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BF have made pretty clear that now they are listed on a stock market the traditional betting exchange model is not one that is really appealing to them; They now owe a duty to shareholders to maximise profits each year, and it's clear that the bet365 model of laying the best mugs directly and focussing on games/casino etc is more lucrative than just being a middle man taking a small commission.
The question this raises for me is: Is it theoretically possible that a new exchange could ever recreate the original BF model of a low margin venue for gamblers to bet peer to peer? Clearly, the purple site is not an encouraging precedent. However, the original BF model WAS profitable and a viable business - just not as profitable and viable as the direct laying model which investors now demand from a post-IPO BF.
Might this leave a space for another operator to set up a traditional pure exchange, charging only commissions, perhaps with a less pro-trader anti-gambler commission structure than the original BF structure of a % of net market winnings, which people are on the record as stating was pretty much dreamed up on the back of a **** packet by the founders to mirror estate agents fees, with nobody envisioning the long term consequences (entirely understandable given the unprecedented nature of what BF was creating).
Could Matchbook or somebody in the Far East - perhaps even the Chinese/US government - one day decide that the traditional model was worth a crack, even if it was less profitable than full service bookmaking?
The biggest issues that for me make this scenario unlikely are: 1) Betfair's huge technical / development advantages. Any other operator would have a very long way to go to match BF's bet matching technology for example, as the state of purple under the bonnet apparently so vividly indicates. 2) Even in the event of a mass exodus to the irish mob, it appears likely that the rival technology would crumble. The network effects of BF's huge first mover advantage and 3) could such a new entity ever attract a big enough stream of fish to make it worth the sharks and profitable market making / liquidity providers jump ship and focus on the new location instead?
Of one thing I'm sure though - if the process ever started to gain traction, the speed of migration could suddenly become dramatic and grow exponentially, perhaps even within a few weeks. Or would winning just always be inexorably and relentlessly drawn back to the relatively easy pickings of devouring the mug fish who had perhaps not heard of the new exchange, and who were thereby ensuring that more "soft mug" money remained on BF rather than the new venue, thereby rendering it always more attractive?
The question this raises for me is: Is it theoretically possible that a new exchange could ever recreate the original BF model of a low margin venue for gamblers to bet peer to peer? Clearly, the purple site is not an encouraging precedent. However, the original BF model WAS profitable and a viable business - just not as profitable and viable as the direct laying model which investors now demand from a post-IPO BF.
Might this leave a space for another operator to set up a traditional pure exchange, charging only commissions, perhaps with a less pro-trader anti-gambler commission structure than the original BF structure of a % of net market winnings, which people are on the record as stating was pretty much dreamed up on the back of a **** packet by the founders to mirror estate agents fees, with nobody envisioning the long term consequences (entirely understandable given the unprecedented nature of what BF was creating).
Could Matchbook or somebody in the Far East - perhaps even the Chinese/US government - one day decide that the traditional model was worth a crack, even if it was less profitable than full service bookmaking?
The biggest issues that for me make this scenario unlikely are: 1) Betfair's huge technical / development advantages. Any other operator would have a very long way to go to match BF's bet matching technology for example, as the state of purple under the bonnet apparently so vividly indicates. 2) Even in the event of a mass exodus to the irish mob, it appears likely that the rival technology would crumble. The network effects of BF's huge first mover advantage and 3) could such a new entity ever attract a big enough stream of fish to make it worth the sharks and profitable market making / liquidity providers jump ship and focus on the new location instead?
Of one thing I'm sure though - if the process ever started to gain traction, the speed of migration could suddenly become dramatic and grow exponentially, perhaps even within a few weeks. Or would winning just always be inexorably and relentlessly drawn back to the relatively easy pickings of devouring the mug fish who had perhaps not heard of the new exchange, and who were thereby ensuring that more "soft mug" money remained on BF rather than the new venue, thereby rendering it always more attractive?
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Recreating the original bf model would be akin to opening a sweet shop where each individual sweet has to be scanned at checkout. I'm using the API to place bets and it can often run into 100's (perhaps even into 4 figures) of API calls just to get a few hundred pounds on an outsider at odds that won't be far off bf sp (the nature of the interface deters betting until near the off). Recreating betfair's parasite friendly interface with its pendulum swinging odds is exactly where other exchanges have went wrong.
I agree (in spite of the analogy
), if someone is going to take the business away from here they need a new idea or some fundamental improvement. And it has to be better for the punters, not us lot. We'll go wherever they go if we can.....
), if someone is going to take the business away from here they need a new idea or some fundamental improvement. And it has to be better for the punters, not us lot. We'll go wherever they go if we can.....
Several are trying different p2p approaches, using 'social media' as the angle ("bet against your friends / form betting groups / form pool groups").
Betfair tried this route 4 (?) football seasons ago (can't remember its name - sounded like a japanese fish) but couldn't even get it off the ground with the existing pool of customers.
The foray into virtual horse form reading was terrible to watch. Virtual form reading, races every three minutes. Someone out there got quite rich off of a sales pitch to betfair and others.
Anonymity is one of the keys to successful liquidity on an exchange (see big players remaining quite / see little player boasting about big returns on forum without betting more than a tenner).
And though an engine could be reproduced to match bets, ultimately betfair have the tattoo on the butt of the exchange brand.
It surprises me that betfair haven't atleast looked at brick and mortar presence to display better odds to the punters. There must be a way of presenting the platform to the shop punters, perhaps in the square mile, so they 'form opinions' and bet accordingly.
That said, there are types of exchange betting that can an extension of betfair. I have two that I am surprised they haven't done. But on their own, perhaps I could make a living but there would be no massive float or world domination. Just me and few techs with a gambling license.
Betfair are trying to link traditional to exchange. But perhaps they have to think five years ahead and grab onto the uni-crowd of today, figure out what they want and reap the rewards in 2017.
Betfair tried this route 4 (?) football seasons ago (can't remember its name - sounded like a japanese fish) but couldn't even get it off the ground with the existing pool of customers.
The foray into virtual horse form reading was terrible to watch. Virtual form reading, races every three minutes. Someone out there got quite rich off of a sales pitch to betfair and others.
Anonymity is one of the keys to successful liquidity on an exchange (see big players remaining quite / see little player boasting about big returns on forum without betting more than a tenner).
And though an engine could be reproduced to match bets, ultimately betfair have the tattoo on the butt of the exchange brand.
It surprises me that betfair haven't atleast looked at brick and mortar presence to display better odds to the punters. There must be a way of presenting the platform to the shop punters, perhaps in the square mile, so they 'form opinions' and bet accordingly.
That said, there are types of exchange betting that can an extension of betfair. I have two that I am surprised they haven't done. But on their own, perhaps I could make a living but there would be no massive float or world domination. Just me and few techs with a gambling license.
Betfair are trying to link traditional to exchange. But perhaps they have to think five years ahead and grab onto the uni-crowd of today, figure out what they want and reap the rewards in 2017.
Taikai was the Japanese fish thing. I never did understand what it was supposed to be about.
Thanks for that. The closest I got to it was takei but kept getting George Takei from Star Trek.
http://promo.betfair.com/Taikai/closedown/index.htm
http://promo.betfair.com/Taikai/closedown/index.htm
i believe Bodugi is making them nervous at Betfair Towers
I don't believe Bodugi is making them nervous. A cross between Madbid and the Tote/football pools...just another (albeit better) version of a previous defunct online effort called "ThePool" or summat similar
Sep 18, 2012 -- 9:28AM, duncan idaho wrote:
i believe Bodugi is making them nervous at Betfair Towers
Noticed this site. I think sometimes those on the exchange frontier think like Micro-Brewery's..."if we can get part of the 2% of the whole market, we are quids in".
Economics suggest that markets characterised by unequally distributed info. don't form. Imv this is always going to be true of horse markets, above and beyond the betting format.
Matchbook's charging structure is crap. Between 0.5% and 1% on turnover, with my current volume, I don't even have a margin high enough to make a profit after paying that! You cut out the people willing to bet when the odds are fair or only slightly in their favour.
In theory an exchange charging a flat low commission rate could work, the thing is that the fun bettors aren't hugely price sensitive, so they won't change their habits, just because they can save 30p on each £10 bet, even though the effect is huge over time. If they did do that, Betfair would have bankrupted the online bookies. But companies like bet365 have been able to compete on IT infrastructure and a rich set of inplay data features that Betfair hasn't matched yet.
With purple and smarkets charging 3% and 2% respectively, Betfair still has the best liquidity by far and the fun bettors are unlikely to leave purely for bet value reasons, for the same reason that the bet365 customers don't come to Betfair for better value.
All in all, Betfair is still the best, although by a smaller margin than it was in the past.
In theory an exchange charging a flat low commission rate could work, the thing is that the fun bettors aren't hugely price sensitive, so they won't change their habits, just because they can save 30p on each £10 bet, even though the effect is huge over time. If they did do that, Betfair would have bankrupted the online bookies. But companies like bet365 have been able to compete on IT infrastructure and a rich set of inplay data features that Betfair hasn't matched yet.
With purple and smarkets charging 3% and 2% respectively, Betfair still has the best liquidity by far and the fun bettors are unlikely to leave purely for bet value reasons, for the same reason that the bet365 customers don't come to Betfair for better value.
All in all, Betfair is still the best, although by a smaller margin than it was in the past.
Purple still use the size of the pool for 'liquidity'.
Betfair: £10 at 30.00 = £5 matched
Purple: £10 at 30.00 = 145.00
slight difference.
Betfair: £10 at 30.00 = £5 matched
Purple: £10 at 30.00 = 145.00
slight difference.
Betfair would be £20 in your example shapeshifter. Also
Betfair: £1000 @ 1.01 = 2,000 matched
Purple: £1000 @ 1.01 = 1,010 matched.
Also, betfair's figures are awash with ping pong money. Unlikely purple's are.
Betfair: £1000 @ 1.01 = 2,000 matched
Purple: £1000 @ 1.01 = 1,010 matched.
Also, betfair's figures are awash with ping pong money. Unlikely purple's are.
Sorry, meant to say.....
Betfair: £5 at 30.00 = £10 matched
Purple: £5 at 30.00 = 145.00
Betfair: £5 at 30.00 = £10 matched
Purple: £5 at 30.00 = 145.00
And fair enough on the 1.01.
When I compared, I looked at "pre-off"
And ping pongs do inflate Purple as well
When I compared, I looked at "pre-off"
And ping pongs do inflate Purple as well
betfair would need to collapse or close for another company to take off ! there in only enough demand for one exchange.
I finally got round to joining smarkets today, 2% commission can't go wrong. 
I don't buy that aspy. You could be right, but it has nothing to do with demand. It's just that the punters stick to what they know. Many don't like the bother of comparing prices with different sites as well.
If Betfair's tight spreads are replicated (and that is already being done), then often a punter on a 5% commission rate, can get a better deal elsewhere (either with a bookie or a 2/3% exchange). Betfair is still easily the best for longshot odds on things like the correct score market though.
A straight bettor who wanted to get best value available on each bet, would be betting all over the place, splitting their balance etc. As Betfair is best value over all, the 'somewhat value conscious punters' will bet here. If the rival exchanges can get close to matching the liquidity on all these little side markets (which is possible, because they just need pro's willing to offer), then things could change, although even then Betfair would still have the upper hand.
If Betfair's tight spreads are replicated (and that is already being done), then often a punter on a 5% commission rate, can get a better deal elsewhere (either with a bookie or a 2/3% exchange). Betfair is still easily the best for longshot odds on things like the correct score market though.
A straight bettor who wanted to get best value available on each bet, would be betting all over the place, splitting their balance etc. As Betfair is best value over all, the 'somewhat value conscious punters' will bet here. If the rival exchanges can get close to matching the liquidity on all these little side markets (which is possible, because they just need pro's willing to offer), then things could change, although even then Betfair would still have the upper hand.
It's an interesting question Howisurluck. Five or six years ago all the talk was of how exchanges 'are here for ever'. But with the escalation of PC and Betfair soon to be pushing everybody towards Beta I'm not so sure what the future holds.
Sep 19, 2012 -- 4:13PM, YOMOMMA wrote:
I finally got round to joining smarkets today, 2% commission can't go wrong.
I watched smarkets on one screen / betfair on another. The synchronicity was there.
Early markets with gap / when I placed a bet to be first in cue on betfair, one would appear on smarkets the same within seconds.
smarkets was discussed ages ago shapeshifter. I was saying they could just be passing every bet they take through to betfair. If they have a 2% account then they must pay less commission than their total clients will pay them on the same market. Assumes they don't have to pay pc though. The latter's a big assumption though as their service would obviously appeal most to someone paying pc.
Extreme example would be
No bets go to betfair, they all pass through smarkets first. smarkets break even on every market (so betfair get zilch in commmission) and smarkets get all the commission.
No bets go to betfair, they all pass through smarkets first. smarkets break even on every market (so betfair get zilch in commmission) and smarkets get all the commission.
I followed the correct score odds on the Barca v Spartak game yesterday and the odds on the smarkets exchange mirrored the betfair exchange movements within a few seconds. I placed my first bet and won and instead of 4.4%, I only paid 2% comm. No complaints from me, I only wish I started using them earlier. Basic 5% commission is too much especially as they don't refund the excess they take using the cross matching. I hope smarkets can continue to grow and provide competition to betfair in the future as it will mean only good news for the punter.
But it sounds like their MM is dependent on his bets getting matched at bf. As I understand it from their chat (may be wrong), the MM is not a direct smarkets employee but someone on a comm. from the site to put up liquidity.
If bf turn off the tap, or apply a special comm. rate to intermediary users, then smarkets' model is bust.
If bf turn off the tap, or apply a special comm. rate to intermediary users, then smarkets' model is bust.
If it was smarkets themselves who were relaying the bets to bf then you'd only get matched if they did. Otherwise your unmatched bet would just appear in the smarkets queue just as their unmatched bet would appear in the bf queue. I doubt anyone would be willing to put up that sort of liquidity outwith those conditions unless smarkets are allowing this "MM" the opportunity of knocking bets back unless he's matched on betfair.
It may be that bf cannot turn off the tap. This "MM", whether he be smarkets themselves or a third party with a special arrangement, may be a long standing high staking betfair customer who has built up a massive cushion against the pc.
It may be that bf cannot turn off the tap. This "MM", whether he be smarkets themselves or a third party with a special arrangement, may be a long standing high staking betfair customer who has built up a massive cushion against the pc.
^In fact maybe they've got numerous such people on board.
That's what I think it is feck--someone w/ a cushion against the pc who is tired of seat-of-the-pants betting. Or maybe looking for another sideline.
Does anyone have experience of trying to take a smarkets price only for it to appear unmatched in the queue?
Does anyone have experience of trying to take a smarkets price only for it to appear unmatched in the queue?
It seems to me the market makers are backing and laying off the bets they take elsewhere. If you ask for odds they can match somewhere else they'll take it.
Not to worry. In a few years, you'll all discover that this is just an extension of a 'matrix existence' and none of this actually existed......
Two new people who oppose each other at evens on here for £100 have to pay £5 to Betfair for matching them. This is an enormous rake. One day someone will offer people better value than this.
Revenue per user on social gaming is $1 per user per month. Revenue per user on gambling sites is $300 a month.
Facebook shares were up 8% today with the announcement of "Facebook gifts" being delivered door to door in the real world from users to each other.
Now, Facebook's listing is down 50% since launch, and they are struggling to tap revenue streams, especially through advertising on mobile devices. Facebook has the ultimate iron grip on its customer base/first to market network which vastly eclipses Betfair's dominant network.
Facebook need the money, and are ravenous for anything to boost income and share price. They have also just launched the first ever gambling products on Facebook [called Bingo Friendzy].
Facebook's foray into gaming is inevitable, and they will have vast advantages over Betfair. The problems highlighted above by Feck N Eejit of entering vast numbers of bets to try to secure a bet at the price he wants can be tackled by making the odds ladder less granular. [Yes, there is a trade-off between volume traded and granularity]. Betfair makes relatively very large profits by offering very poor value to small punters, as cited in the first example given, compared to the real cost of matching the two of them up in the 21st Century.
Facebook is wounded by its busted IPO, hungry for new revenue, profits and growth, in a way it has never been so hungry before [pre-IPO]. They wouldn't need Betfair's IT to juggle billions of bets - just make the increments on the ladder wider to torpedo the need for iceberg orders. They need the money, they know gambling revenue dwarfs social gaming revenue, and they will soon be offering a competitor to all bookmakers whether traditional or exchange.
Revenue per user on social gaming is $1 per user per month. Revenue per user on gambling sites is $300 a month.
Facebook shares were up 8% today with the announcement of "Facebook gifts" being delivered door to door in the real world from users to each other.
Now, Facebook's listing is down 50% since launch, and they are struggling to tap revenue streams, especially through advertising on mobile devices. Facebook has the ultimate iron grip on its customer base/first to market network which vastly eclipses Betfair's dominant network.
Facebook need the money, and are ravenous for anything to boost income and share price. They have also just launched the first ever gambling products on Facebook [called Bingo Friendzy].
Facebook's foray into gaming is inevitable, and they will have vast advantages over Betfair. The problems highlighted above by Feck N Eejit of entering vast numbers of bets to try to secure a bet at the price he wants can be tackled by making the odds ladder less granular. [Yes, there is a trade-off between volume traded and granularity]. Betfair makes relatively very large profits by offering very poor value to small punters, as cited in the first example given, compared to the real cost of matching the two of them up in the 21st Century.
Facebook is wounded by its busted IPO, hungry for new revenue, profits and growth, in a way it has never been so hungry before [pre-IPO]. They wouldn't need Betfair's IT to juggle billions of bets - just make the increments on the ladder wider to torpedo the need for iceberg orders. They need the money, they know gambling revenue dwarfs social gaming revenue, and they will soon be offering a competitor to all bookmakers whether traditional or exchange.
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