General Betting
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"Activity on the Exchange has remained strong. Towards the end of the period, we introduced targeted pricing changes for a very small number of customers which we believe will improve the balance of the Exchange ecosystem and ultimately lead to higher revenue growth. Whilst the impact will be assessed over the longer term, we are pleased with initial results. "
taken from latest management statemnent at - http://www.investegate.co.uk/article.aspx?id=201109060700136723N&fe=1
taken from latest management statemnent at - http://www.investegate.co.uk/article.aspx?id=201109060700136723N&fe=1
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'...ultimately lead to higher revenue growth.'
This seems to imply it hasn't led to higher revenue growth on a like-for-like basis over the period measured, or that any growth in revenue has been anaemic. Bf are also suggesting with 'ultimately' and w/ the long-term assessment that they were prepared for the exodus of some big players to another exchange. And further, the fact they address this point at all highlights that some analysts are concerned that they are surrendering the exchange model and (no doubt) even more are concerned about their maintaining an upward trajectory of revenue improvements. I cannot see the phrasing of the release pointing to anything good for the company. |
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That is really reading between the lines quite a lot.
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Exchange ecosystem. This is a term that I clearly need to adopt.
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"we are pleased with initial results. "
Oh really ? They are pleased with the almost total trashing of the charge itself and also the company in these columns ? They are pleased that many of us conduct at least part of our betting on purple ? They are pleased that their clients.. formerly their best PR are now loath to say a single word in favour of BF ? They are pleased that they stand as the sole betting company that penalises punters for winning (as opposed to restrictions or closure)...? What a load of tosh..yes Betfair has indeed gone public. |
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After bending me over the table and doing me royally up the aris, it's a bit of an insult that they're only "pleased". I feel like a cheap hooer now
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askari is right though, there were clearly a number of analysts who wanted to press questions regarding the Premium Charge if you listen to the conference call which accompanied the results (link is on the corporate site)
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These statements are always a good fictional read. Lived it through the late '90's when I was day trading on NASDAQ.
Bordering on sci-fi calling it an "Exchange ecosystem". Someone in their organization believes it is a living, breathing entity. |
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As the previous replies suggest,this statement could be intrepretted in many different ways.It is a typical 'covers every eventuality' comment as they have no idea what the longterm result will be.I suspect they are far from confident that it will be a success and hope ,for their sakes,they have a plan'B'.
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any one got a link to conference call
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They are hardly going to say they are not pleased as the first rule of business is to protect your own backside.
That as a statement sounds a bit lukewarm to me. I'd have expected a bolder statement if it was going well. |
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http://corporate.betfair.com/investor-relations/results-centre.aspx
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As a shareholder I would be worried that Betfair feel it neccessary to report on a small number of customers who can effect their "ecosystem". If they shut down these 500 customers what about the next 500 who take their place, and then the next... The targeted pricing could turn out to be a band aid that needs constant renewal as the wound deepens.
I would also be worried that they are looking to these 500 customers for higher revenue growth, whether it be by them paying more in charges or by leaving the ecosystem. Have they come to the conclusion that revenue growth could be stagnant or flat with these 500 operating untethered: the statement does say revenue is down 7% in the latest quarter? Liquidity elsewhere has improved, and it would seem from empirical evidence that revenue growth may be spreading outside of the betfair ecosystem. But, if betfair say they are pleased with the initial results then maybe there is room for growth in more than one ecosystem. |
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Hazel - going to AGM?
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the ecosystem
 is growing across the road |
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Can be summed up by "complete and utter corporate bullsh1t"
"Exchange ecosystem" Exactly the same word used, incidentally, when changing the poker rakeback system to the "essence" one. Which, incidentally, resulted in lots more money being taken from winning customers into the pockets of the site, a tiny bit of which was supposedly distributed to losing customers (or in this case, attracting new ones / promotions) But I am sure that this, too, was a total coincedence and completely unintentional  Hang on a minute, a flying pig has just gone zooming past my window..... |
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Duncan Disordorli 07 Sep 11 09:02
They are pleased that their clients.. formerly their best PR are now loath to say a single word in favour of BF ? That's the saddest part. It's so true. I think we all used to feel part of something new, good and exciting in the early days with a huge sense of customer loyalty. For any company that's something you just can't buy and it's like gold dust. That's all gone now. They threw it all away and alienated most of their clients. It's one of the strangest, deliberate business moves I've ever witnessed. |
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Agree totally with man of many moods.This company always had a good feel to it like apple.
Now it feels like the guys who built it up are no longer wanted.Problem is it then creates the onion effect with the next layer not wanted.Very very sad state of affairs. |
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When I said apple it applies to both apples.
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How do you like them apples?
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It seems BF doesn't know how to run their business.
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If RBS didn't know, if the government don't know, why should Betfair know, particularly when most of those who made it a success in the first place are long gone?
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^^^^excellent point.
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Things have changed in 12 years or haven't you noticed ?
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What was wrong with what they were doing 12 years ago, and what reason is there for thinking that it wouldn't work now?
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difference is that BF is now publicly listed and run by numbnuts, which is a bad combination.
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I sense some of you are more than a little disappointed to find that you were just not important after all.
The "we keep the whole show on the road" mentality that had been kicking around this place for years has finally been shown to be a complete myth. |
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Johnny is the opposite.
People are worried that betfair feel such a small number of customers can damage their ecosystem to such an extent that they justify a paragraph in the management statement. And even so, Betfair cant decide whether they have cured the problem until the impact of such a small number of customers has been assessed over the longer term. If such a small number of customers were unimportant to betfair then surely there would have been no mention of them in the document and no questions about them in the conference call. ( having said that johnny, I recognise that I am completely unimportant to Betfair, only contributing £8.79 premium charge for some betfair SP bets this week ) |
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They did not say:
Towards the end of the period, we introduced targeted pricing changes for a very small number of customers with a view to balancing the Exchange ecosystem and driving higher revenue growth for the company. Whilst it is still early days, initial results pointed to a positive impact on the company's revenue figures and on our retention of those customers that have been historically profitable to the company merely on their wagers. We will continue to monitor these developments and keep the market updated. Of course it cd be that I am reading too much into their communications, but in a situation w/ the senior managers literally shedding millions with last year's share price movement, I wd expect them to be v. careful in what they say. |
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charlatan, their problems in running the company come from their not thinking like bettors or even more specifically arbers.
For practically every promotion they introduce it's immediately apparent to me how to game it, usually through the use of derivative markets rather than / as well as cross-platform arbs. And we had this situation writ large with pc1. The company's expectation was that payers wd make slightly worse than breakeven cross-platform arbs, offering liquidity at tight prices in their own markets. In fact payers churned in the site's own main and derivative markets esp. on football and tennis, cannabalising the strategies of bf's incumbent low-margin layers like Betting Promotions, destroying their profitability and threatening what was a strong partnership for bf. A lot of people, including small players like me who think in terms of strategy, cd have predicted some sort of 'unintended consequence' of this kind, but imv it took the company by surprise. |
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no talk today in the call about what happen to betfair when Purple start to turnover more money
...what happens if betfair is no longer the number one exchange for UK horse racing in 2 years time |
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Well, at a guess they would make some more changes. But if bf are right and the business that moves to purple is not that attractive then it could be a very good decision that is more likely to end up with purple following suit. They are hardly falling over themselves to attract pc payers atm, are they? Why not?
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I think Hazel has hit the nail on the head. For all the complaints from the 500 it is apparent that they just dont get it. If the 500 are allowed to carry on unchallenged Betfair will simply not survive. They are winning too much too quickly meaning the losers are losing too quickly and leaving. It is not a sustainable model. Betfair cannot exist long term allowing the 500 to continue as they are.
The same problem is occuring in the financial markets with HFTs there. The real question is how do you stop them? The people who are clever enough to be one of the 500 (bar the fast picture players) are likely to be clever to adapt to whatever Betfair try to change. |
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My guess is that only a small proportion of the 500 are complaining. As you say, they are likely to be clever and therefore likely to be able to see the issues from both sides of the fence.
I think the point is that if users adapt their strategies to avoid pc2 they will contribute more to the sustainability of betfair. If not, betfair get more money which improves sustainability. If they leave - problem solved. If they leave and go to a competitor even better. One downside is that some users are unhappy. That's unfortunate but things have to change, you can't run a leading edge company like betfair with the attitude, as I think I read above, if it worked ok 12 years ago why change it? The other is the poor publicity it generates but this is largely due to the misrepresentation of the charge's applicability. Again, the 500 are intelligent people and unlikely to want to promote poor publicity for what is effectively their own business. So who's doing it? |
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frog, the people losing to the pc3 players are only leaving if they had some expectation of winning or at least breaking even. Recreational players don't stop playing, so bf's deeper prob. is that the site does not attract sufficient recreational money.
I think they realised this belatedly and gave mobile a big push, but it proved harder to load exchange functionality onto an app than they anticipated. I agree they do not exchange most pc3 payers' custom on the terms originally offered to all bettors on the site and within their rights to rejig the terms of any profit share. |
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frog2
08 Sep 11 08:08 Joined: 01 Feb 08 | Topic/replies: 197 | Blogger: frog2's blog I think Hazel has hit the nail on the head. For all the complaints from the 500 it is apparent that they just dont get it. If the 500 are allowed to carry on unchallenged Betfair will simply not survive. They are winning too much too quickly meaning the losers are losing too quickly and leaving. It is not a sustainable model. Betfair cannot exist long term allowing the 500 to continue as they are. -------------------------------------- I`m sorry frog2 I just won`t buy that. The figure of winning clients on BF..1.7% was quoted by Mark Davies a long time ago, way before BF even dreamed of the three card trick that is the PC. How unnacceptable is that figure for a gambling company ?...I`ll call it again, a GAMBLING company ie where the customer at least has the theoretical dream of winning. So 98.3% have never won and presumably KNOW that they will never win. Where are they leaving for ? BF continues to grow (allegedly) and the company is `pleased`..The customers that are leaving are not the losers, but the PC payers and the disenchanted. For you to suggest that the 500 will kill the firm if left unchecked is preposterous and pure company spin. If that were true account closures would have started years ago. The answer though unpalateable is not economics but greed. Betfair recognise now the flaw of their original model especially commission wise and realise that there are people out there who can earn more than them thanks to their platform. The 5% was clearly wrong and allowing hooverers insiders etc to prosper unchecked has made the company also realise that it `owes` something to the 98.3% who lose.. the PC is either ignored or approved by that number..why should they care ? I am in the PC bracket and I gamble...I have no illusions that after a decade I have mastered this site, and am fully aware that my methods could prove unprofitable starting immediately if I stick around (not least because of the 40%.) I am not as you suggest winning `too quickly` I am simply one of the 1.7% who win on this gambling site. THAT IS NOT AN OFFENCE...and until Betfair along with the other companies driven by pure greed accept that this is part of the game, this and other bookmakers will be regarded as nothing more than shams. BF returned what was it £35M last year ?...what the hell is wrong with that ? In these economic times ? They have simply tried it on with the PC and ignored the longterm implications which will affect them every time a new client reads the T & Cs. |
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Nothing to do with losers losing too quickly and leaving, it's all about PC payers winning it faster than bf can extract it themselves. Ecosystem, my ar$e. There seems to be a basic understanding at bf that once money has been deposited, it's basically theirs (just a function of time).
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I think Hazel has hit the nail on the head. For all the complaints from the 500 it is apparent that they just dont get it. If the 500 are allowed to carry on unchallenged Betfair will simply not survive. They are winning too much too quickly meaning the losers are losing too quickly and leaving. It is not a sustainable model. Betfair cannot exist long term allowing the 500 to continue as they are.
Betfair's "solution" to the problem is to allow the 500 to continue as they are but take more money off them. How does that help losers lose more slowly or stop leaving? BTW I don't think that's what Hazel said although I confess I'm not sure what he did mean. In any case I agree with JTG's "we keep the show on the road" comment. |
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Getting back to the original topic header the more I think about it the more I think they are not pleased. The statement reads like they don't want to dwell on it. It says nothing at all of substance and words like "whilst" and "ultimately" seem very negative to me and it feels like they are wanting to buy time.
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*they don't need these players' custom
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