Have Betfair set a dangerous precedent?

New Betfair Terms & Conditions? : Bets placed between Betfair customers in-running at correct prices may or may not stand dependant upon whether or not a rogue trade is placed subsequently.  All fair bets struck in-running before the rogue bet will be voided anyway, if there is a rogue bet later on. 

How does Betfair's decision not encourage people with trades that have gone against them to try to crash the market?  There is now a massive incentive to try to do exactly that, which could save someone who is in danger of losing tens of thousands of pounds placed on a fair bet in-running, from having to pay up on that loss.  Its the same as 15 years ago, when people were repeatedly vandalising the floodlights at Premier League games, successfully getting matches abandoned which were going against their bets. 

Betfair should rip up what they have done, and go back and settle all in-running trades on that Leopardstown market which made before the rogue bet.  Anything else is a really dangerous precedent.

The Premier Leaugue thing Ballabriggs was so they'd win the bet (when it was in the correct score/position for them to win and the lights would be cut). It was not because the bet was going tits up. That's theory behind it.

An exceptional point well made ballabriggs. Lots of technologies exist which monitor and deal with such things, but they tend to fix smart attacks/smart problems which smart people can identify and resolve. This bet was similar to Mr Bean painting his house. As soon as someone develops the equivalent of a binary jelly and ice cream bomb hoyed into a fan then we're all doomed and they'll rule the world

Betfairs system itself has crashed in play many times and they generally don't void. This wasn't a crash in play this was something happening that violated the way the markets work, and either left an unsuspecting punter or betfair itself with a massive liability, that actually could've been worse - £600m? I'd think if someone sat and tried OTHER such things to see if they could get similar bad things to happen, betfair might notice and they would be playing with fire - they might lose a lot of their money in the "trying"?

Oddly enough though I do remember something happening a while ago (can't quite remember details) where they did do something like void all bets after a specific point in time and settle bets before, so while I think not paying out after the problem was completely understandable, having a cut off of bets up to the point the problem bet was made would've been reasonable.

Breon Corcoran may have a serious problem when he takes up the reigns as CEO.  Paddy Power are a dynamic, jazzy, constantly looking for publicity, customer-friendly and media-friendly outfit.  They are proactive in paying out on occasional gimmicks, and although like all bookmakers they do restrict winners (inevitably), they are probably on the (losing) punters' side.  This is inevitably what will have to happen at Betfair once they run out of sneaky cross-skimming revenue streams and the like.

How will he fit into an environment of stone cold silence, banning the media from even the AGM? .  Tony Calvin has been savaged in over 500 posts on here, with probably not one single favourable comment about his performance.  Yet it is he who has prospered, and Mark Davies who was pushed out, with only one of the board bothered to even say goodbye to him,...?  How is this possible for a FTSE 250 company?

Something will have to give once he is appointed, and maybe he will come over to the current temporary Betfair culture of omerta, which does them so much damage to their own reputation, and is sad to behold.   

Betfair have left open a massive can of worms, there is now the clear incentive to sabotage markets if an in-running trade has moved in the wrong direction for someone with an open position.  They could place a million pound bet, watch it going a bit belly up, then decide to log on from a second account with only £1000 in  it and place £600m bets wrecking the market.  Its only a question of when someone (deliberately) finds a new loophole, not whether or not it is possible. 

Betfair have made a MASSIVE mistake voiding the fair bets which had already been placed in-running on Voler La Vedette before the rogue bet hit the market.  [They also made mistakes voiding the place market, and not suspending other markets at all until the vulnerability had been found and stopped from being possible again,...].   The fact is they probably have realised too late they put too little thought into the void, but are following the current Betfair culture of now trying to ignore it and hope it goes away.  This time Betfair faced a bill of 0 pence, not even making any goodwill gestures such as a commission discount to affected accounts.  Next time if someone succeeds in deliberately wrecking a market, it may be for malicious reasons, and as usual, the genuine 99% of people will lose out, Betfair will make up a new story to fit around the next event (which will conveniently leave a bill of zero pence again...), which will be inconsistent with previous decisions, as this one was with earlier decisions too.  Its a shambles, and Betfair itself deserves better than this ill thought through ramshackle.

This is a huge overreaction. Betfair has been going for 11 years plus...why do you think there is any more chance people wanting to sabotage markets now than in those 11 years? Why should Betfair pay out on this race? They didn't lose the money did they? Surely the rogue account should pay out?

jimmy69, for 11 years if we placed a bet in-running against another user, that bet stood. For the last few days, if we placed bets in-running fair and square, they can still be voided if there is a subsequent crash of the market (deliberate or not).  This is quite a big material change. 

No system is perfect, in time, whether its days, months, or years, more problems will eventually surface.  The problem here is that there is now a powerful incentive for people to spend time trying to work out how to crash markets.  Bets that have gone against you may yet be voided, for no good reason, if you can crash the market with a rogue bet.  Is this not a recipe inviting trouble?  The rewards from deliberate sabotage have now gone from unknown, towards potentially millions of pounds.  This is not right. 

The issue is not whether or not Betfair should pay out on this race, whose money it was on the screen, whether the rogue bet account holder should pay out etcetera.  The issue is that bets pre-off stood, bets in-running pre the rogue bet were void, and bets placed subsequent to the rogue offer were void.  The bets in-running placed at fair prices between genuine users should not have been voided.  That is the issue, and the only reason they have been is surely not spending enough time analysing how the market played out.  This precedent of voiding completely legitimate and fair bets, placed on Betfair between genuine users, for no justifiable reason whatsoever, is a toxic mix when combined with the likelihood of a future void if someone can work out how to crash the system again.  That is the issue.  Win or lose, those genuine bets at genuine prices should have stood.

The issue of voiding one market (place) because of an error in the other market (win) also sits a bit dangerously to me.

It's effectively protected the people who are relying on linked bots to create prices.

I have no issue with linked bots, they'll happen whether I like them or not, but I do have an issue with the protection of them.
If I generate a price not knowing a tennis player has an injured leg then I lose my money. I don't see why a bot user using bad information should be able to keep theirs.

Ballabriggs...the issue over whether bets could be voided or not on any market has always been there since Day 1. Why can't we have some praise for Betfair for providing a platform where millions of bets have been placed without any problem?

jimmy69, you introduced a number of red herrings in your first post (this thread wasn't about (1) whether or not Betfair should pay out on the race overall, nor was this thread about (2) whether or not Betfair or the rogue account are culpable, nor was it about (3) Betfair's own pecuniary position in the market).  All three of your red herrings I dealt with anyway, and you have had clear answers.  Its no problem if you don't want to acknowledge them.

Betfair should have let (1) the pre-off bets stand, (2)the in-running bets before the rogue bet stand, and then (arguably) they should have voided (3) all subsequent bets once the rogue bet had entered the market.  It is in Betfair's best interest to let (1) and (2) stand, and for (3) to be voided.  A decision has been made to void both (2) and (3), instead of just (3), and this has serious potential ramifications to haunt Betfair in the future. 

Everyone sensible who wants the best for Betfair would have liked to have seen bets (2) stand instead of being voided, especially because of the dangerous precedent this sets.  Your desire to seek praise for Betfair is to be commended, you are outnumbered by at a guess 300 or 400 to 1 on this forum, by people who don't think Betfair deserve praise, particulary in light of the recent events in the last couple of years.  If it makes you happy then yes it is wonderful that Betfair have provided a platform where half a trillion bets have been placed with only occasional problems, but that still doesn't take away from the issue highlighted in this thread, which is not about your red herrings, its saying that by voiding the bets (2) placed in good faith between genuine customers, has the very realistic potential to do significant damage to people who have the misfortune to bet on a sabotaged market in the future, and is leaving a ticking timebomb which could do another £70m of damage to the share price.  Singing Betfair's praises is great, and it's great you push for other people to do it, but nobody wants to see Betfair take another £70,000,000 hit to its share price, so maybe they should have a think about why they've decided to void perfectly fair and legitimate bets highlighted in (2).  Have a think about it.

I agree with you Ballabriggs. They should admit they were wrong to void the IR-bets that were matched before the big mysterious bet appeared, and compensate the players who missed out on winnings because of that (a bit late to take that money out of other players accounts now, and it's probably not that much money anyway?).

I couldn't care less whether Betfair takes another hit to its share price. I don't own any shares in them and I suspect very few other forumites do.

Oh and I thought all pre off best were allowed to stand. Is that not true?

bets not best ffs

ballabriggs     01 Jan 12 17:59 
jimmy69, for 11 years if we placed a bet in-running against another user, that bet stood. For the last few days, if we placed bets in-running fair and square, they can still be voided if there is a subsequent crash of the market (deliberate or not).  This is quite a big material change. 

No system is perfect, in time, whether its days, months, or years, more problems will eventually surface.  The problem here is that there is now a powerful incentive for people to spend time trying to work out how to crash markets.  Bets that have gone against you may yet be voided, for no good reason, if you can crash the market with a rogue bet.  Is this not a recipe inviting trouble?  The rewards from deliberate sabotage have now gone from unknown, towards potentially millions of pounds.  This is not right. 
____________________
Spot on BB - very good points indeed -all bets prior to the lump sum appearing on the screen should be honoured - i haven't seen any argument against this

If the bet were treated like a system crash, which effectively they've said it was (techonololoowhatnot failure) then all bets to that point should indeed be honoured.

jimmy69

Why can't we have some praise for Betfair for providing a platform where millions of bets have been placed without any problem?

There's plenty of praise provided by way of Premium Charge, commission etc etc.  The fact that people stick around despite having to pay it is a tacit form of praise.

But this shouldn't detract from the fact that this issue has been handled abysmally by Betfair.  As mentioned earlier, there is no good reason to void the place market, apart from saving the skin of those who derive prices from the win market.  And this sort of occurrence would surely be an occupational hazard for those punters? 

It's either gross incompetence on Betfair's part, Betfair being economical with the truth in terms of the details it has released or both.  My bet would be the latter.

It's clear they have been economical with the truth but to call the discovery of a system bug gross incompetence is ridiculous.

And reading about betfairs "abysmal", "disastrous", etc, etc handling of affairs is getting very boring. There are people on here who complain whatever happens and however it's handled, usually managing to quote the premium charge while almost never having an actual alternative suggestion.

ballabriggs is spot on. Voiding the fair bets struck before that bet entered the market was unjust and very ill advised. What would they have done if it had been entered as a keep bet a second before the off?

The voiding of any race is a major decision which should be made only for exceptional circumstances when it is clear that NOT to void the race would be clearly wrong decison.If voided, thst should as a matter of course be extended to derivative markets.

Having made the decision to void, there is then the issue of whether partial or total voiding is the right course.In my view, and I realise that I am in the minority on this, there is such complexity in betting patterns which involves inter-related bets placed by maany players now given the opportunity that an exchange offers, that only a total voiding of both pre and post markets provides the means by which no player is disadvantaged as a result of the voiding decision itself. The loss of a missed opportunity to win is as nothing compared to a forced loss as a result of an administrative decision, imo.

I still can't believe you're taking this line Sandown. What about people who thought they backed the winner and played in subsequent markets on the strength of those winnings (even though they hadn't hit their account)? Should all markets up to the decision being made be void on that basis? If they change the decision at a later date should all markets in between be void? To start voiding fairly struck bets involving true liquidity providers (in a race won by a short priced horse I might add) in order to save the sensitivities of the odd punter who likes to close out in running (many of whom won't even expect to get their closing trade matched) would be suicide for betfair.

Ages ago Rollo Tomasi put forward a sound idea whereby those who placed bets with the idea of closing out could indicate the same. If they were denied that opportunity due to e.g. an outage their bet was made void (up to some maximum) and betfair had to stand the other side of the bet (up to that maximum). There wasn't a single voice among pages of Ferengi moaning about the outage that supported the idea.

Sandown, your intentions look very noble, but in practical terms I don't think that would work.

Each year Betfair Bob finds a number of new Joe Punters, each looking to place their 'twenty tenners please'.  Imagine if for the Grand National 2012, all these new Joe Punters log onto Betfair place their bets at say 11am or midday, then ponder the day with excitement, talking to their mates about which horse they've each chosen.  It gets to 4.20pm, they're off, and its a wildly exciting race, with many contenders in the running throughout.  With 60 seconds to go, someone then manages to place a £600m bet into the market at 28/1, and that horse then wins.  Those Joe Punters who had their twenty tenners on that horse to win will be sat watching the race, thrilled to bits that they've just won, on probably a 10/1 to 14/1 shot.  They'll tell Mrs Joanna Punter she can have a new kitchen.  They'll promise their daughter Joanna Punter Jr. a little tricycle with pink tassels on it.  Then they'll log back on to Betfair, and find that every single bet on the entire Grand National 2012 has been voided, because of a combination of someone crashing the market (either deliberately or not), and weaknesses in Betfair's IT architecture.  This would include bets at 11am or midday, none of which were anything to do with the new rogue bet.  Your idea is noble, and is perhaps the Corinthian ideal, but the reality would be absolute unprecedented carnage.

as just checking states, the policy on events which are in play when the betfair site goes down, is to honour all bets placed, both before the event started and in play.

the monstrous bleating to be found on the tennis forum when this happens, and people who have bet in play are left with exposures they would usually have heavily hedged, shows that befair's policy is to honour "gamblers" bets over managing "traders" dissatisfaction. i'm happy to defend this policy on the principle stated by the OP: if someone found the ability to bring the site down, in the knowledge that befair would void all in play markets affected at the time, they bet with an unfair advantage.

the decision to void everything in play on the Leopardstown event does seem to be totally at odds with previous actions when technological failures have been encountered, and it does seem that voiding everything struck after the freak bet hit the market, would have been the more consistent decision; everyone who bets in play is (or at the very least should be) aware that they may not be able to hedge their stake if a technological error prevents them from doing so, and have little  recourse if this does happen.

Sandown,
A punter who has had a horse refuse to race, rather betting pre-race may wait until they set off then immediately place their bet. Why should they not get paid? No reduction factors in running might also mean people wait until just after the off.

Personally I think all bets should stand. Betfair extended someone a lot of credit that resulted in a negative balance. In the past they have paid out on those. Just because this time the amount is larger shouldn't make any difference.

Anyway this £23m is a phoney figure. I'd knock off at least 33% for commission and Premium Charge. Then bear in mind that the winnings are only loaned to punters on here because PC means they have to pay it back as higher charges on future wins.

As for the original points, there are more serious problems with what Betfair have done.  It seemed obvious to divide the bets into (1) those made pre-off, (2) those made in-running at genuine prices between Betfair users, and (3) those made after the £600m rogue bet had hit the market.  Betfair's decision to void (3) is understandable, but voiding (2) is unacceptable. 

However, Betfair's SP machine is active in the markets, especially in the final moments as a market is about to be turned in-play/turned in-play.  Were bets placed by the Betfair SP bot themselves voided?  Did Betfair gain a financial advantage to its own book from the voiding of (2)?  Voiding (2) was a terrible decision, but there is a difference between doing it for reasons of gormlessness, and doing it for reasons of gaining a financial advantage.  Let's hope there wasn't a more sinister reason behind voiding (2). 

Also, the voiding of the place market has a very bad smell about it.  People deriving a price from the main market are using the information from other market participants, to profit themselves.  This is only 1 race out of 10,000s.  There was no rogue bet in the place market, all bets were placed using information from the main market.  If Warwick Hunt is allowed to lose £250,000 laying a horse at 1000 on Betfair, and Betfair say that's fine as he had the money in his account and placed the bet of his own free will, then a bot programmer, who also has the money in his account, and programmes it to use information from the main market, has also had a bot he has programmed bet exactly in the way he has ordered it to.  [He could have even programmed the bot to ignore orders of more than £10,000 on the screen too, had he been exceptionally shrewd]. 

Both Warwick Hunt, and the place market bot programmer, have placed bets exactly as they ordered, however only one of them has had to pay the price.  If there is informational value in deriving place prices from the main market, why must the bot programmer not be subjected to the same risk every other user is subjected to?  If it turns out that it is again Betfair's money which has been saved by this void of the place market decision, because it was somehow some Betfair related bot at work, it is incredibly unfair for Steven Morana to give the Betfair related bot favoured treatment.  If its not Betfair's money, why was it voided?  It makes no sense, plus much of the place market betting in-running took place before the rogue bet hit the main market.  So now Betfair have voided bets on an unaffected market, placed during a time when the rogue bet hadn't even hit the main market yet.  This is not right.  Betfair have to go back to thinking that a genuine matched and struck bet, should be honoured as such.

I know that I am arguing on a point of principle (noble or not) and that maybe not many people are affected by this decision and perhaps the consequences woukd otherwise  be greater, but that is not the point. As in the law, first establish the point of law, then guilt or innocence, then apply the penalty.

BF has created the means by which it is no longer necessary to limit a bet to who is most likely to pass the post first (or not.) It is also possible to see a race in terms of the price point that a horse (or player) may reach in running. If I decide hypothetically that a horse priced at 10.0 can reach 5.0 in running giving me a 2.0 price if successful, is that any less meaningful than someone backing a horse at 2.0 to win the race? Because I have to say that for the life of me I can't see the difference.

By voiding just the post-off bets BF took an administrative decision that effectivly gives me no chance of succeeding (unless of course the horse wins.) Why should this be case, especially when you consider that i would be making a bet in a near-**** market what with fast pics players etc.

Now what i have used as an example happens in most races i should think, where there are players who follow such a strategy whereas the example that You use Ballabriggs, is an unlikely scenario although perhaps of a slightly higher probability than before.

Most of the negative response to my suggestion is to do with the consequences of winners not being paid out (ignoring the much greater number of losers), the loss of commission etc. Well, for my money that's just too bad and something you have to put up with. If a race is voided because something has occured which makes it necessary to void the whole race (as opposed to a single or small number of runners where a R4 can be applied) then to my mind that is less unsatisfactory than delberately creating a number of losers who have just as much right as anyone else to expect the same treatment as the next man.

What ballabriggs insinuates about BF's motives behind all of this, well I would have thought that none of us would use the "palpable error" rule in the face of a £23m payout. (I find that no palpable error get out for the player is an inescusable ommittance from the T&C - what is sauce for the goose is sauce for thhe gander.)

feck, your point about people who have conditional bets in other markets is a complete red herring with no logical reason to mention it other than to find a negative. Your argument is completely biased against either small players or "traders2 in favour of 2genuine liquidity players" and introduces value judgements about players which is totally irrelevent. We don't usually differ in view but in this I believe that your prejudices are showing. You know full well that I am not a trader but an opinion player and i would have to say that if i had been playing as backer then (on the winner) then I would be worse off under my argument. But that's life. We should be seeking a level playing field all round not arguing just from our own best interests which you clearly do.

none of us would NOT use the "palpable error" rule

ballabriggs, would allowing bets placed in the place market after the rogue bet hit the win market to stand not also be an incentive to mess up the win market in order to profit from the place market.

Sandown, as you say we are usually on the same side and I think we're just going to have to agree to differ on this. My dislike of traders may be showing through (even though I don't consider those trying to close out pre-off bets ir as Ferengi) but I genuinely believe it would be suicide for betfair to adopt your stance. I once had a similar lengthy argument with medemi (another I considered an old mucker) on this very subject.

Would you not be better supporting the suggestion of Rollo's that I posted.

Feck,doesn't that suggestion swing the other way and confer a preferential advantage not available to others?

In what way Sandown?

Sandown

Respect your opinions over the years very much so curious this one is misalinged with mine....

PLACE MARKET
granted there are many related bets between the two, and bots pricing place form win... but surely if they use bad data to make thier prices that is thier issue... fine they may have a claim against betfair for supplying them bad data - but Betfair would win that claim.

so not sure why they should be allowed to void.

**** market
what is the **** market had a bad bet.... and all the arbing bots, arbed **** to betfair.... should betfair void the markets because a related market was corrupted?

is see some issues for the place being effected by the win, and people with win lays and places backs or similar insruance startergies... but surely the place was not FORMALLY effected and so it should stand...

There is a keep bet facility so why not a keep bet trade? In case in running isn't operating.

When someone backs pre-race intending to lay shorter they set the price and stake. If the horse wins it's usually safe to assume the bet was matched.

If someone lays pre-race to back higher, if the horse loses it's usually safe to assume the bet was matched.

The grey areas are lays at a shorter price that didn't win that may have had the price matched or backs that won that could have traded higher. There you could just say they don't count and are void or devise a way to decide prices were hit and bets matched. This could be using prices traded somewhere else or a panel decides on a price for each horse in running and bets are settled on that.

It means Betfair get commission in a situation they don't now. They don't necessarily make a profit because they stand the bets but at least more customers have less to moan about.

ballabriggs

the precedent was set when they introduced the x matching alg unannounced on horse racing  -  everything since is based on arrogance, contempt and above all greed

Feck
Because the back to lay or LtoB player has his risk reduced, the pre-off player doesn't.

Magician
The situation that occured was supposedly 1 in x million chance and to a level that was bigger in outcome than might possibly beimagined. The safe course of action was to completely void so that no-one benefited, no-one lost. The derivative markets could not be assumed to be uninvolved. A thorough investigation might take ages. Accident or design? Innocent or guilty? I wwould have played safe. hese were exceptional circumstances.

Rollo
The above comments apply.

Sandown, the first floodlight failure and resultant match abandonment at a Premier League match 15 years ago could have been described as a one in 10,000 chance.  When it happened again shortly after, its not a one in 10,000 chance anymore,....

Most people do believe Betfair's account that this was an accidental bet, from a relatively small account.  However, the decision by Betfair to void not just bets placed in the market after the rogue bet had been submitted, but also to void many, many (hundreds of?) bets all placed completely fairly and in good faith at fair prices before the rogue bet was put in, plus more voids in a secondary market both pre-rogue bet and post-rogue bet, means that Betfair have opened up Pandora's Box. 

People will now be looking to crash markets if they can, if their trades have gone against them. 

Steven Morana/Tony Calvin et al have pinned their colours to the mast that they are happy voiding fair bets placed at fair prices before the rogue bet, and voiding bets in a separate market too, even those matched as fair done deals before the rogue bet had even been submitted into the main one. 

We're not dealing with lightning striking twice, the precedent set here with this voiding means there is a huge reward on offer to anyone dishonest who can work out how to crash the Betfair markets in future.  Betfair should change the way they voided many of these bets, and go back to settle them, or else if a deliberate act of sabotage does materialise, its going to be a case of Stephen Morana/Tony Calvin et al knowing in advance that there was a problem with the precedent they had set, and doing nothing about it.  If their actions do lead to an act of sabotage, because someone dishonest thought they could get in-running trades that had gone against them voided, then it would definitely be time for the interim CEO to be forced to resign.  None of us want to see that happen, but especially so the shareholders.

Because the back to lay or LtoB player has his risk reduced, the pre-off player doesn't.

I don't understand that Sandown. The pre-off gambler gets what he wants the hedger gets nothing as he wasn't given the chance to close out. No advantage there. It doesn't matter to the gambler the race doesn't go in play.

Personally I think Rollo's idea adds further complexity to an already over complex site so I'd be against the idea unless it was something that had to be set in My Account or some equally obscure place.

Why are you continually banging on about this Ballabriggs?

catflaqpo

It's clear they have been economical with the truth but to call the discovery of a system bug gross incompetence is ridiculous.

And reading about betfairs "abysmal", "disastrous", etc, etc handling of affairs is getting very boring. There are people on here who complain whatever happens and however it's handled, usually managing to quote the premium charge while almost never having an actual alternative suggestion.

Sorry for being unclear.  The gross incompetence bit referred to Betfair's PR department's handling of the whole affair.  I can't really comment on the discovery of the bug itself, as it's all completely over my head.  Anyone talking about 32 bit integers may as well be speaking in Swahili to me; I haven't got a clue.

Don't think I've never complained about the PC meself.  As you say, what's the better alternative?  That's rhetorical by the way, so nobody should feel the need to answer .

Apologies for misreading you Rob and the second paragraph was aimed at the world in general.

I tend to agree with those who think they should have voided less but have to consider that they are best placed to make the decision.  You'd think it was in their interest both financially and publicity wise to void as few best as possible.

Not sure if this has already been discussed but didn't something similar on a smaller scale happen with the case of the first goal scorer market when people were laying the entire field at over 100% based on the tips on moneysavingexpert in 2007.

In that case a bug in the system also allowed people to bet bigger than their exposure. From memory I think that the biggest loss was around £30k but several people lost thousands. Since Betfair are not allowed to let people take a risk above their account balance they had to let the losers off, however as far as I know the punters on the other side of those bets kept the profits and there was certainly no question of voiding the entire market.

The size of the trading in the current case means that Betfair can't swallow the loss quite so easily. Another difference I can think of is that the individual who put those 29s on the screen could have been trading on a credit basis rather than having to fully fund the account.

The main thing is that in both cases someone wanted to trade a "silly" trade, either through naivety or a technical error and Betfair's system allowed this "silly" trade to continue and the punter to take an exposure beyond their chosen limit. In the previous case the bettors were naive punters with thousands at risk, in the case last week it was a serious botter playing with millions. If all bets had stood then Betfair would be chasing this individual for millions and probably facing a tough legal defence.

Are you sure it was a "bug in the system" and not just the money site not understanding the rules?

Didn't they think that if you lay all the players it's a "certain" win because the overround is greater than 100%?
What they didn't realise was that bets on players not taking part had to be refunded. That meant it was a certain loss because the book became overbroke. Then balances turned negative.

The same happened on top scorer first innings on cricket. There was a chap posting on here very worried about it because I think he was about £6k in the red.

Not so much a bug but a flaw in the system that it allowed people to bet more than they had in their account, i.e. the exposure measure didn't take into account bets being void in the case that a player doesn't start.

On top of that the people following advice on the moneysavingexpert site didn't understand the risk of some bets being void.

Bets were placed on cricket and football where sufficient funds weren't on deposit to pay for them.  Despite these two precedents, when the latest incident of someone risking more than he had in his account, Betfair have gone against their earlier two precedents.  Given the size of the money involved, it is perhaps understandable they did so, but they did break Betfair's own terms and conditions that all bets placed even when the funds aren't in the account placing them, will stand.  Whilst the decision was understandable, the PR from Steven Morana and Tony Calvin saying that the void was in line with Betfair's terms and conditions has drawn heavy criticism.  The opposite looks to be clearly true, and Betfair need to draw up new T&C's urgently.

The issue with this thread is that so many bets have been voided which were matched before the dodgy £600m bet entered the market, and bets both pre and post the £600m bet have been voided in a side market too.   This stinks, and sets an abysmal precedent, and Steven Morana will have to resign if there is another crash soon, brought about by the direct incentive he has given people to crash the markets if they have in-running trades already which are going against them.

DivideByZeroError,
I suppose if you are using "technical glitch" as an excuse then the football falls under that as well. The site allowed customers to over extend their credit as in the VLV race.

It's not quite a technical glitch but you have a good point.  I think bf would have settled the bets had the liability been just a few thousand.

The often used forum thread heading "Betfair please settle the ...... market" now has a whole new meaning.

Has a customer ever had a negative balance as a result of a withdrawn horse being left in the betting in running?

Imv bf shd draft some sort of palpable error rule. As it stands, they have a rule that protects themselves for exceptional technical failures while we have no recourse in the case of fallers, trap bets, fat fingers, stuck keys etc.

I'm not w/ Sandown that were the whole race voided, no one wd lose. What about people who laid the favourite with a conventional book (price steamed in virtually a diagonal line all morning and early shows) and had carefully laid off pre-race? This is a rational strategy, esp . for commission minimisation; it is not a parasitical form of trading; it provides genuine liquidity and it's unlikely to cramp many competitors, as to get on w/ a book the player must be new, small and prepared to give the price back quickly. There is no reason that this person should be penalised for some shenanigans that go on IR.

*who backed the odds-on jolly with a bookmaker

I can believe esp. with the place market being voided, that bf have bent over backwards for some major liquidity provider who is offered derivative prices worked out from the main market. I have to agree this is a terrible precedent. Let these guys--whatever their value as an incumbent price-offerer to bf--rethink their strategy or be forced to stand their bets.

Bf need to make a company-wide and wholehearted decision to let the small, skilled grinders win. They are not a casino. This is part of the exchange model, just as form students are part of the tote model.

*who is offering prices

askari1

I'm with you over the palpable error rule for players, not just for BF. BF are treating players as "sub-contractors" in imposing a profits-tax yet they want it one way over big mistakes. It would have to be carefully worded and a mechanism for instant notification/claim would have to be in place.

As for voiding the race, well I'm clearly in a minority of one but I don't believe that BF have any responsibility for what players might or might not be doing outside their borders, only within BF.

I dont know why they ever even mentioned 'palpable error' over this incident. The fact that the horse was 29 is irrelevant. People 'misprice' all the time. How are they going to judge what is mispriced?

The key thing here is there was a technical failure and the liability was exceeded in a massive manner. What if a £600m liability had been offered with a price of 2.9? They would still have had to void the race if they had been faced with a multi-million pound liability.

Correct frog2

I think there are two distinct contracts in this case :-

1) between the layer and Betfair.

2) and the backers and Betfair.


The whole legal basis of the site is that Betfair is the bookmaker for ALL bets . Nobody bets with anybody else.

The fact that Betfair strikes an equal and opposite trade for every bet may be a secondary issue.

Betfair's credit control systems dictate that nobody can bet with them without cleared funds.

So, if Betfair tried to enforce contract 1) then imo they wouldn't have a "snowball's in hell" chance of winning - it was their software that failed. In any case they wouldn't recover £20m even if they did win and any publicity would kill the whole business anyway.

Trying to enforce contract 1 is therefore a complete non starter.

That leaves contract 2 - which is a different matter completely.

Betfair offered its customers an in running price which now it is trying to void. Does the failure of contract 1 make contract 2 void? I can't see how it can, they are two separate contracts - there certainly appears a case to answer to me.

There's no doubt about the "technological" failure in contract 1 - the software failed to protect the layer.

Does it therefore follow that there is a "technological" failure in contract 2? - Maybe..but maybe not.

Interesting times ahead.

It cannot be in bf's interests for there to be a perception at large that 'they void in case of technical failure'. Their site is more complex than that of their market rivals and the risk of such failure will be seen as proportionately higher.

My sense apropos JTG is that they have a clause in place that allows them to void. Possibly what I'd do in this case is honour all winning bets up to a ceiling, and rewrite their T&C with a palp rule. This might also operate in a circumscribed way e.g. all palp losses could be returned to annual losers up to a certain percentage of losses.

That this short thread is GB's sole contribution to the VLV debate shows how far this forum has sunk. It used to be the forum everyone turned to for a bit of insight but it's now as stale as betfair themselves.

Feck agree....

But many of the useful contributors got hounded by idiots, and were left repeating themselves endlessly to the next idiot that registered one day to criticised them the next, and were never seen again.

I am sure people like, Gary, Gettingbetter, Bayes, Frog, Smithers, god I forget some other excellent ones, but have all the logs, so I could go look them up

Then there were some excellent contributors that sadly got banned (I assume or know)

Adonis, Medemi, Dr who (actually never really know how the untouchable Feck – has not graced this list yet, Did you have pictures of David Yu? LOL)...

And really with the VLV case... apart form Sandown wanted derivative or potentially dependent bets void, seems the regulars of GB agree...

1)    Bets should be void
2)    Betfair is **** at PR
3)    Betfair’s IT is not as good as implied or expect.

So not much to discuss....

END of, and even on the racing forum where people have been “cost” 25Million, discussion is largely over...

Magician,
Why are you taking it on yourself to declare that GB think bets shold be void? Two of the three posts before yours where from long standing people who didn't say bets should be void. I don't think bets should be void I think Betfair should pay.

They say a technical glitch led to an exposure limit being exceeded, so what? Their terms say bets from exceeded exposure limits stand. I believe precedents have been set where Betfair paid before, why should the amount matter? The term states that bets stand, not bets that stand as long as it doesn't cost us too much.

Calvin said it would be a "massive call" for a "relatively junior person to make" to suspend an in running market. Though he said he hoped in future, the market would be suspended. That seems to me like Betfair didn't have proper procedures in place at that time.

Morana said "This is similar to the “palpable error” rule enforced by other bookmakers in the past." It isn't though because bets are contracts and bookmakers don't void, they settle at best price. I'm sure that punters would be happy to look at what was available in the market place and settle at the 29 also laid IR on another exchange. Re palpables surely they are reciprocal? Can the Peregrine Falcon layer have is £237k back?

Betfair say they have to have a cover all term in place to void anything they like or they would be a target. However they have said that nothing in this case is untoward. It wasn't an attack.

The payout is nowhere near £23m after commission/PC and Betfair take it back from future winnings!

Magician, I agree with a lot of what you say about the forum but I tend to agree more with Rollo on the VLV affair. On a fairly run exchange bets placed after that bet hit the market would be void (end of story) but betunfair have made most of the rods that are now being used on their own back. As far as me being untouchable goes I'm apparently on my 8th life. I hope I die soon because I spend too much time on this place. I'm habitually drawn back to the scene of the crime as if I'm expecting to find something other than a rotting corpse.

We'd miss you

Thanks cat, I doubt many would miss if banning was accompanied by a stoning. Mind you, that thought brings to mind the final words in Camus' The Outsider.

"For all to be accomplished, for me to feel less lonely, all that remained was to hope that on the day of my execution there should be a huge crowd of spectators and that they should greet me with howls of execration."

That's absurd :)

What was never established to my mind was although the guy had "less than £1000 in his account"-did he have access to any betfair credit facilities ????
BF are in sme way protecting their skimming toy for the future just in case another mysterious constellation alignment occurs.

It's the way of the city. If you win you get your bonus, if you lose someone else has to pick up the bill.

Feck

It's worse than that. If you lose, you still get your bonus!

Don't worry Feck, Mr Cameron is on the case and will sort out these greedy capitalists, in jig time. After all we are all in this financial mess together, aren't we?

A quick look at the man's background below will convince you he is the man for the job. Power to the people Davie boy.

David Cameron is the younger son of stockbroker Ian Donald Cameron (12 October 1932 – 8 September 2010)[4] and his wife Mary Fleur (née Mount, born 1934,[5] a retired Justice of the Peace, daughter of Sir William Mount, 2nd Baronet).[6] His father, Ian, was born with both legs deformed and underwent repeated operations to correct them. Cameron's parents married on 20 October 1962.[5] He was born in London, and brought up in Peasemore, Berkshire.[7] Cameron has a brother, Allan Alexander (born 1963, a barrister and QC)[8] and two sisters, Tania Rachel (born 1965) and Clare Louise (born 1971).[5][9] His father was born at Blairmore House, a country house near Huntly, Aberdeenshire, and died near Toulon in France on 8 September 2010.[10] Blairmore was built by his great-great-grandfather, Alexander Geddes,[11] who had made a fortune in the grain trade in Chicago, and returned to Scotland in the 1880s.[12]

Through his paternal grandmother, Enid Agnes Maud Levita, Cameron is a direct descendant of King William IV by his mistress Dorothea Jordan. This illegitimate line consists of five generations of women starting with Elizabeth Hay, Countess of Erroll née FitzClarence, William and Jordan's sixth child,[13] through to Cameron's grandmother (thereby making Cameron a 5th cousin of Queen Elizabeth II).[14] Cameron's paternal forebears also have a long history in finance. His father Ian was senior partner of the stockbrokers Panmure Gordon, in which firm partnerships had long been held by Cameron's ancestors, including David's grandfather and great-grandfather,[9] and was a Director of estate agent John D Wood. David Cameron's great-great grandfather Emile Levita, a German-Jewish financier (and descendant of Renaissance scholar Elia Levita) who obtained British citizenship in 1871, was the director of the Chartered Bank of India, Australia and China which became Standard Chartered Bank in 1969.[14] His wife, Cameron's great-great grandmother, was a descendant of the wealthy Danish Jewish Rée family on her father's side.[15][16] One of Emile's sons, Arthur Francis Levita (died 1910, brother of Sir Cecil Levita),[17] of Panmure Gordon stockbrokers, together with great-great-grandfather Sir Ewen Cameron,[18] London head of the Hongkong and Shanghai Bank, played key roles in arranging loans supplied by the Rothschilds to the Japanese Central Banker (later Prime Minister) Takahashi Korekiyo for the financing of the Japanese Government in the Russo-Japanese war.[19]
Cameron's maternal grandfather was Sir William Mount, 2nd Baronet, an Army officer and the High Sheriff of Berkshire, and Cameron's maternal great-grandfather was Sir William Mount, 1st Baronet, CBE, Conservative MP for Newbury 1918–1922. Cameron's great-great grandmother was Lady Ida Matilda Alice Feilding. His great-great-great grandfather was William Feilding, 7th Earl of Denbigh, GCH, PC, a courtier and Gentleman of the Bedchamber.[20] His mother's cousin, Sir Ferdinand Mount, was head of 10 Downing Street's Policy Unit in the early 1980s. Cameron is the nephew of Sir William Dugdale, brother-in-law of Katherine, Lady Dugdale (died 2004) Lady-in-Waiting to HM The Queen since 1955,[21] and former Chairman of Aston Villa Football Club. Birmingham born documentary film-maker Joshua Dugdale is his cousin.

From the age of seven, Cameron was educated at two independent schools: at Heatherdown Preparatory School at Winkfield, in Berkshire, which counts Prince Andrew and Prince Edward among its alumni. Due to good academic grades, Cameron entered its top academic class almost two years early.[23] At the age of thirteen, he went to Eton College in Berkshire, following his father and elder brother.[24] Eton is often described as the most famous independent school in the world,[25] and "the chief nurse of England's statesmen".[26]

Courtesy of Wikipedia.

Starti, he was on the Andrew Marr show the other day prattling on about how he intends sorting out people who are being rewarded for failure. I think he was hinting to them they should all have their bonuses stopped and their salaries increased to compensate (least ways those who haven't already done it). What a guy.

At least with Camoron you get exactly what it says on the tin. With Bliar it said Labour on the label but what was inside was more bankers and city than even a hard line Tory could have hoped for.

Wonder if Betfair will keep dabbling in the city. The LMAX project with Goldman Sachs hasn't delivered so far.

http://www.contracts-for-difference.com/news/industry-news/6171-uk-lmax-troubles/

Surely it cannot fail with the "masters of the universe" / "finest of international minds" overseeing it Rollo?

Feck,
GS only have 12.5% you would have to feel more confident about it if they increased their stake. That might be cheaper for them to do if it doesn't do too well too early....

You'll know it's failed when the "masters of the universe" sell their share privately to a client at "the going rate".