General Betting
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03 Jul 11
15:47
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Date Joined:
10 Jan 02
As the objective is to squeeze more cash out of winning clients a very small percentage transaction based charge related to total profits and win rate would have been my solution so that only profitable clients that fit the criteria face the charges.
I should start by saying that having no transaction charges is essential for beginners and newbies and in general but if someone is making too much money without offering enough in return(in Bfs view) it is a far better tool to reduce profits, where the detail can be honed to target the right individuals. It has several advantages...
1. You can discriminate between markets for instance
.......... Such that markets where there is no liquidity or poor liquidity don't incur transaction charges.
........... Markets that provide easy money for fast pic merchants do incur premium charges.
........... Strategic markets don't incur transaction charges.
........... Long term markets incur transaction charges.
........... High churn backwards and forwards markets do incur transaction charges
2. It would even up the balance between gamblers and traders.
3. It would be harder to avoid.
4. Much better PR as there would be no sense that the company was stealing your profits.
5. With each bet placed you'd know where you stood, currently you don't
6. There would be none of this anti gambling sequential nonsense.
I should start by saying that having no transaction charges is essential for beginners and newbies and in general but if someone is making too much money without offering enough in return(in Bfs view) it is a far better tool to reduce profits, where the detail can be honed to target the right individuals. It has several advantages...
1. You can discriminate between markets for instance
.......... Such that markets where there is no liquidity or poor liquidity don't incur transaction charges.
........... Markets that provide easy money for fast pic merchants do incur premium charges.
........... Strategic markets don't incur transaction charges.
........... Long term markets incur transaction charges.
........... High churn backwards and forwards markets do incur transaction charges
2. It would even up the balance between gamblers and traders.
3. It would be harder to avoid.
4. Much better PR as there would be no sense that the company was stealing your profits.
5. With each bet placed you'd know where you stood, currently you don't
6. There would be none of this anti gambling sequential nonsense.
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Your 1 to 6 would be desirable Clydebank but finding a fair transaction (turnover) charge that fits isn't easy as it has a much more severe effect when you're staking large to win small as compared to staking small to win big.
anything that deters people from making multiple bets in a market is a non-starter imo.
I would agree with that although that doesn't mean a turnover type charge that doesn't deter multiple bets isn't possible.
'Deters' to me is less the issue than 'charges'. A charge of this kind cd be pitched on a market-by-market basis at a level where it still invites participation (or doesn't strangle liquidity) but wh/ in theory does away w/ any need for a super pc.
Though anyway I don't believe the new pc is anything to do w/ bf breaking even on the entirety of some clients' activity.
Though anyway I don't believe the new pc is anything to do w/ bf breaking even on the entirety of some clients' activity.
true feck, but the transaction charge could be set up as a percentage of profit as opposed to turnover.
viva that is why it would be very small. It would need to set at such a level not to deter people from making multiple bets.
viva that is why it would be very small. It would need to set at such a level not to deter people from making multiple bets.
true feck, but the transaction charge could be set up as a percentage of profit as opposed to turnover.
Per bet do you mean? Again that leads to problems and deters multiple bets per market. e.g. consider an 8 horse race with all runners at 8.0 and consider backing 7 as opposed to laying the other one.
Per bet do you mean? Again that leads to problems and deters multiple bets per market. e.g. consider an 8 horse race with all runners at 8.0 and consider backing 7 as opposed to laying the other one.
If you were laying 7 of the runners it would be the same as backing the other. Turning it on its head I can see the problem, albeit I think that it's an odd scenario. I think a market maker is much more likely to be looking to lay the field rather than back the field and if they were one of those affected by the charge then they should clearly just concentrate on laying the other one.
The system offers flexibility in so far as different tariffs can be attributed to different markets. In general I would think the larger the field size the lower the tariff or indeed zero tariff. Key strategic markets like the Grand National for instance I would expect there to be no tariff. There would be no tariff on early prices up to 30 minutes before the off perhaps
The system offers flexibility in so far as different tariffs can be attributed to different markets. In general I would think the larger the field size the lower the tariff or indeed zero tariff. Key strategic markets like the Grand National for instance I would expect there to be no tariff. There would be no tariff on early prices up to 30 minutes before the off perhaps
so if i lay the field repeatedly, keeping the overround sub 101% and thus ensuring BF's prices are more competitive and their losing punters lose more slowly (therefore paying proportionately more commission), why should i pay more than someone who just has one large bet, picking off the value and taking the book to 103%?
Would make drip feeding on a horse expensive, but the flip side is it could encourage people to put up bigger orders. Would be very difficult to price correctly across all markets.
Bayes I had intened it to be a percentage charge, although there is perhaps scope to lower it with the size of the offer (I say perhaps because I wouldnt be sure how to differntiate between part matched and then cancelled bets) I admit it is complicated and is not ideal but is still better than what there is. The initial Premium Charge took 2 years to formulate and then another year before it was changed.
You wouldnt be paying more viva as it would be a percentage charge, except in the anomaly feck pointed out which I dont see a way round
You wouldnt be paying more viva as it would be a percentage charge, except in the anomaly feck pointed out which I dont see a way round
It should be possible to work out a reasonable formula that charges based on the minimum number of transactions required to arrive at a position in a market.
Users would know their maximum (straight transaction charge per bet) and be rebated as a "bonus" after the event if there was an easier way to get to their position with the prices they took.
Users would know their maximum (straight transaction charge per bet) and be rebated as a "bonus" after the event if there was an easier way to get to their position with the prices they took.
Do you mean a cost per bet placed as in the existing transaction charge?
I dont know how the existing transaction charge works as it was never going to affect me.
My initial thinking was a very small percentage transaction charge based on potential winnings
My initial thinking was a very small percentage transaction charge based on potential winnings
This kind of discussion is, of course, exactly what Betfair want, because it deflects attention from the real issue. Let's face it, their revenues are already 250 million. They built a 750 million pound business without having to fleece the winners. For a company that has previously been risk averse (they stopped laying the high rollers) they are taking a big punt that they have called this one right.
Oh, I see. The existing transaction charge is 1p per bet placed but the first 1000 bets per hour are free. It's offset against commission so if you generate enough in the hour you incur the charges to pay for the excess transactions then you remain unaffected. It is aimed at bots that place lots of bets that don't stand much hope of being matched.
My bot can place many thousands of bets on a long term market like the fa cup and yet I may only make £30 on the winner. How would your charge affect me in this scenario?
My bot can place many thousands of bets on a long term market like the fa cup and yet I may only make £30 on the winner. How would your charge affect me in this scenario?
They built a 750 million pound business on the back of the same people they are now shafting. They didnt flece them because they needed them.
you would be fooked!
Transaction charges go against tight spreads and efficient markets. cant see the need for anything complicated just a straight tax on profits must work as good as anything
Transaction charges go against tight spreads and efficient markets. cant see the need for anything complicated just a straight tax on profits must work as good as anything
How about something like 5% per market then brendan? We could give a discount for bigger users down to, oh, let's say 2% for the really big guys.
Almost ridiculously, they phoned me up a couple of weeks ago to try to get me to market make on their failing LMAX site. Barefaced cheek really.
Did they explain what it was Bayes? I've googled it and read the forum and still haven't got a clue what it actually is.
brendanuk1 Joined: 12 Jan 02
Replies: 15742 03 Jul 11 21:31
you would be fooked!
Transaction charges go against tight spreads and efficient markets.
--------
exactly.
Replies: 15742 03 Jul 11 21:31
you would be fooked!
Transaction charges go against tight spreads and efficient markets.
--------
exactly.
the charge would be less than the spread between price increments
I think it's a financials site where if you can accurately price a market up then you get the retail punters betting against you and if you're good enough you make a profit. For providing the platform, LMAX make a small commission charge. Sound familiar?
the bit about phoning you up to market make on the LMAX site
bayes - did they offer you anything to do it, or was it "would you mind awfully..."?
Ok, that's kind of the impression I got. I couldn't work out why I'd use them and not a conventional site with infinite liquidity I guess, as I imagine all the big boys would be trading against me anyway.
(Wasn't a deliberate leading question though it turned out that way)
and yes, as CB says, it's shocking. Especially as we know where it will end...
(Wasn't a deliberate leading question though it turned out that way)
and yes, as CB says, it's shocking. Especially as we know where it will end...
Bit like when they suggested to me that I might like to seed their Exchange Games. Was the lowest of low margins (after their 2.5%)with very high variance but I spent about 5 months developing, then a couple of months running it, before....
yes, you guessed it, they jumped in front of me with their own money (without any prior warning)
yes, you guessed it, they jumped in front of me with their own money (without any prior warning)
Yeah, I remember that one.
Spent quite a bit of time working out how the maths worked on the Virtual Racing before realising a) it wasn't doing what they claimed and b) there was small print saying along the lines of "We probably won't do this, but if we deem there's not enough liquidity we might put our own money up"
Of course, nobody cracked the formula (because they didn't include all the parts in the game so it was uncrackable) so they had nobody to copy and had to bin it.
Spent quite a bit of time working out how the maths worked on the Virtual Racing before realising a) it wasn't doing what they claimed and b) there was small print saying along the lines of "We probably won't do this, but if we deem there's not enough liquidity we might put our own money up"
Of course, nobody cracked the formula (because they didn't include all the parts in the game so it was uncrackable) so they had nobody to copy and had to bin it.
LMAX is their own version of a "futures market" (they even have the classics: DAX, EuroStoxx50, Dollar, GBP ... but with neutral names to avoid legal problems)
Of course winners will end up paying a 60% commission, so I guess most will stick to their current brokers to trade the EuroStoxx50
Of course winners will end up paying a 60% commission, so I guess most will stick to their current brokers to trade the EuroStoxx50
Cheers saint, that dawned on me halfway through the reply to bayes that you probably hadn't seen.
Can somebody tell me what niche or gap in the mkt.LMAX is designed to fill ?
In futures markets you need a minimum amount of money to bet.
Dax: around 12000-13000 euros per contract plus about 30% reserves for potential trend movements against your bet.
EuroStoxx50: around 3000 euros per contract plus ...
In LMAX you can play with much smaller quantities ... and therefore attract small fishes. If any small fish wins: 60% commission.
And the small fish will learn that a round trip per contract in the EuroStox can be as low as 7 euros regardless of the win per contract and will leave the 60% LMAX site.
Dax: around 12000-13000 euros per contract plus about 30% reserves for potential trend movements against your bet.
EuroStoxx50: around 3000 euros per contract plus ...
In LMAX you can play with much smaller quantities ... and therefore attract small fishes. If any small fish wins: 60% commission.
And the small fish will learn that a round trip per contract in the EuroStox can be as low as 7 euros regardless of the win per contract and will leave the 60% LMAX site.
Bayes.
Date Joined: 13 Sep 05
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When: 03 Jul 11 21:32
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Date Joined: 13 Sep 05
| Topic/replies: 485 | Blogger: Bayes.'s blog
Almost ridiculously, they phoned me up a couple of weeks ago to try to get me to market make on their failing LMAX site. Barefaced cheek really.
That's right, they need to you to provide liquidity. But if your successful you'll be told you pay less in commission than it costs them to service you.
Date Joined: 13 Sep 05
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When: 03 Jul 11 21:32
Joined:
Date Joined: 13 Sep 05
| Topic/replies: 485 | Blogger: Bayes.'s blog
Almost ridiculously, they phoned me up a couple of weeks ago to try to get me to market make on their failing LMAX site. Barefaced cheek really.
That's right, they need to you to provide liquidity. But if your successful you'll be told you pay less in commission than it costs them to service you.
Bayes.
03 Jul 11 21:21
This kind of discussion is, of course, exactly what Betfair want, because it deflects attention from the real issue. Let's face it, their revenues are already 250 million. They built a 750 million pound business without having to fleece the winners. For a company that has previously been risk averse (they stopped laying the high rollers) they are taking a big punt that they have called this one right.
I totally agree.
Betfair has continued to grow both revenues and earnings from the exchange every year, but sadly their expenses has grown in roughly the same tempo. That is however imo mostly due to their affection for exchange games and all other non exchange stuff.
03 Jul 11 21:21
This kind of discussion is, of course, exactly what Betfair want, because it deflects attention from the real issue. Let's face it, their revenues are already 250 million. They built a 750 million pound business without having to fleece the winners. For a company that has previously been risk averse (they stopped laying the high rollers) they are taking a big punt that they have called this one right.
I totally agree.
Betfair has continued to grow both revenues and earnings from the exchange every year, but sadly their expenses has grown in roughly the same tempo. That is however imo mostly due to their affection for exchange games and all other non exchange stuff.
How about Mr Rangagajec buying WBX and launching them in Australia?
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