Fairground.  If betfair are going to reach out to countries were exchanges are banned and thus increase the liquidity and matching within the exchange, then great.

It already takes place with bookmakers using the exchange.

I'm finding more and more bets being matched at the prices I want in horses.  The volatility isn't as obvious as it was years ago, but is now there a subtle way due to their cross-matching.

turtleshead
Date Joined: 01 Jan 05
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When: 24 Jun 11 21:01
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| Topic/replies: 10,733 | Blogger: turtleshead's blog
"Btw turtle are you now sticking your head out and predicting BF shares to fall to circa 3.50?"

Maths is not your strong point, if I think they are overvalued by 50% now, that makes their correct price about £5, no?

You didn't need to be mystic meg to work out their float price was ludicrously hyped up from thin air without any basis in reality. I just wish I had known that you could sell their price on the spreads Cry


£5 a share would make Betfair a good investment imo.

AND DONT SAY THEY DO ITS CALLED THE STOCK EXCHANGE

LONDON (SHARECAST) - Betfair, the online betting exchange, is to begin searching for a new chief executive after David Yu, the current man in charge, told the board he wants to move on after 10 years at the helm.

Since launching in 2000 the firm claims to have become the largest platform for punters to test their wits against each other anywhere in the world.

Yu took the company public in October 2010 but since then shares have fallen 52% on revenues of around £340m.

The latest piece of bad news for the firm is a proposed new tax regime in Germany which would effectively prevent online betting exchanges operating from 2012. Germany currently provides Betfair with 5% of its income and the move from German regulators hints at the complicated regulatory regime all betting companies face within the EU.

"I have discussed my plans with the board and as a result, we are beginning the search for my successor. We are announcing this now so we can actively and transparently begin the process," Yu said of his departure.

"I will remain committed to delivering the best for our people and our shareholders and will give the board all possible support during the succession process,” he added.

Yu's departure is the most high profile of a string of defections this year. Other prominent executives to leave include: Mathias Entenmann, chief product and services officer; Charlie Palmer, head of mobile; Matt Carter, director of architecture, research and prototyping; Lee Cowles, director of UK sports and gaming, and Robin Osmond, chief executive of financial betting exchange LMAX.

Do Betfair have a PR dept? They've done a terrible job of fighting back against this relentless tide of doom and gloom.

Aye he did... to Betfred

Come on lads. Who on here is going to be applying.? Fess up.
Of course you'll have to put your "uccessful" punting careers on hold.
Could be a bad trade off for many of you, it would appear from posts on here.

share price finished up so I guess their results are not too bad....

yeah the share price has shot up

premium charge announced just in time , eh ?


they have a premium over the bookies but they
want to become a bookies....

Betfair's premium charge increase welcomes winners with open palms

The betting exchange claims only 500 customers will pay the new rate, but it could have an adverse affect on average punters

Nothing is guaranteed to stir up punters as much as threatening to take their winnings away, and it's no surprise that changes announced this week to Betfair's premium charge structure have been met with a mixture of outrage and transparent threats to take business elsewhere.

It's worth emphasising that only a tiny minority of Betfair's customers will be affected by the creation of a new top tier of premium charge payers – only punters who are more than £250,000 in profit on the exchange will have to pay at the new rate. Betfair estimates around 500 of their 3.8 million users will be hit.

However, everyday users of Betfaircould be indirectly affected if the increased charges mean that traders who dip in and out of many markets for small but steady profits, decide it is no longer viable to continue to use the website when faced with a tax of up to 60% on their profits.

These kind of traders play a significant role in the liquidity of many racing markets, although a statement from Betfair issued to the City, along with their latest results, suggested that any holes could in the future be plugged by the development of "an integrated exchange and sportsbook combination" – effectively an acknowledgement that Betfair believes it can operate simultaneously as bookmaker and betting exchange.

Sympathy should perhaps be limited towards premium charge-paying punters using faster picture feeds or work from the racecourse to hoover up money on in-running racing markets. Along with those colloquially described as "courtsiders" – exchange punters who have made money from trading in-running on tennis matches by heading to the tournaments and being first to the back or lay button every time – in-running racing punters who lay bets placed on fallers are often seen, even among their own, as parasites. Furthermore, those utilising computer programmes and algorithms to produce returns with minimal overheads will probably continue to operate on the same basis.

Traders who use dedicated applications, that utilise huge volumes of data to build up statistical models are presumably the customers Betfair refers to as being those "who currently pay a rate of commissions and charges that does not reflect the benefit they gain from the Betfair ecosystem".

But there are also a number of other racing punters, those who rely more heavily on their knowledge of the formbook, who will be affected by changes to the premium charge.

A Betfair punter, for example, who has made £25,000 a year over the last 10 years on racing will now have to hand over between 40 and 60% of any future profits – if he doesn't do this naturally through commission generated, then Betfair will simply debit the difference.

That seems an altogether less satisfactory conclusion, particularly as several well-known Betfair punters who have made money out of racing have reinvested in the sport through ownership.

Betfair's former promise that "winners are always welcome", quietly withdrawn when the first 20% premium charge was introduced in 2008, clearly no longer seems to apply to this group and that's a shame (although Betfair would no doubt argue that winners remain more welcome with them than with fixed-odds rivals – they just have to pay more than they did before).

"Since inception, we have provided customers with a unique and innovative product that has consistently offered them, on average, the best value on the market," read a statement from Betfair.

No arguments with those comments here. In common with many British racing punters, Betfair has transformed a large chunk of my betting activity. No restrictions; better prices; an ability to trade out and take profits before and during races. But, then, I'm not one of the "Betfair 500". A Facebook group formed to discuss the "premium charge fiasco" was alive with activity on Wednesday, with contributors calling for strikes and/or the relocation of business to ****, Betfair's biggest rival.

However, similar rallying calls have fallen on deaf ears before. The prospect of a battle between Betfair and its most successful punters may have repercussions elsewhere, not least for fixed-odds bookmakers, who could potentially expect to see some old foes attempting to return.

Proven winners are unlikely to find much in the way of a warm welcome at their door either.

Multiples?

Oh, sorry, SPORTS revenue, I see.

that wasnt what they said - ezchange to work alongside fixed odds betting for those markets that the ezchange doesnt work - the example they gave was around in play betting on some markets

Look at it from the City's point of view (because that's what bf have been doing):

Company 1, let's call them, bet3.65p say they are a profitable gaming company that shuts out skill-based winners. They're no listed but I'm sure the City wd be pleased to provide any financing they needed for expansion.

Company 2, who are listed, say they are a profitable gaming company whose model forces them to share a big portion of their proceeds w/ winners.

The City will be horrified at company 2. They will want them to limit long-term winners' share as much as possible and even move to replace them.

Bf are in the sh!t because what they've told the City over the last nine months has been incoherent and in many instances wrong-headed. They've said they can squeeze out more from clients from cross-selling--when this has just infuriated the company's most loyal customers. They've pushed the idea they are a technology, not a gaming company--when they have no one to sell the technology to w/out giving them a worse business proposition (why wd a bookie like bet3.65 need an exchange) and when they offer their most valuable commodity--accurate tissue prices--free anyway to anyone who wants to look. They have said they have growth areas such as mobile which are less compatible w/ exchange technology than with that of their fixed-odds rivals.

The company has made imv a fundamentally wrong choice in going down the route of squeezing their winners a bit tighter. They need to treat liquidity-generating market makers as suppliers, not as leeches. I don't believe they can replicate the service they offer equally well, in which case it will be off to purple for a lot of bf's casual money.

Given that they stopped taking bets from their bigger clients because it was "too risky" , can someone remind me what the other 8% is

Is it betfair Italy? Seem to remember hearing its a sportsbook over there, not sure it would make 8% though. It was suspended mid way through the year. If they have one in Italy could have others?

The volume on our risk taking Sports products increased by 34% over the year, driven by the expansion of our telephone based sportsbook service. The margin decreased from 9.0% in FY10 to 8.7% in FY11 while revenue grew by 29%. Revenue from risk taking products increased to 8% of total Sports revenues (FY10: 7%).

Askari
Nicely expressed penultimate post.
The point in the last para about treating liquidity generating market makers well is the key issue surrounding the PC.
Is the PC failing largely to do this, because it is catching "good guys " as much as it is catching " leeches ".

Betfair's flotation is full of holes

The hopes and expectations contained in Betfair's decision to list have come to little. But it can still generate plenty of cash

Betfair raised no money when it floated last year, so let's remind ourselves of the reasons the online betting exchange gave for going public. First, the directors believed the reputational benefit would help its international operations. There's no sign of progress on that front: Italian regulators have suspended one of Betfair's licences.

Second, Betfair would have "the flexibility to react to a developing and consolidating online betting and gaming industry". In other words, it would be able to buy businesses by paying in shares. In practice, it can't: investors who bought at £13 a share would protest if Betfair printed equity at 771p, Wednesday's share price.

Third, a public listing would "assist in the incentivisation and retention of key management and employees". Oh dear: chief executive David Yu said this week he wants to leave.

Fourth, flotation would "provide ongoing flexibility and liquidity for existing shareholders." Well, yes, they are free to sell shares. But big shareholders, such as SoftBank and the founders, would risk doing even more damage to the share price if they tried to offload large quantities. Flotation, then, has not done what it was supposed to.

Cue Wednesday's £50m share buy-back. In one sense, this was a welcome reminder that the company's core exchange is an impressive operation that generates lots of cash. But it also reminded investors that Betfair could afford to distribute more only if its extra-curricular activities – or "growth" projects – performed to scratch.

Some £20m has been spent on the LMAX share-betting platform and another £10m will follow. The launch is described as a "mixed success", a generous interpretation given that sign-ups are "significantly below expectations". Sports betting in the US is a more promising prospect, but it's early days. Meanwhile, European regulators continue to drag their heels on exchange betting.

Time to postpone dreams of global domination, then, and sit back and enjoy the cash-generative qualities of the core business at home? Betfair is not talking that language – but the share price might improve if it did.

The Guardian

with little risk

In our view, Betfair's updated growth strategy is effectively turning it into a conventional bookmaker over time, diluting the original exchange proposition

How has it taken them so long to realise this? We've all been saying it for donkeys.

£4 here we come.