. Which means they want a bet that is so large that there isn't enough cash in the exchange to accomodate them. This is part of the way Betfair is designed and this would still be the case under a tax on turnover system.
Betair's margins are much smaller than traditional exchanges, however their risk is zero. When a person/company is getting money risk free, seeking risk is less attractive.
So it's not the case that these whales are worried about commission and stuff like that (you get people betting £100k+ on the spin of a roulette wheel), they just want to be able to get their bets on. So if anything, Betfair needs more liquidity providers to accomodate these players (where I classify liquidity providers as people offering bets [at reasonable odds] for fun bettors to match).
And obviously the premium charge is a huge barrier to people putting up decent amounts in ante post markets, cheers betfair!
interesting stuff The Investor.
it would be interesting to know what people class as high rollers/big bets. someone looking to get 100K on the football tonight could have done it pretty quickly and not sacrificed more than a tick or two.
it would be interesting to know what people class as high rollers/big bets. someone looking to get 100K on the football tonight could have done it pretty quickly and not sacrificed more than a tick or two.
I find it hard to think of anyone being restricted on some matches.
Unless there's a whole load of mill players out there cursing their luck at not getting fully matched on BF and crawling off to pinns. If you're putting that much down you're getting a bad hand. Who cares where it's at?
Unless there's a whole load of mill players out there cursing their luck at not getting fully matched on BF and crawling off to pinns. If you're putting that much down you're getting a bad hand. Who cares where it's at?
http://2.bp.blogspot.com/-G77qhAHEsvs/TW2SuLu6SmI/AAAAAAAAA0o/sn4kQehT6xw/s1...
as a brief example, the overround on the real game tonight is currently 100.1%. any whale wanting to back real could have 250K+ on without moving the market one tick atm.
if they were prepared to sacrifice half a tick overall, they could have half a million on in one lump, without having to drip any of it in.
if they were prepared to sacrifice half a tick overall, they could have half a million on in one lump, without having to drip any of it in.
The liquidity on the Spanish games recently has been amazing. I make more on these games than anything else.
433K at 1.17 currently.
seen 20K matched in spanish sending off markets this season.
seen 20K matched in spanish sending off markets this season.
Contrarian
Date Joined: 19 May 03
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When: 03 Mar 11 18:56
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The liquidity on the Spanish games recently has been amazing. I make more on these games than anything else.
Me too. Only with RM or Barcelona involved though. much less on other Spanish games.
Date Joined: 19 May 03
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When: 03 Mar 11 18:56
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Date Joined: 19 May 03
| Topic/replies: 551 | Blogger: Contrarian's blog
The liquidity on the Spanish games recently has been amazing. I make more on these games than anything else.
Me too. Only with RM or Barcelona involved though. much less on other Spanish games.
SPORTSBOOK REVIEW NEWSWIRES
Betfair suspends player account and debits €32,000 in premium fees
12/26/2010 12:49:50 PM
Betfair (SBR rating A) has charged a player €32,000 in premium fees. On December 2nd, the player's account was suspended. On December 15th, Betfair reopened the account after debiting the player's account for what it said was "suspicion of premium charges evasion". The player states that he has only bet in 150 markets over the last 4 months, and therefor should not have to pay the assessed fee. Betfair justified its seizure to the player by stating that he and four other accounts from his country made similar market bets. The player denies having any relationship with the other four account holders. Betfair responded to SBR's request for comment by stating the following:
Betfair:
Unfortunately, as before, I am unable to comment on the specifics of any such case (though hopefully this won't lead to you to the conclusion that the players version is always true) where fraud may be an issue.
Some general points that may help you here though
We have a premium charge that is payable by a very small proportion of our customers. Some customers may try to avoid paying the premium charge by structuring their betting in a particular way. If we find a customer has tried to do this, then we deduct the relevant premium charge from their accounts in accordance with our terms and conditions. All those liable to the premium charge are made aware of these terms and conditions.
Betfair suspends player account and debits €32,000 in premium fees
12/26/2010 12:49:50 PM
Betfair (SBR rating A) has charged a player €32,000 in premium fees. On December 2nd, the player's account was suspended. On December 15th, Betfair reopened the account after debiting the player's account for what it said was "suspicion of premium charges evasion". The player states that he has only bet in 150 markets over the last 4 months, and therefor should not have to pay the assessed fee. Betfair justified its seizure to the player by stating that he and four other accounts from his country made similar market bets. The player denies having any relationship with the other four account holders. Betfair responded to SBR's request for comment by stating the following:
Betfair:
Unfortunately, as before, I am unable to comment on the specifics of any such case (though hopefully this won't lead to you to the conclusion that the players version is always true) where fraud may be an issue.
Some general points that may help you here though
We have a premium charge that is payable by a very small proportion of our customers. Some customers may try to avoid paying the premium charge by structuring their betting in a particular way. If we find a customer has tried to do this, then we deduct the relevant premium charge from their accounts in accordance with our terms and conditions. All those liable to the premium charge are made aware of these terms and conditions.
I guess this buries every speculation of getting away with not paying the charge by using family and/or friends accounts as I would assume this guy probably opened accounts in persons names that isn't related to him and I also assume he somehow managed to use different ip-addresses.
They get you just on betting patterns !
They get you just on betting patterns !
So they can just assume that people who bet in a simmilar way have to be the same, and that they can just swipe the money without providing any proof? lmao, I somehow doubt that would stand up in court, hope the guy gets a good lawyer!
First the bad news: customers who love the Betfair website and want a stake in the company's future success will not be allowed to buy shares in the float.
Chief executive David Yu says they thought about allowing retail punters a slice of the pie but decided the “logistics” of such an operation made it not worth the hassle. So while large institutions will get to buy into the company, the rest of us will have to wait until the shares start trading before we can place our bets.
For a consumer-facing business, one that can reasonably claim to have shaken-up a tired industry in the public interest, this is a disappointing call.
Doubtless it would be expensive and fiddly to set aside shares specifically for small investors but not impossible. Google, another internet company with which Betfair would doubtless like to be compared, managed it with seeming ease, earning kudos along the way as an outfit willing to defy Wall Street in favour of the little man.
Betfair's decision suggests a slight lack of care for the customers that have made it the undoubted triumph it is.
In turn, this is how the company could be weakened. Asked what was to stop a rival — Ladbrokes, say — from hiring a bunch of computer whizzkids, devising copy-cat technology and launching a service called, let's say, GambleSmart, the Betfair bosses more or less replied: nothing at all.
They reckon that over the course of the past 10 years many such rival ventures have tried and failed to eat Betfair's lunch.
Yu told me: “We've seen about 50 exchanges come and go. Every single one of them copied the format. The brutal reality is that it is incredibly difficult to do.”
Perhaps. But one side effect of the float is that Betfair now has to make available a huge amount of information about itself that it could previously keep under wraps.
That information — including numbers about sales and profits — is likely to prove mouth-watering to wannabe competitors.
Somewhere in the mind of a net entrepreneur exists the company that will do to Betfair what Betfair did to traditional bookies.
The company is perfectly aware of this. Indeed, one purpose of the float, albeit of just 10% of the shares, is to give Betfair a currency to retain and attract talent. In an industry moving as quickly as this one, it may well need it.
In the meantime, where is the growth coming from?
The company was today flagging a move into online financial trading via an exchange platform called LMAX.
Punters will be able to take positions on financial markets via contracts for difference.
It might work, but this is already a well-populated field for the present size of the market.
A whole new customer base needs to appear for it to thrive.
Such gripes aside, Betfair has clearly been a huge success story. The future is harder to predict.
Chief executive David Yu says they thought about allowing retail punters a slice of the pie but decided the “logistics” of such an operation made it not worth the hassle. So while large institutions will get to buy into the company, the rest of us will have to wait until the shares start trading before we can place our bets.
For a consumer-facing business, one that can reasonably claim to have shaken-up a tired industry in the public interest, this is a disappointing call.
Doubtless it would be expensive and fiddly to set aside shares specifically for small investors but not impossible. Google, another internet company with which Betfair would doubtless like to be compared, managed it with seeming ease, earning kudos along the way as an outfit willing to defy Wall Street in favour of the little man.
Betfair's decision suggests a slight lack of care for the customers that have made it the undoubted triumph it is.
In turn, this is how the company could be weakened. Asked what was to stop a rival — Ladbrokes, say — from hiring a bunch of computer whizzkids, devising copy-cat technology and launching a service called, let's say, GambleSmart, the Betfair bosses more or less replied: nothing at all.
They reckon that over the course of the past 10 years many such rival ventures have tried and failed to eat Betfair's lunch.
Yu told me: “We've seen about 50 exchanges come and go. Every single one of them copied the format. The brutal reality is that it is incredibly difficult to do.”
Perhaps. But one side effect of the float is that Betfair now has to make available a huge amount of information about itself that it could previously keep under wraps.
That information — including numbers about sales and profits — is likely to prove mouth-watering to wannabe competitors.
Somewhere in the mind of a net entrepreneur exists the company that will do to Betfair what Betfair did to traditional bookies.
The company is perfectly aware of this. Indeed, one purpose of the float, albeit of just 10% of the shares, is to give Betfair a currency to retain and attract talent. In an industry moving as quickly as this one, it may well need it.
In the meantime, where is the growth coming from?
The company was today flagging a move into online financial trading via an exchange platform called LMAX.
Punters will be able to take positions on financial markets via contracts for difference.
It might work, but this is already a well-populated field for the present size of the market.
A whole new customer base needs to appear for it to thrive.
Such gripes aside, Betfair has clearly been a huge success story. The future is harder to predict.
http://www.thisislondon.co.uk/standard-business/article-23880625-this-not-so-fair-float-might-come-back-to-haunt-betfair.do
21 Sep 2010
21 Sep 2010
We've seen about 50 exchanges come and go. Every single one of them copied the format.
Which is why they never amounted to anything. The blind leading the blind imo.
Which is why they never amounted to anything. The blind leading the blind imo.
it's in BF's interest to propagate the idea that copying what they do is technically very hard. plainly that's not true.
what's difficult is to make it commercially viable in an environment where there's an established de facto monopoly.
what's difficult is to make it commercially viable in an environment where there's an established de facto monopoly.
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