So, we finally became a sportsbook

The exchange cannot compete with the low margin sports bookies. Its stupid to expect them to be able to with 5% commission on winnings in markets where others provide 102% books to high stakes.

Lets be honest, the commission structure on Betfair has always favoured those who want to duck in and out of markets. This suits inplay but it is a horrible system for preplay sports betting. But Betfair lacks that flexibility.

In a two outcome event where each outcome has a 50% chance you should be able to bet as much as you like at evens and pay a 1% on turnover commission. Global turnover would flood onto here. It would require a reshuffle of thoughts but it would attract the actual opinion punters rather than traders. It would require a meet in the middle option.

This suits inplay but it is a horrible system for preplay sports betting. But Betfair lacks that flexibility.

To be fair, they've only had 10 years to get it right.

frog2 09 Feb 13 15:39 Joined: 01 Feb 08 | Topic/replies: 335 | Blogger: frog2's blog
The exchange cannot compete with the low margin sports bookies. Its stupid to expect them to be able to with 5% commission on winnings in markets where others provide 102% books to high stakes.

Lets be honest, the commission structure on Betfair has always favoured those who want to duck in and out of markets. This suits inplay but it is a horrible system for preplay sports betting. But Betfair lacks that flexibility.

In a two outcome event where each outcome has a 50% chance you should be able to bet as much as you like at evens and pay a 1% on turnover commission. Global turnover would flood onto here. It would require a reshuffle of thoughts but it would attract the actual opinion punters rather than traders. It would require a meet in the middle option.


People should remember that if you're on 5% commission you pay on average 2.5% of your stake in commission (because you only play when you win).

If you're on 2% commission you effectively only pay 1% on stakes when placing only straight bets.

'you only play when you win' should be 'you only pay when you win'.

Furthermore frog 2, in football this only applies to a few of the big markets. If you bet on correct score, half time score etc. Betfair (the exchange I hasten to add), is better value than any bookie in the world.

Frog, bf are further damaged by the way in which Asian hcaps have not caught on for their market. As either a bookie or an exchange w/ pared comm. they need a paradigm shift in mentalities to be competitive on these markets.

The question for them has to be 'where is the growth going to come from?--and customer and revenue growth in the short term.

I don't believe there are valuable football punters out there who can't check prices on oddschecker / betbrain / oddsmatcher and see (however they work out the commission) that one of fifty or so other worldwide books aren't better than bf on football (or American sports).

A bigger concern for them shd be winning back the custom of people who have become disaffected e.g. through losing to a fast pic player, getting fantastic prices on beasts that always run a stinker, or noticing that the price they took is almost always worse than what's available 5 secs. later.

And then they shd try to attract the specialist fans of minority sports. 3.65 get a lot of this market.

Plus, for me, however much this goes against how the culture of the company has evolved, they have to strive to be best in every respect on pre-off horses, where the exchange model has a natural advantage.

Its hard to believe TheInvestor that customers will join to betfair to bet on Romanian or Bulgarian correct score and half time markets. My point is that wee clearly loosing with sportsbook(low margin)on most popular markets because of the commision. Winners(not welcomed here)facing higher charges as well. Exchange betting model struggling as never before. Im full timer here. But I can't afford not to look for different job because unfortunately I'm a winner here and in curent circumstances(very low number of bets - 50% PC)I dont think my future(next 5 years) is here.

To join to betfair i meant to join to Betfair Exchange. The things that we need to start separate right now. :)
Betfair Exchange and Betfair Sportsbook in one place.
Well done Betfair managment team. Well done...

siwaadupa, you need to find a way to win in which bf win as well.

Or where the people you lose to can tolerate their losses for a long period.

Askari

Betfair promoted the exchange to the tax and levy authorities as a risk free betting operation.  It still is, betfair continue to win regardless of punters betting strategy.

People can tolerate losses for a long period with other bookmakers, so why not betfair?  its all betfair management propaganda to justify the premium charge. Bookmakers across the world continue to have a fresh supply of punters money, even though they offer worse value than the exchange.   Betfair would not have introduced their sportsbook if they did not believe this to be true.

Some of the odds on there are the worst I've ever seen anywhere. The Real Madrid game tonight; Both teams to score yes 1.61, no 2.1. Real Madrid wins both halves no 1.36, yes 2.87. Much more of the same on there, shocking stuff.

I HATE IT when then free money runs out.

TheInvestor2,
I agree those on 2% pay about 1% on turnover on straight bets. The problem is some people are on 5% and thus the odds on here pre event are uncompetitive. Lets face it - Betfair has morphed into something Bert never intended. It was supposed to be for gamblers to get a fairer deal. Instead we have have had to either be a courtsider or learn about adaptive systems to compete on here.
Things are in the pipeline. Betting exchanges are a great concept and they are not going away. If Betfair ends up retailing at a high a margin so be it. Someone else will step in. Maybe we will ultimately end up with a retail and wholesale market. Who knows?

hazel, this is not the basis on which bf are licensed. Even when their license was British, they had a bookmaking licence as well as one for exchange betting. Their current Gibraltar license covers both these activities.

The current situation for any non-UK client is that they are betting directly with bf as a bookmaker under a Maltese licence.

Bf carry significant operational risk on all their markets. Let's say that they offer a promotion on a market or generally. Either as purely an exchange or an exchange-fixed odds hybrid, there is no guarantee that bf can 'green up'. Then on markets like the malfunction (esp. on the places) with Voler la Vedette or the Grand National, where they advertised amazingly successfully and had to improve an SP of something like 160%, they bear a risk that it's impossible to slough off to the exchange.

It seems strange to me that there are people who are smart enough to win pc who can't make even a minor adjustment to their betting style to generate commission of over 20% of profits.

I'm not justifying the pc in its current form; it's not targeted enough, it stymies genuine liquidity as much as it encourages it, and the justification that it's there to cover marketing costs is staggeringly disingenuous.

If I have it right, you make your profits by full-booking horse markets. My own view is that the charge should not target you; you are providing genuine spot liquidity over a longer period than some recreational punters want to be on site, and your advantage is not skill-less or merely technical. I might have some souped-up form of transaction pricing that forced you to offer a genuinely full book rather than to trade increments on runners.

But if it's cheaper to you to offer books somewhere else rather than to stand the loser you least fancy (on whatever basis) in your successful races, then that's just the way things stand. It's sentimental to want the old betfair rather than to work in the way that earns you the most money.

"It seems strange to me that there are people who are smart enough to win pc who can't make even a minor adjustment to their betting style to generate commission of over 20% of profits."
Yeah! because not everone has time to waste and fighting for commision on corect scores and ov/un markets. I just dont like it Hazel.
The idea on the begining was:
-not baning accounts.
-You can win here.
-You have good price.

Why I would have to generate commision? What for? I want to bet. I want to win. Whats wrong with it? This place simply has not future in this shape.

Have they advertised it on the tv or in the Racing Post this weekend or is it a secret?

" It seems strange to me that there are people who are smart enough to win pc who can't make even a minor adjustment to their betting style to generate commission of over 20% of profits".
Yes I agree, very, very strange.
Siwaadupa's vague reply to this, along the lines that he has better things to do with his time ( than using it to protect his profits), seems very iffy to me.

siwaadupa, you 'want to bet', you 'want to win'--it's your losers who have no future and you, in the end, who will have no counterparty, betting that way. Even casinos know that the punter has to win almost exactly half the time, that it's only the overround or the numbers that earn anything for them.

If your betting is so selective and strike-rate so high, why don't you bet w/ conventional bookies? I don't think you bet on horses, where winners are shown the door immediately. Even if you need placers, I don't see why you uniquely need bf.

When the fish disappear only the best hunters in the sea will win.  Lots of pros on here are going to be wise to rethink things, because they are now the small fish.

I would be interested to hear from those who are "legally" combatting the PC charges.  I have tried and failed, maybe I am just not bright enough, as many on here seem to think it is easy?  Maybe it is more circumstancial due to my betting style? 

I bet predominantly in horse racing - taking positions pre event (I don't trade).  I will bet in most races when I deem there is value after commission calcs etc. 
This means I am happy betting on a selection whose value (I calculate) could be as low as 0.1% say.

So the novice answers to combat pc maybe:

1) bet bigger amounts... The concept of a betting "bank" prevents this as your risk is increased.  Also, there is a fine line between getting your "full" bet on at what is deemed value with the markets being so dynamic and moving so quickly.  Often a bet is not completely matched which can cause overexposure with respect to other horses/races. It is a real balancing act at this level!

2) back/lay in another sport using a strategy which you hope will break even after commission.  This is extremely difficult as you still need to beat commission.  This introduces additional variance and thus risk.  There is the risk of losing more via this pc reduction techinque (if doesn't work) and the pc charges themselves, ultimately giving yourself a much bigger loss.  Lets take this a step further, you have managed to identify a sport where you can break even long term.  Depending on your pc levels, you will need to bet into that market at a certain weekly turnover.  Lets first consider the amount your weekly "break even" turnover needs to be in order to combat pc. A reasonable estimate maybe a requirement to stake double your normal turnover on this other sport (using my experience). 
This will probably mean you are forced into diversifying into a sport with a high turnover...so restricted to football or tennis (looking at this from a horse perspective)?  Getting money on... you wil have to restrict yourself to the main markets.  Then comes the problem of your betting "bank".  You have just created yourself extra risk in the form of leverage.  You also need to have enough money in
your account to place the bets.  This becomes a problem with football with the majority of games played on a Saturday.  So your money will then be tied up in your betfair account.  But this is a risk in itself (esp imo how things are playing out with Europe etc).  Consider that all 40%+ pc players are probably playing with a bank over 250k (but most won't have their "full" bank at betfair if they can help it).  Who would want to risk keeping that amount at betfair esp when you can be earning interest elsewhere (betfair provide no good reason to keep money tied up here).  On this subject of diversification it is often advised "concentrate on what you are good at".  My preference is to simply pay the PC but try and improve my models etc.

...in fact isn't diversification one of the main reasons for Betfair's anecdotal deterioration - a perfect analogy lol?  They tried diversifying into too much. Take for instance their trading platform that completley failed (if still running? Ironically I can't remember its name lol).

I would love someone to suggest a way to combat the PC given the above considerations?  I hope this demonstrates how difficult it really is to beat the PC.  Either that or my ineptness lol!

Well said Getafix.  I'm sick of the number of people who come on here telling us how easy it is to avoid PC with 'a minor adjustment to there betting style'.  I bet the one thing these people have in common is they don't pay PC.

Getafix, I managed to get my comm generated above 20% with the original PC, by simply increasing variance. Normally you would place a premium on consistency, the PC incentivises you to do the opposite, so I started having more straight bets, and was less willing to 'pay' (give away small amounts of value) in order to smooth returns.

I expect the same will eventually happen with 40%, but right now I am paying quite a lot. Taking special measures to get your comm generated up on 40% PC isn't really worth a great deal. It is on 50% or 60% though.

Anyone aware if they advertised it on the tv or in the Racing Post this weekend or is it still a secret?

I honestly don't think it's a big deal as long as Betfair are clear as to what they are doing.  Sending people to the "wrong" homepage without informing people is confusing and misleading and the longer that goes on the worse it's going to get.

THEY ARE TRYING NEW AVENUES TO TRY AND MAKE THEIR SHAREHOLDERS LOTS MORE PROFIT ,SO THEY WILL BE HAPPY ,THEIR ONLY TRYING TO DO THEIR BEST

ITS ONLY LIKE A SUPERMARKET GIVEING YOU A CHEAP BOTTLE OF MILK THEN MAKEING A BIG PROFIT ON A BAG OF POTATOES

Getafix
All good points.
There is no doubt that there is a  " price " involved in reducing PC liabolity, in the form of many of the things you mention.
Probably the biggest one is the key one you mention of the need for a bigger betting bank to cover all the extra bets you are required to make at " break even" levels.
Imo this is much , much greater than increasing your turnover by a factor of 2 or thereabouts, as you seem to suggest.
More in the region of a factor of 8 to 10. Though it essentially depends entirely on how high is the strike rate that you are trying to mitigate.
As far as getting any and all such breakeven bets on, it is not currently that hard if you are operating in the main mkts of ( say ) football, as you are spreading this large increase in turnover over a a large number of games at a relatively small amount per game.
Liquiddity has not declined that much, at least not yet.

2) back/lay in another sport using a strategy which you hope will break even after commission.  This is extremely difficult as you still need to beat commission.

Why do u need to beat commission? Surely its all about earning commission generated points to stay under the 40%,10% and 5% levels.

I STILL THINK MY ANSWERS THE BEST ,AND ITS EASILY UNDERSTOOD

Do Wah if people go to the supermarket expecting cheap bottles of milk and all they can see is potatoes they are going to be fecked off.

"it's your losers who have no future and you, in the end, who will have no counterparty, betting that way"
True. If I wont't have losers than I won't be here. I can assure you if that day come, most of you will be on my position as well.

FINE AS FROG HAIR
" It seems strange to me that there are people who are smart enough to win pc who can't make even a minor adjustment to their betting style to generate commission of over 20% of profits".
Yes I agree, very, very strange.
Siwaadupa's vague reply to this, along the lines that he has better things to do with his time ( than using it to protect his profits), seems very iffy to me.

I guess that you are on 20%PC and you are concerning about to pay less PC(you protecting your profit)?. That's correct thinking. But I'm more concern to win on the market and have more money from there rather than focusing on markets where I can generate commission.

"Liquiddity has not declined that much, at least not yet."

It affected me on soccer, tennis market. At least 20, 25% less bets. Absolutely nothing to do on Nba Basket. Where only scalper is happy.

Iffy and vague for me is just the process of generating commisson. I can at the same time (when Im generating a commission) bet on a different market and earn money for Betfair in just different way(PC). But I need to be concerned about generating commission. I don't understand why Im being punished for that?

Right now new customer need to face:
-1st charge after he wins around 10k.
-2nd charge after 250k.
-He needs to start generate commission to pay less charges.
-He needs to face competition from their own website(sportsbook)who supports their more profitable product.

Its not a secret that these factors may only discourage new(or existing)customer. And we are going straight away as forex is: where 90% of them are speculators.Good quote from @Rafael Nadal:
Because of these factors BF exchange became complicated and only for sharks:
When the fish disappear only the best hunters in the sea will win. Lots of pros on here are going to be wise to rethink things, because they are now the small fish.

I only dont believe that we will be that big as forex is.

YES BUT THEY STILL GO BACK FOR THE CHEAP MILK

Frog2
I think he might have meant that it's no point in earning a net after commission loss on all the extra bets which is effectively greater than the PC liability you are trying to reduce.
If so, then I think we can all agree on that at least.

AND IF THEVE GOT NO POTATOES AND THEY NEED THEM THEY WILL BUY THEM
IM OFF NOW IVE EXPLAINED IT THOUROULY ,I NEED TO DRINK SOME OF MY CHEAP MILK BEFORE IT GOES SOUR

Siwaadupa
I'm having a bit of trouble interpreting all that you say in your posts.
But let me say that I do understand your quite understandable frustration at the basic need to have to worry now about things like havibg a too high strike rates, rather than just getting on with being a very successful bettor.
But the exchange has been swamped by players not paying their way in terms of what they get out of the exchange related to what they put into it, and we all unfortunately have to live with that and pay the price.
We can't turn back the clock to how the exchange was at the beginning.
Thus you have to deal with things as they evolve.
Also it is probably an understatement to use the phrase " --- a minor adjustment to betting style to generate commissions of over 20% of profits ". It's probably not really all that minor to most, particularly those of us not botted up.
As has been said before the PC is flawed as it has captured and entrapped many quite innocent, successful bettors.
Maybe you're one of those. In that case you have my fullest sympaties.
But don't extrapolate your situation ito one of forecasted general demise of the whole exchange concept.
It's here to stay, just not as a no brainer for easy profits for a smart few.

Clydebank,

The 16:10 at Newbury yesterday was deemed the "Better Prices On Betfair Mobile Novices' Chase"

I've just installed their Mobile Sports app and am not seeing too many better prices at all   (there is also an exchange app as well - so they have split the offering on mobile as well as pc)

Investor, that is a good strategy and certainly worth doing by those who get caught in the net who do a lot of trading.  Makes you feel sorry for those caught at 50/60% at inception who were judged retrospectively as they had no way to reduce their pc by taking on more risk in anticipation...

I agree FineAsFrogHair, though my point, and this is relevant to Frog2 response... Basically for my point 2), I was saying you need to reduce your pc by paying more commission. This could be done by a break even strategy.  If your calculations are out by just 1% (i.e., losing say 1p per bet) and your turnover is 10x bigger, then you're losses will be incurrecd much much quicker!  So is very risky applying a "break even" strategy when you have to increase turnover excessively!

In my opinion the best way is to just pay up and hope this is helping the exchange; as a healthy/efficient exchange is what we all want. Trying to find more profitable angles (as opposed to break even) is the best strategy imo.  It is just frustrating to pay the pc for it to feel frittered away by non-exchange bf gambles i.e., new sportsbook/that trading platform I was on about/casino etc!  I am hoping bf have got this right as I worry it could be very costly if they are wrong (in terms of it attracting more people to the exchange).

the thing is   i cant bet  on anything   i have  shy away  from betting   

use to bet like there no tommorrow   and now it like 

bet on football even money shots    hey have  40 to 60% of that  in pc on one big football bet   


bye   dont u get it  it killed  betting out right

You can worry about pc until you are purple in the face.

I understand that laddies have at least one development that will catch the eye.

Returning to the opening topic, it will be interesting to see how, or if, laddies incorporate purple into their sportsbook activities.  If as they say they will use purple to manage their liabilities, it could be an interesting place.

and  it only 1% to 3%   somewhere  nevermind it only a bet   

but      not sure  why pay 40% to 60%  on that bet

taking too much out   no way

can be a bank  of 500 and make 5k ayear and pay pc

silly thing is they backtrack    to    the golden years  of 2002 to 06    but  now    it all small change    and killing markets  on the  way 

one word 

greed  and   pc     is not  right balance % wise

FINE AS FROG HAIR 10 Feb 13 00:52 
" It seems strange to me that there are people who are smart enough to win pc who can't make even a minor adjustment to their betting style to generate commission of over 20% of profits".
Yes I agree, very, very strange.
Siwaadupa's vague reply to this, along the lines that he has better things to do with his time ( than using it to protect his profits), seems very iffy to me.

-------

You don't seem to have a clue what you are talking about, and your swipe about him having better things to do with his time borders on insulting.

'Fancy a pint tonight Siwaadupa?'

'No thanks mate. I have to stay in to trade some markets on the Rotherham Swindon game that's live on Sky, in the hope that I'll save 40 quid of premium charges should everything go in my favour.'

'Ok. What about tomorrow for the Champions League game?'

'Sorry, mate. I have to stay in and trade on that aswell. Premium charges don't reduce themselves.'

'Wednesday or Thursday suit better?'

'No not really. More Champions League and Europa League action. Don't want to be sat in the pub seething at a goaless second half that might have saved a few quid of premium charges if I the markets had gone the way I'd hoped and my bets had been matched.'

'Fair enough. How about getting a bite to eat on Sunday?'

'Don't think so. It's the Aussie Open tennis so I need to trade markets on that. Then there are 2 premier league games to trade on, with the Spanish games at night. I suppose if the final isn't a 5 setter I could fit in a quick bite around midday. I have to get those premium charges down. I'll let you know.'


People having families, friends, hobbies and social lives. Yes, very, very iffy.

Oh and I'm aware that the Aussie Open doesn't coincide with the Champions League. Substitue that for some 3rd rate tournament that takes place every other week.

You seem to be the type that would pick up on something like that rather than address the point so I thought I'd better make a correction.

Nice post john.

The best way to reduce pc is to bet less on this exchange, not more

agree with Hazel about PC,only thing that will change the thinking at betfair towers is serious competition and lets hope thats not too far away

All good points John, but only if you are a recreational punter.
If you're on here to make a professional living, then such sacrifices might just have to be part of the equation.
Or have you magically found a way of earning a living that involves no personal inconveniences ?

betfair should be giving the charges generated by PC back to those that lost on there bets . imo

at the very least , all profits from PC on horse racing should be invested tp improve picture speeds , which would then give more players a chance to win , attract new/old customers to betting in play , from all over the world if streams were quick enough , which would create more commission , i think

Also John, what's your problem with all this need to combat the PC ?.
If I remember you rightly, you sell some sort of bot product to BF users, don't you ?
So all the better for you, if now more people need some sort of bot to implement high volume B/E strategies, without ruining their home or social lives ?

If you had any idea what it involves in practise, and all the things that have to go right in order for the pc to be reduced by a significant enough amount to make such 'sacrifices' worthwhile then you might not post such nonsense.

The point stands whether recreational or professional. The time and effort it takes, not even to reduce the charge but simply to give yourself a chance of reducing the charge, has to be weighed against what you may possibly gain.

Siwaadupa said as much and you deemed this to be 'iffy' and 'strange' which is what I took exception to. It is a stupid thing to say and smacks of someone not knowing what they are talking about, and talking about it in the manner of a know all.

Finally, if reducing the charge is as easy as you seem to think, then I would find it strange as you would put it, if you don't spend 18 hours a day on here picking up all the free money on offer.

I bid you good day. The Guimaraes B game won't trade itself

A bot salesman??

You remember wrongly. I have never even used a bot.

GREAT REPLY JOHN92

Spot on John
You can tell frogs never paid a penny

If you're on here to make a professional living, then such sacrifices might just have to be part of the equation.
Or have you magically found a way of earning a living that involves no personal inconveniences

I'll make sure I show the wife that comment. I'm sure that will go down well

Curly wurly and John
I think all you can deduce from this difference of opinions is that the PC affects us all differently because of the entirely different betting strategies we all employ.
In my case I don't trade any games ever and so am not enslaved to watching and following games for hours on end.
If you have to do that to make a living  on here, if that is indeed what you are aiming to do, then you have my sympathies.
It must be tough, and must be made tougher by the PC problem.
But the bottom line is that it is a problem that is probably not going to go away, and you have to deal with it.
If the price of doing so is too high from a personal lifestyle point of view, then clearly you have a tough choice to make.
Do it tough, or find an easier way to make a living.
Btw my wife already thinks I love BF far more than her.
I know that at elast it costs me less than her.

A final post from me.

As you say we have do deal with it.

Just don't imply that premium charge reduction is easy.

Also John I'm sorry that I have obviously mixed you up with someone else.
I did not mean to insult you by inferring that you were a bot salesman in the manner of being a used car salesman.
Apologies if that is what you thought for any reason.

Nothing is easy on BF any more.
The good old days are well gone.

No worries on that score, I was confused rather than insulted as bots are alien to me. Indeed for many years I was blissfully unaware of the auto refresh app.

RichWill--well, absolutely the only sport I can comment on with a shred of authority is horse racing.

To the best of my understanding, hazel is paying pc as he lays the whole field, always greening up, at an overround that assures him a profit. If he only has winning markets, his comm. will be at the maximum of 5%. He needs to lose on four markets for every five he wins to the same amount to dodge the charge. I don't see why he doesn't just leave the horse he least fancies out of his book (or alternatively back one he likes).

Or rather I do see why he doesn't do this. He can make the same book, just at lower volume (and for 3% comm.) at bf's rival. Or equally he is used to a steady stream of profits, dependent only on his still being able to full-book.

Especially if he is betting manually, I see no fair reason why bf shd want to charge a punter of this style, but equally no reason why hazel and bf shd need to be together.

askari,  I do virtually the same as hazel,  I lay books on the win and place markets.  Purple is not an option at the moment because of the liquidity.  We will see what happens there in the coming months.

Getafix, when are you finding these value bets?

If it's close to the off, then you don't need bf. If it's a long time before, how are you getting matched on bf's tumbleweed markets?

Especially in the absence of a rebating mechanism (which ideally shd roll with your current lifetime p&l), then bf have made it worth your while to bet virtually anywhere else!

askari I did indeed lay books in the past, and make a handsome profit.  However things have changed on here and it is nowhere near as easy as the early days before traders narrowed the margins.  Hence I pay 60% now regardless of how I operate.  I have tried having losers in the book, but I still get clobbered with the 60% charge.  The problem as I see it for me is that the charge is based on 11 years of past history. If it was based on the last year I would try to adapt.  There is no way I can reduce the charge to 50%, let alone 40% (20% seems like heaven to me), as the sums of money involved are beyond my means.

So I am stuck, I either pay the PC2 or move on.  I am happily paying 5% (although 3% is available) on the rival exchange, whereby I do have losers in the book.  The difference being that I don't get clobbered with the 60% charge.

I am a recreational player, I am not trying to make a living from gambling.  I pity the full timers on here that have been hit with the charge. 

On moving to the rival, perseverance was needed at first, and tweaking of strategies. I keep a diminishing interest here for information purposes.  I used to love Betfair, It has been very good to me in the past, but I cant see the PC2 situation getting any better, so its a no brainer for me to move on to other things. 

Adapt and survive should be everyones motto.

RichWill, if you were able to arb at a high enough stake, in principle you wd avoid the pc.

My plan to avoid it, when I saw I was 300GBP away, was 1) arbing, 2) cross-platform exchange arbing, following momentum (more expensive tho' you only pay comm. once, 3) opinion bets on here at breakeven. It so happened the arbs started to hit, inc. a big multiple, and it now looks like I will never pay the charge.

The absence of a rebating mechanism and the short pc charging period makes it more likely that an arber will fall into the pc by chance. This shd change.

(Actually with a fixed odds offering I think the pc should be abolished as such).

rcing, I for one am sick of tired of not being able to watch a race, esp. one I bet on so I cd see it, because 'an unexpected error (ext113) occurred. Place a bet to watch this market'.

They shd get what to them are the small things right--the video loading, the site not crashing, bets not being replicated, bets either appearing IR or being cancelled consistently when they are placed within the reconciliation etc...--and only then worry about long-term strategy.

They will please no one being such a mixed bag.

hazel, the difficulty is that bf's view of you is that you're taking money from under the nose of their incumbent partners who pay significantly more than 20% profits in commission.

You were market-making more efficiently than they were by being nimbler.

Imv the company's thinking is too short-termist, and can only get more so with shareholders. Rather than needing 3.65's level of profits, they need the strongest poss. exchange proposition.

The amount lost by all kinds of gambler last year in Britain was just over 17 billion dollars. The amount lost in China was under 16 billion.

The exchange that partners the Chinese govt. on the only legal form of gambling in China will dominate the gaming space. It'll be Bet 3.65p indeed.

askari,  I'm not far off paying 60% PC,  once that happens I'm finished on here unless they they scrap it or change the rules.  I don't have fast pics, don't bet in running, enter all bets manually and lay every horse in the race.

Betfairs view is a joke .
any one in the pc bracket stays away.

Wrong Coner.
The better players have adapted to the PC and are still making good money on here.
But I suspect deep down in your heart, you sort of know that don't you ?
But keep the debate going by all means.
All good fun, if you're time rich ( as I for one must obviously be).

Fwiw I think people are being a bit harsh on FAFH. BF can and do move the goal posts and we have to adapt, if that means extra work load then so be it. For someone to say they're not prepared to do the extra work, well that's their choice.

Any predictions for where exchange betting will be in say 10 years time? I really wouldn't like to say if BF will still hold the power? I think it could swing to a geared up competitor if they're willing to perhaps undercut BF and perhaps spend millions on advertising. Will be interesting to see what happens.

Are you crazy Trevh, leaping even partially to my defence ?.
That's a quick way to perdition on here.
Btw I shrug all these personal attacks off.
After all I'm only expressing my opinion on things, not claiming ever either to be correct or even particularly credible.
Hell it's only a gambling forum after all.

Seriously though your post was welcome support.
After all it is common knowledge on here ( or at least it should be) that your success is pretty well defined by all the very hard work you put into achieving it.
Many should use you as a role model, truth be told.

" It is a stupid thing to say and smacks of someone not knowing what they are talking about, and talking about it in the manner of a know all." - john92

Every single post FROG HAIR makes is like this. He used to just blatant fish for info but when that didn't work he's adopted this smart a rse posting style, I assume to aid him in learning by correction.

His posts consist of either non-stop drivel or a rehash of something he has read somewhere,either in a book or elsewhere on the forum.

"---he's adopted this smart a rse posting style, I assume to aid him in learning by correction."
Far too cunning for me I'm afraid.
But I thank you for the somewhat indirect compliment, all the same.
Btw Sliced, are you perhaps feeling a bit slighted by the fact that I have not apparently ever bothered to rehash anything you have ever said on this forum?
Give me something good to work with, and I will correct that omission.

Just read this entire thread, there is one thing I am sure of, lads are not going to try and take bf on in the exchange market place with an aggressive marketing campaign and seeded liquidity exchange. The Lads fixed odds product and  therfore the Lads market share has lost massive amounts of ground over the last 5 years to WH, PP, 3.65 and lads are desperate to reverese this. They are buying BetDQ for its  technolgy as they believe it will allow them to be more agile in giving fixed odds punters more/better bet offerings and more in play betting, as they will be less reliant on an Openbet ....for the same reasons that bf are morphing to fixed odds Lads will concentrate on fixed odds- they both believe thats where they can make the most money.

1978Reggie,

Do you not think Ladbrokes will use **** as a lower cost route to hedging their positions than using Betfair?

Also, what do you think was behind their decision to acquire just 10% of TBHG, the technology provider to ****?

I don't expect a huge advertising campaign but I do think we'll see a significant increase in liquidity and markets covered.

Hi Templeton, re the 10% I think that's the min they need to be able to utilise the technolgy, also Lads have a call option to buy the remaining 90% at a later date. Re the hedging, lads wont be hedging anything through BDQ, firstly the big bookies hardly ever hedge, they only hegde running up money from warm players, and 99% of the time when this happens (warm money running up) then there isn't a strong enough market to get out either on BF of BDQ. The frequency of hedging by sportsbooks is totally overstated on these pages.The big books concentrate on getting their prices right and get the player managemnet and market limits in place. I'll be watching to see what they do with BDQ, my guess is that after the failed bids for sporting, and 888, Glynn had to be seen to be aquiring to genarate growth and with the internal delays in the Lads product pipeline fresh in his mind he's bought a technolgy solution to try and play catch up.

Reggie, I agree that lads have many higher priorities in buying an exchange than taking bf on in the exchange space.

In order, these might be 1) to buy something or anything, after their abortive purchase of sportingbet, so that the mgmt. cd point to some use being put to a rising (or perhaps bottoming-out) market capitalisation and revenue-based warchest;

2) as you say, to buy a technology provider to catch up with Hills, P*wer & 3.65. They will have seen the rising price of the portion of WHO that the bookie don't own and have considered that the costs of doing a deal with Playtech are steep. Or perhaps they want a negotiating chip in any deal they strike with Playtech--none of the big three bookmaker chains has anything like the sportsbook and casino game expertise of the Israeli operator, yet in partnership they are left with an unsatisfactory profit share.

It looks like the quarterly earnings for Mountains online were something like 50 million EUR, of which Playtech get 29% for preventing the company from being arbed. There seems to be some sort of implicit admission that Mountains cannot run a sportsbook any more efficiently through liabilities management or knowing the correct price. They are rather dependent on excluding winners, cracking down on the activities of known price-takers and adjusting so that they sit under the exchange price;

3) to hedge more cheaply than they can with bf, though this will be dependent on their purchase acquiring liquidity. They're in a bit of a chicken and egg situation as the other exchange won't make any sort of inroads on bf w/out new seed money, and without seeding they don't gain a hedging facility / information of any monetisable value;

4) over a longer time period, in having an exchange they gain extraordinarily valuable information on who is backing what for their sportsbook;

5) Again over the long term they can have the price proposition of their bricks and mortar rivals, especially the sp mechanism for horses, in their sights. With a liquid exchange behind them, they should be able to beat this and advertise the fact. The primary problem is migrating custom from bf to their exchange, something that is not poss. with commission/transaction pricing alone without a stable platform and usable interface. This should be their primary focus for investment.

My own sense is that this is a moment of change and convergence for the industry, where none of the management teams of the established firms, w/ the possible exception of Hills and 3.65 (if you count them as established), quite know what they're doing or where they're going.

Lads and bf both have to sight down a sense of internal malaise, the idea that they've lost ground or have lost their way, with the internal conflict that brings. Bf, in particular, no longer feels like a single company--the people that out the arcade games on the front page of the new sportsbook have nothing in common with the management of Timeform.

If I managed bf, the share price trajectories I wd worry about, in ascending order, would be 1) laddies; 2) P8wer's, and 3) Playtech's, which is up over 110% in 13 months, largely on the back of existing operations. But I wd not draw a hasty inference from this. There is a natural limit to the savings that can be made through excluding winning punters, and less of a natural limit to the people worldwide that can be attracted to betting at the market-efficient price.

Bf need to understand that 'the good will out'--that they will always win w/ the exchange--but that the last thing they can afford is a repeat of the endlessly painful scenario in Victoria, where they contracted out their negotiations with authorities to someone one, and had, slice by slice, to give up every key feature of their customer proposition in order to stay in the marketplace at all.

Bf now offer Singapore horse markets. As a first step I would make sure I had a Chinese/Thai speaking go-to guy for every kind of liaison w/ the Hong Kong and Singaporean regulators, making sure that in a controlled market, I was w/ the govt., and in a liberalised market, not losing to some local 3.65 like sbo.

reggie, just seen yr reply; it's also chump change for Lads at their market cap.

*lads and bf have to FIGHT down a sense of internal malaise

Fwiw the Betfair homepage has now changed for new customers and is different to the fixed odds home page for those that are logged in, so that new customers can now actually see links to the exchange.  They've moved the boxes around so that the link to the exchange is now in the second most prominent box rather than in the least prominent box.  Also the barely visible link to the exchange in the top left corner now has a coloured arrow pointing to it.

Just been thinking how the Betfair Sportsbook could hit the ground running and just come up with a brilliant promotional idea.

Into the lion's den once again.
At the risk of irritating again apparently many on here with my extreme ignorance of all things betting related, I would like someone to clarify the following for me.
How exactly is a fixed odds price any different from from an exchange price ?.
If I get set on the exchange at a certain price, it is fixed forever.
So what's the difference ?.
It can't be the ongoing fluctuations that differentiate these two products as the the fixed prices are being continually updated ( basically to reflect changing demand) just as the exchange prices fluctuate quite naturally in response to demand factors.
So what exactly am I missing here ?
Or is it just that BF has identified that it is losing potential new customers simply because the exchange concept is on first sight a bit bewildering and baffling to many ?. If so, then their move into a " fixed odds " alternative makes great sense surely.
And why should it materially impact the exchange as these potential customers were seemingly being driven away from BF by the complexity of the exchange concept. They weren't going to be on the exchange anyway, were they ?.

Thanks for your reply, Reggie.  What you say makes sense.

FATH, you only need to imagine the conversation at bf HQ:

'Joe bets 20 quid on average five times a week at 3.65, for 50 weeks a year. He loses 12.5% of his stake on average per bet, and the bookie makes 625 quid off him a year.'

'Jack bets the same number of times, to the same amounts and with the same average loss per bet on the exchange. Half of the time he is matched by one of the most efficient bettors active on bf, who pays only 5% of his profits in commission. On this share of his bets, bf the company make 15.62 quid a year; and let's say that on the other half of his betting bf make some 200 quid a year.'

'So you have two identical punters, each of which lose 625 quid or an entirely affordable 1.70 or so a day over the year for the pleasure of an interest, of sometimes being proved right and of fluctuations.'

As an aside, it is also very likely that Joe and Jack, the recreational punters, will have median losses that are far less than their mean loss. A big part of their losses will come about through overstaking when chasing; and after a bigger loss, they will cool off for a time before resuming betting. That way, a conventional sportsbook can have 107% or better football margins and bet to 1.25% overround per runner on very competitive races and still show a customer retention per stake of better (for the bookie) than 85%.

So, the thinking goes in bf HQ, '3.65 hold onto 625 quid of the total amount lost by the punter and bf something like 220. Why are we in exchange betting when fixed odds offers so superior a return?'

I will have got the numbers wrong, esp. on share of losers' stake held onto by counterparty winners and that retained by the exchange. My numbers are arbitrary for polemical or illustrative purposes. I don't what measures of churn bf have or how they gauge what share of someone's losses is going to winners, rather than the general market.

But (as well as inspiring the pc) you can see why the post-founder generation of bf management thought that they had to do something to make exchange betting more like having a sportsbook.

Reggie, if you work in the industry and know that books do very little exchange hedging, what happens to my 200 ew on a 25-1 in an 18 runner sprint hcap (put on by me and two placers)?

I am recreational but an addicted horse bettor. This wd be about the maximum bet I wd stand w/out feeling the need to trade. Let's suppose that there is no more than 100 pounds of morning liquidity above 26 at average odds of about 27.4.

Will it get hedged or not? Every shop where I am a regular phones up my own bets but this does not happen w/ my placers--and the turnover in shop staff is so great that I can sometimes get on myself.

Thanks for your considered response Askari.
Yeah I pretty much understand all that already though, as I'm sure you are aware, the extra abslute return generated on a sportsbook vs the exchange has to be weighed against the important factor that BF has to assume a degree of rik to achieve it. On the exchange model the risk exposure is zero.
But even understanding all these types of things, I'm still at a bit of a loss as to why most of you still seem to think think that BF moving into developing a fixed odds sportsbook is actually bad for the exchange.
Why can't they comfortably sit in parallel ?.
There still remains the very important USP of the xchange, which is that your bet size is only limited by available liquidity.

It has to be bad for the exchange because the money never gets there.  BF said people were winning too fast, were taking money out of the system and people were losing too quickly - hence the PC.  Now BF stop the money getting there in the first place via the sports book, plus worse odds and lack of trading/cash-out options mean people lose more quickly.  So now BF themselves are doing exactly what they said they were trying to combat when the PC was brought in.

Betfair's objection wasn't really that people were winning too quickly, it was they weren't getting enough of it. With the sports book they get all the profit so they won't care how quickly people lose.

The Vis
My basic question is whether this money was ever going to get the the exchange in the first place.
Due to the nature of the fixed odds product, namely it is restrictive on the amount you can wager, it is only ever going to attract the many small time, unsophisticated type recreational punters.
That is the sort of punters that BF is currently losing out hand over fist to its " bookie" competitors.
That is they must have profiled these punters as being neither existing nor even potential exchange users.
Thus they have everything to gain and nothing to lose by now offering a product that appeals to these masses of ordinary punters.
Also they have probably profiled them as the sort of " idiots" who are more likely to play the Xgames and casino side products.

Also I would think that it is a lot easier and cheaper for BF to get these potential new customers to open accounts with them and use the fixed odds product straight up, without having to educate them on how to use the exchange product.
Also once they have become BF members, it is then going to be presumably more likely for many of them to crossover onto the exchange as they become smarter and better punters.

FAFH, the sportsbook doesn't really have anything going for it though. At least with Betfair poker, and arcade etc. it's on a par with the competition.

The Betfair sportsbook wouldn't be very good even if there was no exchange. The prices are generally terrible; worse than ALL the major British bookies (and their prices are bad already).

I still expect Betfair will make decent money from the product for a few reasons:
1) Betfair is a big firm, and inevitably some customers that aren't price sensitive and don't understand the exchange will bet there rather than with the competition.
2) Some existing Betfair customers (losing ones) might want to have a large bet in an obscure market that the exchange liquidity can't accommodate, and they can go to fixed odds instead of to a competitor. Many of them won't though, because they'll see how terrible the prices are and go elsewhere anyway. My guess is they'd get about half of these customers (who can't be bothered to have money deposited in multiple places if they don't need to, or to compare prices).

The damage it does will be largely invisible though. Betfair want to capture a larger share of customer gambling spend, but they risk capturing mainly their exchange spend and not taking much from the competition.

One of the really puzzling things is that fixed odds actually offers far FEWER market than the exchange. It kind of defeats the point. I thought they wanted to compete on markets like

'first assist'
'race to 3 goals'
and the hundreds of other obscure markets that the exchange doesn't cover for football matches.

Agreed.
Whilst the general expansion strategy may arguably be OK, the implementation, thus far at least, has been unarguably terrible.

I thought the whole idea was to allow betting on very quiet markets, but they seem to have abandoned that.

Askari 1 what happens to my 200 ew on a 25-1 in an 18 runner sprint hcap (put on by me and two placers)?

This wd be about the maximum bet I wd stand w/out feeling the need to trade. Let's suppose that there is no more than 100 pounds of morning liquidity above 26 at average odds of about 27.4.

Will it get hedged or not? Every shop where I am a regular phones up my own bets but this does not happen w/ my placers--and the turnover in shop staff is so great that I can sometimes get on myself.

no it won't get hedged, they will either stand the bet and hold the price, stand the bet and move the price, deny the bet and move the price, give you some of the bet and move the price for the rest. They concentrate on getting the price right and denying (or not) customers depending on what they know about their betting history. Messing about hedging the bet (even if there is another book or an exchange where they can do this) just isn't a productive use of their time.

"they will either stand the bet and hold the price, stand the bet and move the price, deny the bet and move the price, give you some of the bet and move the price for the rest"

Reggie, you missed out the classic:  deny the bet and hold the price

@TheVis

Reggie
You actually sound as if you might have been behind enemy lines.
Are you in fact a knowledgable ex-insider ?

FATH, I wd guess that my reply was lengthy rather than considered. I'm impressed by the speed with which my fingers move over the keys but the brain is not always engaged.

A conventional sportsbook will do their damndest not to take on any non-hedgable risk through strict liabilities management and by 'playing the man'. I can see the bf sportsbook only offering amounts to recreational players that can easily be passed off into the exchange--like the Chronicle model run badly by their exchange rival.

Or they cd take risks on markets their team were actively trading--for instance, the big match of the night or events where they had offered a promotion--and allow the liabilities algo to pick up any other risk-incurring bet activity on unmonitored markets.

I share in the feeling that a sportsbook is bad for exchange winners because I pretty much buy into the view that a winner is a pricer who comes up against people who can't price.

The loser, the poor pricer, will be marginally more likely to accept the poor odds on offer on the sportsbook, and so less likely to match the odds being offered by winners on the exchange. The composition of the exchange will change, to the detriment of those who win through finer pricing.

TheInvestor, a lot of their motivation has to be to compete on promotion i.e. cashback on losing first goalscorer bets if Gerrard scores the last goal.

The CS, FG & LG prices on these promotions from Pads & Laddy are thoroughly rank, beyond the point where they are designed to be resistant to getting arbed off on the derivative and main market. Yet people still bet on them.

All the twitter promotions are of this type, and the market is usually so esoteric (but so easily imaginable) that bf are going to find it hard to respond.

IR exchange liquidity on the football submarkets (scorer, next to score etc.) is also so bad that firms like 3.65 can offer standout prices that suit their book as twitter specials.

For football, I think they need to put up accessible 'anytime scorer' markets soon. I don't know where they are (if there at all) on the sidebar.

*promotions

Thank you Reggie. The most I can get on personally in a shop is 25ew on a horse of that kind. This will sometimes be phoned up, depending on who takes the bet. I will be restricted but only denied when the arb is too blatant.

My strategy is dependent on placers putting bets on, especially as the second leg of multiples.