purple will lose market position to

At first glance it looked quite impressive four or five figure liquidity. Until I noticed the decimal point and the extra amount of pennies on every order. Is that for real?

Also, how do they 'calculate' matched?  Betduck the worst:

Daq£5 at 31.00 = £150.00 matched
Betfair £5 at 31.00 = £10.00 matched
Smarkets:???

If anyone from Smarkets is reading this:

I read your terms and conditions.  There are gaps and holes that you can drive a car through. 

At a glance: there seem to be no rules for each bet.

As one that lived in Canada and traded on Nasdaq and watched the rise and fall of several 'dot.com' businesses:

Those that simply copied a model were always several strides behind.  Unless you are able to completely revolutionize the exchange model (and offering a lower commission is not) or how exchange users place their positions, you'll have your turnover but your growth ceiling will be quickly realized.

Well it's been around for 4 years...

This is where the "dot.com" industry is all wrong. 

I honestly looked at the site and figured a year in beta.  If you look at betfair over the first four years, the innovations were there.

The world needs talented upstarts.  But it is about innovation rather than renovation.

sometimes you have to be careful what you wish for - if you have too many upstarts the muck is spread to thinly to grow any crops

too

100% agree.  In Canada, we had a surge in micro breweries.  They all did the math that 2% of the market was controlled by independents and they wanted a piece of that.

One Montreal brewery, St Ambroise, started with a few cases a week.  in 1987, my festival was dropped by my beer sponsor so I took them on and had a wonderful relationship with them for years after.

But why they grew and grew was because they came up with new recipes and flavors.  Peter McAuslan is passionate about beer. 

As an innovator, the 2% meant nothing to him and he built his own share.

I would love to see 2 or 3 exchanges genuinely competing... the competition would be great for punters.

these start-ups have massive barriers to entry.... in brand recognition...

I have been here for a decade and could porbably real off 10 exchnages that have been or are still here...

and yet, last week I heard of a totally new one, never heard of them before...

e-horse-x

now if I have never heard of them, and I have been looking to some degree, how does a casual perosn find them?

Sounds like a porno site...they shouldn't have too many problems getting clients

I just had it on a separate screen for 2:20 Kempton.

Odds and market movement are EXACTLY the same.

P.S.  There is no market information which is enormous (considering the time they have been around).

15:25 place market.  2 or 3 places

If they have a 2% account with betfair they can pass every bet placed with them through to their betfair account (if they don't get matched nor will you). If they're charging everyone 2% they'll pay less to betfair than their customers will pay them courtesy of the fact their combined profit (if any) on a market will be less than the total of customer profits on the same market. If every bet placed at betfair went through this other site then their betfair account would break even on every market such that betfair would get zilch while they collected 2% from individual who showed a profit. All of this assumes their betfair account would never get into premium charge territory (a big assumption as their site would obviously appeal to betfair pc payers) but it does show the stupidity of betfair's commission system.

*from any individual

I'm not sure it does show the stupidity. Effectively in this case the bets of a group of players are being funneled through Betfair by one organisation and the guys organising this get a massive commission discount, which means they get paid.

Is this by definition bad business for Betfair?

My summary isn't entirely true as they wouldn't be on 2% if they were breaking even on every market but I'd presume the bets would be getting placed through someone's account where the normal activity would maintain the account at 2%. If we assume that (and ignore the difficulties presented by the premium charge) then I'd have to say it's bad business for betfair unless you think the other mob's bets were mainly placed by non betfair customers (highly unlikely). Betfair are effectively paying the opposition while they build up their business.

I spent almost the entire flat season on a rival exchange getting an increment less odds than what was available on betfair but only paying a fraction of the commission. It's true that the betfair offer would disappear simultaneously so betfair effectively got my bet anyway BUT a) it helped liquidity on the rival exchange and b) such activity was probably helping the people arbing between exchanges decrease their betfair charges.

can anyone explain whats going on here in simple terms? If their bet fair comm is 2% and they pocket 2% on smark*ts, how is the money being made?

Onebigbet, Let's say in an A v B case you bet 10K on A @ 2.0 which they hedge in their betfair a/c and later on I bet 10K on B @ 2.0 which they also hedge to their betfair a/c. On those two bets their betfair account will break even so they will pay no commission whereas they'll pick up £200 in commission from whichever of us wins.

Exchanges obviously cost very little to run then.

Yeah, unless you start paying the top guys millions a year and develop products like LMAX

cheers feck - got to say its a simple but genius idea

got to agree with shapeshifter - this is nothing other than yet another BF copy.

Reading press articles and hearing one of the founders talk you would think a betting exchange was the newest hot thing to hit the tech industry.

I just do not see where they have any edge.

Reading press articles and hearing one of the founders talk you would think a betting exchange was the newest hot thing to hit the tech industry.

that's called marketing....it's all the rage these days

"Nothing other than another BF copy". What's wrong with that ?

http://www.youtube.com/watch?v=1n8rfFRvIH0

"What the world needs now is another pop singer
Like I need a hole in the head"

"Nothing other than another BF copy (with 2% comm.)" What's wrong with that ?

Artie, if the ONLY selling point is the commission, their neighbors at the daq are years ahead of them. 

And, as a consumer, if the only thing that people focus on is the commission, well, power to you and enjoy shopping at pound stretcher.

So,what would you like them to offer  ?

Not sure it is fair to say the daq are years ahead at all.

Of course people will like the 2% comm at smarkets, I know I do.

You get BF prices at 2% comm, whereas with the purple you pay 3% standard and the price is almost always slightly out of kilter by at least a tick, sometimes several.

Info on markets/teams etc can be found on numerous websites, you dont need it all on the actual exchange itself.

Personally I would rather pay 2% at real market price and find my data elsewhere. The purple is still too poor for trading on most events so really can only be seen as an outright bet option, which means smarkets and pinnys are almost always better priced.

Letting punters bet against each other with almost zero over-rounds and only charging winners relative to success is probably the best betting model to ever grace the silicon screen.

Doubters, the jealous, the competition, the plain unlucky form an orderly queue at your nearest cliff edge

And good luck to you all.

Does smarkets bet in-running?

No, but they seem to offer 5 places on horse racing

actually they do match bets in running, it just doesn't show in money available. If you post a bet it will be taken as soon as bet fair's price is gobbled up. However, you are always at the back of the queue, maybe a tick or two worse off - I don't think for trading in running it is any good, but maybe a mathematician will prove me wrong with the 2% comm.

Are they behaving just like any other bookie by hedging at Betfair, or do other bookies not use bet fair to hedge every bet these days?

TheVis
Does smarkets bet in-running?

Certainly on football/soccer they have various in-running games/fixtures etc.

One thing this last decade is quite apparent, online maverick and refreshing betting models are putting the oxygen back into gambling that the high street bookmakers have squeezed out by being biased one sided layers which now seems both antiquated and a failure as it relies on gambling addition to be stupid enough to accept a one sided business practice, thank god for exchanges putting both the fun and value back into betting sports betting.

amen!

I agree with SHAPESHIFTER I don't think Betfair will be dislodged until the next big innovation comes along and before anyone asks, if I knew what that was then I would do it!

@Feck.  If the assumption is that this is being traded by BF PC payers, then is it not fair to suggest that your example is redundant?
AvB Somebody lays @ 2.00 for 10k, you back @ 2.00 for 10k, but if you are a PC payer you will also opposed that bet.
Now if both A and B make 400 for their trade, then Smarkets pick up 16 dollars in commission.  A little less than your 200 figure. 
Now unless they are on 2% with BF, they can't make money doing that, unless they have pure gamblers betting also.

Now if you take your AvB example again, explain to me how every bet placed with them doesn't have somebody laying and somebody backing, at the same odds, for the same amount.

If I back something at 2.00, somebody must have layed it.  Makes no sense them then putting the same bets on BF.  They can't make money out of BF, they can't do anything except produce 0 profit trades with them by replicating the bets they receive on their own server.

Now in your example, they pay no commission on BF, but pick up 200 in commission on their own server.
Now if they didn't place any bets on BF, would they still pay BF no commission but pick up 200 from their own site?

Doesn't really make sense the argument that BF are paying them to succeed their business when I can't understand what BF are actually paying them or what money they are taking from BF in any sense.  If anything, they would just be losing some of their profits by using BF.

BJT, I already said they'd have a problem if they only attracted PC payers as their own betfair account would  quickly be in PC territory as well. I don't really get the rest of your argument though. Certainly if me and the other guy submit our 10K's simultaneously there's no point them hedging the bets on betfair but that's unlikely to happen. If they're only paying betfair 2% while charging their own customers the same, and every bet placed with them is hedged on betfair, they must end up at worst breaking even on every market. Doing that is risk free but you seem to be suggesting it's in their interests to echo everything on betfair and then stand the bets. That would be suicidal.

I always wondered why betd@q (or sporting options for that matter) didn't use this approach before the clowns at betfair realised having parasites operating virtually commission free wasn't on and introduced the pc. Both were charging less commission but the complaints always centered around lack of liquidity.

* they must end up at worst breaking even on any individual market

AvB Somebody lays @ 2.00 for 10k, you back @ 2.00 for 10k, but if you are a PC payer you will also opposed that bet.

I'm a pc payer and I wouldn't oppose my own bet.

if your bf bet wins then your still paying the pc right? i guess if you put in a back of 2 when it should be 100 in an obscure market and manage to lay your bet on another site at 2 then there is every chance your pc will be massively reduced and you only pay the 2% com to this mirror site.

A fair observation getintheir. Of course you risk ending up with the back and not getting the lay.

PS One other way they'll make a profit. The betfair odds might change in the other exchange's favour. e.g. They echo betfair's offer of 3.2, you try to match their offer, they submit the bet to betfair and get matched at 3.3 but they only give you 3.2. Like I said earlier, if the price moves the other way and they don't get matched then neither will you.