General Betting
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31 Jul 11
12:11
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Date Joined:
15 Apr 02
Betfair is a basically a business that exists by sitting between the traditional betting industry over rounds and the true 100% book.
It is a brilliant concept and has revolutionised the betting industry. Never has a punter had a better chance of making a profit.
But, its market is limited - there is a finite interest in say the 3.30 from Fontwell so it's ability to make a middleman profit from the over round in the the race is restricted.
Maybe saturation point is close or has even been reached?
How can you encourage ever more people to bet ever increasing amounts to grow the business?
Widen worldwide access to the exchange? - Many countries are now saying 'No' to BF operating within their borders.
Punters have more knowledge - Wider access to the internet and odds checking sites have increased punter awareness and squeezed industry wide over rounds thus reducing the margin within which Betfair exists.
Maybe the pure betting exchange as an ever expanding business model is flawed? - Its target market is just too limited.
There are also plenty of mouths demanding their own piece of this (no longer growing?) cake :-
- Punters must get better odds (after commission) - this is paramount or the whole concept becomes pointless
-' Business' users want a return on their investment (time and risk)
- Company overheads
- Betting Levy and Taxes
- Possible Government Licence
- Profit for shareholders
So if BF are struggling to increase top line revenues from their core business - How can they can grow profits?
Expand into other areas? - Casinos /Poker etc/Multiples - Problem - No unique selling point in these areas.
Cut costs? - Move off shore to cut tax - (How long before the voluntary levy payments cease?)
BF have tried the above, now they feel it's time to increase its own share of this finite middleman cake by charging more to certain types of customers.
If you can't grow the cake - you need to cut yourself a bigger slice.
Betfair - A truly brilliant concept but with, unfortunately for some, a limited market.
It is a brilliant concept and has revolutionised the betting industry. Never has a punter had a better chance of making a profit.
But, its market is limited - there is a finite interest in say the 3.30 from Fontwell so it's ability to make a middleman profit from the over round in the the race is restricted.
Maybe saturation point is close or has even been reached?
How can you encourage ever more people to bet ever increasing amounts to grow the business?
Widen worldwide access to the exchange? - Many countries are now saying 'No' to BF operating within their borders.
Punters have more knowledge - Wider access to the internet and odds checking sites have increased punter awareness and squeezed industry wide over rounds thus reducing the margin within which Betfair exists.
Maybe the pure betting exchange as an ever expanding business model is flawed? - Its target market is just too limited.
There are also plenty of mouths demanding their own piece of this (no longer growing?) cake :-
- Punters must get better odds (after commission) - this is paramount or the whole concept becomes pointless
-' Business' users want a return on their investment (time and risk)
- Company overheads
- Betting Levy and Taxes
- Possible Government Licence
- Profit for shareholders
So if BF are struggling to increase top line revenues from their core business - How can they can grow profits?
Expand into other areas? - Casinos /Poker etc/Multiples - Problem - No unique selling point in these areas.
Cut costs? - Move off shore to cut tax - (How long before the voluntary levy payments cease?)
BF have tried the above, now they feel it's time to increase its own share of this finite middleman cake by charging more to certain types of customers.
If you can't grow the cake - you need to cut yourself a bigger slice.
Betfair - A truly brilliant concept but with, unfortunately for some, a limited market.
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Replies: 51
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Interesting stuff
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A CAKE IS ONLY AS GOOD AS THE INGREEDIENTS IN IT
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Betfair may be realising the limits to their growth, but they have have a overly complex charging structure that is reliant on them remaining the dominant player. Customers are hard to get and easy to lose. My concern is that by targeting their most successful customers they are also sending clear message to the rest of the user base - a message which goes against their original USP.
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betfair was and should be a low margin how Volume business..Betfair should have control most of the world betting markets, betfair prices (odds) should be stranded starting prices for all the world betting markets..a little bit of all the world money bet on all sports should have end up at betfair..This is what an exchange is set up for
The tech CEO and the accounts have f-ck this up...But the sign was their all to see...Betfair pulled out of the baseball market , when betfair lift commis on baseball from 2% to 5%...The same thing with Asian soccer lines, betfair put their hands up in the air and say "we as an exchange, and a company that doesn't take any risk in the market, can't offer better value then the baseball bookies and the asian bookies" If betfair can't offer better value , then I can only see betfair volume droping and moving somewhere else |
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It's not Betfair's "cake". The "cake" belongs to the customers. Betfair just cuts it and serves it.
Forget that, and in the future you won't have any cakes to cut. |
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The problem facing betfair and every other listed company is that they are not happy with just profit, they want profit growth, now there comes a point when profit growth causes a consumer backlash.
Lets look at Coca Cola as an example, each year they want to grow their profits by say 10%. There is only a few ways they can do this after thay have cut staff numbers to the bone, screwed suppliers down to the lowest cost to almost make the supliers unviable put staff on absolute minimun wages outsourced to India there call centres etc. They get to the point where to increase profits they either need to sell more coke or increase prices, now consumption of coke is pretty stable year in year out, you as a consumer are not suddenly going to drink 2 cokes a day instead of 1 so the only way to increase profit is to increase the cost of your product, now that is fine until it gets to the point where the consumer says, nah no more I wont drink coke any more its too expensive, then sales drop profit falls company starts losing money then they go into receivership and are no more cause they wanted to make too much cash. BF is in the same boat they have only so many customer, and those customers only bet so much and pay so much commission, which generally doesn't increase year after year, so for BF to make more money they have gone for the typical short sighted money grab, they probably have accountants crunching numbers, if we charge X we'll make Y, but what they and other companies fail to realise is that people are saying fk you I'll go else where. And in this day and age moving providers is very easy, something the pencil pusher at BF seem to have over looked to their peril??????????????????????????????????????????? |
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yes,GoldCoastinvestor....i seen this with online poker rooms...It only take small number to move to change the balances
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today...i made a bet at betduck because I was on only 2.5% commis..not 2.3% commis plus 20% PC (40% PC now) making my final price unknown at betfair
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Goldcoast, very true and I believe the most important point of your excellent post is that in this day and age, people will go elsewhere in an instant if there is an opportunity to do so and if they feel they are being taken advantage of.
What little loyalty BF had has largely been eroded by the general growing perception that the company has morphed so much from the original exchange model into a corporate greed machine. For the likes of me, there is little value left here at all, I do 80% plus of my bets elsewhere now, where it used to be 80% here not so long ago. |
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Good post Jonny
I think you have summed it up very well indeed. |
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" If you can't grow the cake, then surely you have to cut yourself a bigger slice ".
But surely that will result in the cake eventually diminishing to zero, unless you use the slice you cut to at least make the cake whole again ( if not actually get bigger). ? That is at least don't eat up all the slice you cut . |
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And stop calling me surely.
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Someone left the cake out in the rain
I don't think that I can take it 'cause it took so long to bake it And I'll never have that recipe again |
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IF YOU HAVE A CAKE AND YOU CAN ONLY GET 24 SLICES OUT OF IT ,AND YOU WANT 26 SLICES THEN YOU HAVE TO CUT SMALLER SLICES OR GET A BIGGER CAKE ,ITS ALL ABOUT WHAT YOU WANT FROM A CAKE
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WHEN YOU DECIDE YOU WANT A CAKE ,YOUVE GOT TO DECIDE WHAT YOU WANT FROM THE CAKE AND HOW THE CAKE CAN BEST SERVE YOU ,
ITS NO GOOD TELLING EVERYONE YOUVE GOT A GOOD CAKE ,AND LATER ON AS THERE ENJOYING IT SAY ,HEY WAIT A MINUITE ,I WANT SOME MORE OF THIS CAKE FOR MY SELF ,I KNOW WHAT I PROMISED YOU IN THE FIRST PLACE BUT IVE CHANGED MY MIND SOME PEOPLE WILL TELL YOU WHERE TO STICK YOUR CAKE |
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Especially when a very similar cake is available elsewhere at vastly lower prices, where the shop serving the cake doesnt tend to close on a Saturday afternoon due to problems unforeseen and mess up your order.
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What Betfair is doing is cutting themselves a bigger slice of a smaller cake. If they hadnt been so greedy they'd have a bigger cake to cut from.
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They are doing their best to stifle their own product and this is partly why the share price has gone down
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THEY WANTED 5% TO ENJOY THEIR CAKE ,BUT ONCE THEY GOT YOU EATING IT AND LIKEING AND GETTING THE MOST FROM IT THEY WANT 60%,
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ITS LIKE MRS KIPPLING SAYING BUY MY NEW CAKE FOR 5P THEN WHEN YOU LIKE IT AND ARE HOOKED ON IT SHE CHARGES YOU 60P ,
MRS KIPPLING WOULDNT BE HELD IN HIGH ESTEEM FOR LONG |
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PEOPLE MIGHT STILL EAT IT ,BUT WHEN THEIR SAT ON THE TOILET GOING OVER LIFE AND TALKING TO THEM SELVES THEY WILL REMEMBER MRS KIPPLING AND HER CAKE CON
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Goldcoastinvestor summed up the corporate mantra. He used coke as an example, how about McDonalds ? Like all companies, the last thing they want to do is raise prices. Pretty tricky because the have to raise corporate profits yearly or heads will roll. First McD squeeze suppliers, then squeeze their staff, then do something to their hamburger like make it have less beef but more filler, then the say eff it and save on the filler.
Next year, they have to feed the corporate/shareholder monster crying out for more, so they reluctantly raise prices. People grumble, but they're hooked so they still go. The next year ? The cycle starts all over. Betfair will raise the PC until they see a big drop in their bottom line, then they will look elsewhere to feed the monster. Who knows what's next ? The only certain thing is they must make more and more money. |
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I don't know why but this thread makes me feel hungry.
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can i have a cake pls
hope it a 2.5 % of a 100 pound bet pls can i have 40 to 60 OF THAT PLS if u win total win on footy is 100 bet on evens is 140 to 160 pounds on evens  |
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and all the ???????
do i pay pc on placepot and footy multiples etc which is a rip off in the 1st place and where is the link to the pc page cant find in my acc oh it in feedback for 3 years with the ttt come on bf u can do better than that |
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I love these corporate analogies.
I bet BF would love to become either the Coca Cola or the McDonalds of the gambling world. |
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Betfair offers nothing, it's just a platform for people to exchange bets.
There excessive charges won't last forever, they'll either back track or die at some point. The Premium Charge is unsustainable and there will be some serious competition to contend with at some point. Whether that's six months, two years or five years it will happen. There's a platform across the road that offers exactly the same product and is cheaper for virtually everybody on here. Betfair's biggest loss is the goodwill of it's main liquidity providers. The same people who loved them a few years ago now hates them. It was true love a few years ago and it's now a marriage of convenience where we'd be off like a shot if we could and when we can there will be no looking back. |
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Excellent post Get On Massive.
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Some exceedingly good posts on this fred
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GOM
Unfortunately there is still a lot of doubt as to whether that platform across the road can survive on its current charge structure. Also its product line is sorely limited and is showing no signs of expanding at the pace required to take up any slack/opportunities being created by the PC imbroglio on BF. |
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they have become the greggs cake of the betting world,i prefer a smaller local bakery myself and only use greggs occasionally now when there is no other option in the way of my daily need for cake,im sure many are in the same boat.
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GOM
Unfortunately there is still a lot of doubt as to whether that platform across the road can survive on its current charge structure. Also its product line is sorely limited and is showing no signs of expanding at the pace required to take up any slack/opportunities being created by the PC imbroglio on BF. can you back this up with some facts? or are you just guessing? |
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Just guessing like the rest of us are.
That's why I used the phrase " there is a lot of doubt ". Btw on football, the side mkts are still very, very limited both in scope and depth. No doubt about that at all. |
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yes they are....what side markets do you play?
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What % of games listed have all the side mkts that BF offers ?
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I think GOM is going a bit over the top, calm down dear its only a commercial, [smiley:crazy]
Its early days yet and I cant personally think that traders and big winners are going anywhere else but betfair, only they have the big market lead, and probably get some respect now as there showing that there not afraid to adjust the system to protect it and make it a hybrid exchange, one that offers good incentives for small players and the best liquidity albeit charge leveled on the globe! Anyone that doubts that the winning edge an exchange can give you cant make big profits for some now knows the truth, and this fact is a major market force in the well being of any sporting exchange that will go through the pace of growth that betfair have gone through. To make a philosophical point, turn the clock back say eight or nine years when the exchange was young, didn't remember hearing anyone running away from betfair becasue there liquity for winners was tiny compared too today, but a lot has changes since then and I think betfair are still on course for continual steady growth with a certain knack for staying in the bread and butter of providing a unique betting experience ! |
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Betfair should have put the 5% commision charge up to 6.5% and the lower commision up to 4%.At the same time increasing new account promotions.
The liquidity would have increased dramatically.That's all punters want.A betting exchange that is fair. Put the fair back into betfair sort of thing.I have removed about 90% of my betting activity elsewhere now I am paying too much pc and am doing very well.Betfair have got it all wrong in my opinion and I agree with most on here that its all downhill from now(same as many of the big poker sites) |
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i don't know...i just play over/under in soccer, and just bet with big asian books..
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The only trouble is that maybe it's going to be all uphill from now on the other exchange(s) as they try to make money from you with their existing charge structures.
You could be in for a bit of a shock maybe ? But then I suppose you will then look for another exchange and so on and so on. In the meantime maybe BF might even thrive without you. But they will always welcome you back with open arms if and when you run out of liquid alternatives. |