General Betting
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22 Jul 11
00:01
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12 Mar 07
anybody on here has actualled modelled a gambling exchange operation to try to assess really what level of revenues are needed by BF ( or anybody) to operate and grow one successfully.
For example, someone else posted up the very simplistic example that a bettor on even chances with a 6% edge and a 5% comm. rate would effectively pay commissions to BF equal to 44.1% of his gross profit.
Is that a " fair " reward to BF for providing and administrating the platform and growing the betting pool ?
Of course we are all achieving different strike rates on different markets, but should this circa 40% to GP ratio be something that all of us should expect or be required to pay to BF for providing and growing the platform ?
If so ( and I'm not saying it is or isn't) then isn't that sort of what BF is trying to do with the, albeit rather convoluted and clumsily implemented, PC ?
For example, someone else posted up the very simplistic example that a bettor on even chances with a 6% edge and a 5% comm. rate would effectively pay commissions to BF equal to 44.1% of his gross profit.
Is that a " fair " reward to BF for providing and administrating the platform and growing the betting pool ?
Of course we are all achieving different strike rates on different markets, but should this circa 40% to GP ratio be something that all of us should expect or be required to pay to BF for providing and growing the platform ?
If so ( and I'm not saying it is or isn't) then isn't that sort of what BF is trying to do with the, albeit rather convoluted and clumsily implemented, PC ?
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imo, that's not the right way to look at it.
imagine BF as a barrel full of water, with holes in the bottom. the big hole in the middle is BF, the others represent winners. at the top are losers pouring in more water. BF's object is for as much money as possible to end up going through their hole as possible. the mistake comes in becoming fixated on how much is going down the other holes and trying to plug them up accordingly, rather than to look at the system holistically and figure out how different types of activity affect the volume flowing through their own hole. in other words, BF need to become less obsessed with winners' holes and pay more attention to the best interests of their own.  |
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Yu stated somewhere that they currently take 76% of their punters wallets and remember they managed to grow into a company valued at £1.5B starting from small userbase and the fact the majority of their larger players were on 2% comms. For them now to need 40%-60% they must have **** up massively somewhere along the way.
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As I've said before, and will say again, you do have a way with words Viva.
Much better than my holier than you verbal style. |
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Ghetto
You don't mean you as in me do you ? I've certainly never said anything like that. Anyway this thread is asking a question, to which I do not have the answer. I'm just wondering if anyone out there does in fact. |
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yes, there's no one who can match me when it comes to crafting a childish, innuendo-ridden metaphor.
that is my proud boast. |
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As you also said before " One does one's best ".
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i dont know about the charges, but now they are listed on stock exchange, they have to maximize there profit potential, which means all possible avenues of revenue will be exploited to max. profitible business is essential for survival of the company in the long term, financial markets coined the phrase , sweating the assets.imo
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David Yu, frog, I wouldn't dream of implying you'd said anything negative about Betfair [:(]
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It still would be sort of nice to know when the bs starts kicking in on the BF public announcements on why they are doing things as basically important to their customers, such as radically revising the pricing structure.
Some claim it is all bs, others sort of give them the benefit of the doubt. The trouble seems to be that nobody knows enough about the basic true requirements of setting up, running and expanding a gambling exchange, to give an objective, fully reasoned non-company viewpoint. |
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To thankyoumugs of course.
To Ghetto I'm neither knee jerk pro or anti. I have a fence paling right up my hole as Viva might succinctly put it. |
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as has been said before, where is the evidence of the problem this is solving?
investor posted their year on year profit figures, it's basically a continuous upwards trend. so where's the counter-evidence pointing to a crisis? |
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Viva
Profit figures don't necessarily reflect operating cash flow needs particularly projected ones. Or coming back to your current word preference, cash flow holes. The point of the thread remains unaddressed, does anybody on here really know what they are talking about in relation to the running of a gambling exchange ?. Has anybody even had the remotest of hands on experience, or has even bothered to do the remotest of serious financial modelling ? |
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also worth bearing in mind, gambling is essentially a discretionary form of spending, and disposable incomes are at an all time low.
positing anything other than continually increasing profit growth as a crisis in that environment is the mark of an unrealistic business model. |
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I thought that in time of recessions, drinking and gambling are not affected ?.
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I'm certainly trying to do my best in both these areas.
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Let's focus on the 18th century one.
That would most relevant and appropriate perhaps. None of those bothersome computer thingys to worry about. |
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You know one thought always keeps recurring to me when I read all these anti BF posters on here saying what they think BF should be doing instead of implementing the PC.
It is best summed by a famous writer who once said " For ever complex problem there is a solution which is simple, neat and wrong. " |
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Another thread full of Mr. FAFH: "Guys, it's a fair business decision" and of course it is left as an exercise to the reader to challenge the axiom.
Because: more crap being developed, less budget in advertising, larger yearly profit and others aren't enough evidence. |
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BF's object is for as much money as possible to end up going through their hole as possible. the mistake comes in becoming fixated on how much is going down the other holes and trying to plug them up accordingly, rather than to look at the system holistically and figure out how different types of activity affect the volume flowing through their own hole.
Betfair supplied the drill that bored most of the winner's holes. A sensible firm would've plugged them up and took back their drills instead of stressing out those without holes with the thought that if they ever manage to get one betfair will be looking for 40-60% of the water that flows through them. |
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Yu stated somewhere that they currently take 76% of their punters wallets a
Joe, what he meant was the average member spends 76% of his betting budget here and 24% with bookmakers and that betfair want him to spend that other 24% here. He didn't mean betfair were taking 76% of every pound deposited. |
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Option #1:
Allow punters to be fleeced. Take a cut. Punters disillusioned. Short-term profit increase. Option #2: Create an exchange which works for all. Prevent punters being fleeced. Makes a sustainable long-term platform. Long-term profit increase. Which is the best business decision? |
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Feck, I think you may be wrong there. How would he know how much customers on here spend with other bookmakers ?
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Mr.Angry
22 Jul 11 10:24 Joined: 05 Jan 11 | Topic/replies: 607 | Blogger: Mr.Angry's blog Option #1: Allow punters to be fleeced. Take a cut. Punters disillusioned. Short-term profit increase. Option #2: Create an exchange which works for all. Prevent punters being fleeced. Makes a sustainable long-term platform. Long-term profit increase. Which is the best business decision? MORE OR LESS PERFECT EXPLINATION.... now for the behavior of the winners. Winners with edge they don't think they can maintain (fast pictures eg) want option 1 (without the cut 20/40/50/60% preferably) Winners that think their edge is continuous - want option 2 The second group are more symbiotic and aligned with Betfair. and betfair are starting to realize this - and going after the parasitic extractors, and hopefully looking after the symbiotic ones. PC2 does not quite get this balance correct... but at least now Betfair understand the value of each customer... a year or few ago - they really thought big bettors big winners where good |
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I think that in answer to the main thread that has anyone create an exchange model to see what is happening now will need a pretty powerful computer to do all the number crunching that is involved with the current mega-beast company aka "Betfair".
has anyone take notice that they have said even with the old premium charge "they were only breaking even." or do you all not bother to remember the heartaches betair have and only what may hit your own pockets! the fact they make a continual profit every year is actually a rarity for new companies that are only a decade old and expanding, but marginal business is very risky and to counter the large hole that keeps getting bigger that is the big winners group, winners dont go away they keep winning and then more winners come along, its a fertile plain and there is a lot of framing going on, year in, year out, the winners make more profit combined than betfair, you can bet on that! |
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Feck, I think you may be wrong there. How would he know how much customers on here spend with other bookmakers ?
By survey Eddie? Other bookmakers were definitely mentioned. I'm sure this was brought up elsewhere and Bayes (I think) took the comment the same way I do. |
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lets transform the current problems within betfairs revenues into a more understandable model.
lets imagine betfair is a casino and they have a few poker table at the back that start a sit and go cash poker game, and for this example lets assume the casino is not a 24 hour business and ends business at 4 p.m. because of high running costs vs poor attendance at unsociable hours. in the begining of the day there are many punters around and many of them join in the games and have a good time. as the day draws along some professional players are doing quite well and have huge stacks of chips in front of them, the casino owners are very happy as they get a percentage of the chips, a rake, lets say 5% as the day turns into night more people join and the casino goes through is usual business and the top players, the sharks so to speak amass even more chips off the punters who are now thinning out. as they clock strikes four customers are told that the casino is closing and are ushered out the doors, but the sit and go poker game is reduced to a one table and the players are still intent on beating each other and winning even more money from a game now that has no new money coming in and is just a battle of nerves to keep or win more from the remaining players. the casino now has a problem, they wont make anymore money as they cannot admin anymore chips as its strict company policy not to give chips out after hours, when the manager says can you finish your game please the players insist that they want to countinue the game and wont go away till one winner wins everthing what ever they do, even though now its costing the casino an ever increasing amount to stay open and offer them a service! what should the casino do in its own interest and that of the clients? 1.....force them all to leave and risk upsetting them and losing there custom in the future. 2.....make an agreement that whoever wins the game pays a bigger percentage to the house to pay for all the service used. its betfair that has to pay all the bills and if they decide to stay in bussiness to basically let a small handful of people make a fortune continually when they are running up there own charges to do so then then they have to calculate how long they can keep this going on and apply a charge to represent what they are taking out of the business compared to what it costs betfair too operate and itself prosper. 2.....ban them |
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sorry ban them is solution option 3 not 2 in the last post
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the casino now has a problem, they wont make anymore money as they cannot admin anymore chips as its strict company policy not to give chips out after hours, when the manager says can you finish your game please the players insist that they want to countinue the game and wont go away till one winner wins everthing what ever they do, even though now its costing the casino an ever increasing amount to stay open and offer them a service!
That has to be THE stupidest analogy in the history of the written word. The simple fact is that Betfair provide a means by which punters can exchange bets with one another. It should have ZERO interest in profits of individual punters. If it turns out that some winners are draining the funds from the system too quickly then they should tweak the system to prevent that. By going down this route Betfair is no longer an Exchange (the very thing which made it successful in the first place) - it becomes a bookmaker (the very thing it was set up NOT to be). |
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mr angry your idea to tweek the system to prevent it, isnt that what the premium charge is or do you propose one that is made from magic beans and allows big players to continually drain the reserves at the same rate, you cant have it both ways!
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no analogy is perfect as its a representation of some not all the factors involved and by the way do you care to try to do better or do you want to oppose the robin hood approach of betfair to rob the rich to feed the poor as other punters would like to see betfair promote new players and give them incentives not just keep feeding the rich!
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I think everybody agrees a pricing adjustment was necessary but not one that catches dolphins in shark nets!!! By the way how is the pc giving an incentive to losing players???
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perhaps the greed you refer too is found in the bookmakers who were once black market set ups
before gambling was allowed in the uk and wont ever promote big winners to use there services they wont even tolerate them and yet make a bigger mark up then betfair. the fact is betfair is so good for punters that there is a over healthy amount of winning going on and this will need some form of control to prevent the adverse effect of revenue depletion. at least try to understand what betfair are doing and show a little intelligence in the matter. |
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the pc is giving an incentive to losing players as it indicates there are real winners on here and i think we all would like to join there ranks and 40% of something big is better than 100% of a closed door in the face and nothing
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and also 40% of the liquidity on betfair is far, far greater than the 100% of all the other exchanges combined so its a no brainer for me
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bf_fananatic
at least try to understand what betfair are doing and show a little intelligence in the matter. They did it with the PC1. With the PC2, perhaps you might show a little intelligence in the matter, fanatic. You've posted 170 times in 3-4 days, all on this matter and all saying the same sort of thing. Have you not been reading any of the replies? |
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She isn't concerned with replies , she is just trying to clutter up every thread with pro betfair BS....
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well layer when i start using my application that makes 500 plus points profit per week and you calculate what my pc payments might be in the future then you will realise that my only concern is that betfair make enough commission out of me to offset any undesirable effect my winning will have on there revenues, sorry to let you know this but I am not the christmas turkey that you like to think I am and nor are betfair!
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i have made predictions based on my current strike rate on backs and lays and given stake size matching targets in current liquidity and lets say I make 12.5 million per annum then if betfair keep 7.5 million and I get to keep the rest I will be happy
i will be happy with 10% of the figure as long as I am allowed to operate in the best exchange in the world run by the best people to run it. |
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Well stop wasting time on the forum, then and get on with it.
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