Can Betfair compete or is it game over?

Frog, the only way to use betfair is to utilize it's functions and exchanges to some sort of level.

ie. if you back a horse, you need to trade to reduce your risk that exceeds the 5% you would be paying.

You also can use betfair to "set your price" to either be met or canceled, thus it takes a person using 'judgement' to value to, again, make money.  You can also leave a 'keep price' for horse racing which can be knicked up in-running.

And you also have the ability to close a bet or leave a lay up to give you a free bet. 

Just placing a bet?  All they offer right now is that you have the convenience of one account. 

But 'odds comparison' is only one view of betfair which has many.

A very important one. remember 20% better odds???? That is why I came on here in the first place. Its the nature of the place that turned me into a computer geek trading prices just to try and get a decent amount on at an ok price.

To get more punters it has to have better prices. Without that there is nothing left. Heavily reduce commission for early markets and Betfair will top the odds on offer pretty much across the board. They have nothing to lose because they are trading peanuts early anyway.

The choice is simple - earn peanuts and get a bad press at 5% or cut the rates get good free advertsing and earn more in the long run.

They should have (much) lower commission for some markets, where other bookies operate on small margins. For example match odds in the premier league. Would be very surprised to see any such change in the near future though.

scrap the premium charge and attract the big hitters and market makers back

Must be a wonderful time to be a layer on here then. Go on and lay those horses for under the bookies' odds!

how? Imagine two 5% players on 2.0-2.02 money spread on Betfair.
The layer lays 2.02... wins £95 if it loses. loses £102 if it wins. The backer wins £95 if it wins and loses £100 if it loses. Its a horrid bet for both backer and layer compared to 1.97 each of two elsewhere.

Not to defend but imagine being able to place a bet then trade to reduce or risk partially or completely.

You can do that on an exchange, not on fixed odds.

frog, I remember them trying halving commission to anyone who market-made or took early prices on the horses. They had a promotion they advertised with pictures of toast.

It didn't work because the people who benefited were traders, who also profit by not putting up genuine liquidity.

A trader could just get some morning activity on the board, then do the bulk of his betting as usual closer the off. Without having put up much, he would get reduced comm. on the final result of his trades for the whole market.

I agree w/ you that the conventional books are running rings round bf on both marketing and pricing (the prices are fictitious once you know how to take them and look like you can win).

But I don't see how they are ever going to be best price w/ their commission structure on football or two or three outcome markets. Their only hope wd be to slash commission for those w/ lifetime losses or to hike it dramatically for anyone greening up over the course of a match.

On the horses they need to do something to stimulate morning liquidity, but this has been a longstanding problem. From the viewpoint of their bottom line, my sense is that they wd rather people didn't bet in the mornings, as the prices are more out-of-line and the winners win more and losers lose more. The winners win from the exchange in the sense that the losers leave more quickly, compelling the company to dig deeper into its pockets to spend on advertising.

At one time I thought the solution was their own FO site sitting at unders available to everyone and seeded markets where the prices reflected underlying activity at their and other FO bookmakers.

Now I feel that they don't have the bookmaking experience and courage to make this work, and some sort of targeted commission cut for morning market-makers is the only way they can attract custom before live shows.

I'm also with frog in thinking the best free advertising they can get is letting arbers and small winners get on at best prices.

How many pc payers do they have? Is it even 500? How many price-taking winners (through skill) can there be as a proportion of their customer base? It's tiny; and a liquid market wd prevent it from growing any larger in that all their bettors wd be playing against each other.

For heaven's sake, the best possible use of their marketing budget wd be to pull all these asinine cashback offers for 10GBP bets and to give skill-based experts as good a chance to win as w/ the FO books (if you can get on).

Why for instance only price up the horses at 10am? The justification for the sportsbook was originally ostensibly to allow people to bet when there was nothing on the exchange. Now fixed odds cannot be available until there is a market elsewhere.

Askari and Frog:- Have you never heard the phrase "request a price".That is what Betfair is about.Requesting what you want.It is perfectly possible to beat bookmakers' prices most of the time.Only a buffoon assumes that the price showing when they happen to look is the best price they can achieve.Show a bit of ingenuity and stop moaning.Betfair is still the greatest thing since sliced bread.

We have a best price now.. Reading to beat Everton at 9.36 on oddschecker. Except it is only 9.2 now on Betfair before commission. Available at 9 without commission elsewhere.

I agree artie that you can put a price up on BF and wait to get matched. Unfortunately this does not show up on the price comparison charts.

how? Imagine two 5% players on 2.0-2.02 money spread on Betfair.

I don't get your point. Most people would claim a 2.0/2.02 spread on Betfair would be the sign of a highly liquid market, and great for a Betfair customer. If the betting was 1.8/2.2 then surely that is worse? Are you really arguing that we'd all be better off if the markets were less liquid and the overrounds were higher? Is your point just "Other people on here are offering better odds than me, it's unfair!" ?

Naturally if the 'correct' odds/price/implied chance was 2.0 then you shouldn't be a backer or a layer, as your net profit after commission will mean you make a loss. But that's also true with your 1.97/1.97 example.

Has anyone ever told you lot that you're really boring?

If you find it boring, why are you even bothering to read the thread and post a message? Are you a masochist?

It used to be interesting to read the forum especially the general betting forum. It's died a death since they stopped new sign ups.

Why did they stop new sign ups

Betfair Customer Services 10 Aug 12 21:19

Due to the recent disruption in the Community Forums, we have suspended all new registrations to the Community with immediate effect until further notice. We apologise for any inconvenience this causes.

Can't believe they haven't re-opened it! Maybe they are hoping the forums will just die off.

What do they mean by "disruption" ?

Cheers Mr Magoo. Looks like it's all down to you then YOMOMMA to spark some scintillating discussion.

I'm dumb U.A, I just make fivers and tenners all day arbing. People move on and do other things so there's no point having a forum that doesn't allow new members.

Disruption was 2 or 3 people with multiple names abusing the forum creating loads of threads spamming the place. They should have sorted it out by now really. Anyhow, I'm getting back to work bye guys.

artie, the problem w/ requesting a price is that it gets matched disproportionately often when the horse is 'not off' or at least not at its best.

Further, the commission structure rewards trading, even tick-trading, over getting on at a price.

Bf markets basically have liquidity when there has been activity w/ other bookies. Some of the money on here comes either from arbers and the rest from people whose cards have been marked by these other bets.

Bf need to do something on quieter days when this isn't true--but it will be difficult for them, as the task requires old-fashioned bookmaking and to some degree knowing what the price shd be.

If the comm. structure "rewards tick trading".then is that not the way forward for you ? Are you so set in your ways that you cannot contemplate other money making approaches,apart from backing at an early price ?

If I don't encounter all these problems presumably other people don't.

betfair net profit 2012 is a little over 30m. that is basically where it was back in 2008 when the premium charge was born........(there also are a lot of pictures and Adj. Core Non Exceptional EBIDTA bs numbers in annual result presentations these days, but the only thing that matters long term is the bottom line net result)


it's of course unclear whether the premium charge is the (main) reason for betfair not growing anymore, but nobody can argue the fact that betfair stopped growing the moment the premium charge was introduced

So would profits have dived without the charge or is it largely neutral in terms of revenue? I think they just ran some filters and said they would make a lot more money without realizing people would change their behaviour following the charge.

I don't get your point. Most people would claim a 2.0/2.02 spread on Betfair would be the sign of a highly liquid market, and great for a Betfair customer.

Not great when you put in commission at 5% it is a 1.95/2.07 spread.

pointless question. nobody can calculate the effect of gradually moving from a "Winners are welcome" natural-monopoly betting exchange to one of the hundreds of conventional bookmakers. and the Premium Charge may have been the tipping point


my general point of view is: if you have a monopoly you should fight to keep it. anything else just doesn't seem to make any sense economically

A radical idea would be around 0-1% commission.

Betfair would kill the bookies on price. I think about 30% of lads online customers use Betfair. If Betfair ran on 0% commission, they'd probably stop using lads. Probably roughly the same with the other British bookies. It would create a situation where every internet user would gravitate to Betfair.

It would mean the bookies would simply not be able to compete on price anymore, only with free bets and other marketing tricks that make things look better than they are.

Betfair could then base their revenue model on a combination of profit share (premium charge) and cross selling high margin stuff like sportsbook/casino/poker etc.

Liquidity would be phenomenal.

A radical idea, though not necessarily a good one

So what do you want the spread to be? Overbroke, 2.05 to back and 1.95 to lay?

I admit that for very low margin markets like football win markets, commission is going to make the prices on here worse than bookies like pinnacle. But for just about everything else, claims of great bookie prices are a fantasy. Serious punters won't get on, even if according to Oddschecker you can back the field of the 2:00 at Newmarket at 100%. The very fact that spreads are tight on here shows that people are betting because they are getting good odds. The exchange seems to be less and less for casual customers now (even Betfair hide it from new users!) so people betting on here have made a choice. Moaning about the spreads is essentially complaining that other people are willing to offer/take more competitive odds than you want.

artie, you've got it wrong, I don't back at an early price (or very rarely on here).

My m. o. when I can devote the day to it is to try to lay a partial book of between 35-65% of the market, looking to take on any position where I see the price as being 8-10% or more away from fair value on my tissue. I try to green up rather than otherwise.

I wd not be competitive tick-trading b/c (like virtually all the winners' counter-parties') I do not have the know-how to match their technological advantages. I am not refreshing or requesting data multiple times per second, I cannot on average offer prices on a 60%+ chance of their being worse in ten secs., I cannot skim the OR (actually that option now is probably gone for everyone), I am not using triggers and though I could probably come up w/ an algorithm for determining what I should do when a price is taken, or when I should take a price, I wd not know how to automate it.

If bf took some of the botters' advantages away, then they wd perhaps retain the custom of recreational players for longer.

fixed, it's time that bookmakers understood that the right way to view small, skill-based winners is as a marketing cost.

There were so many times between 2001 and roughly 2006 or so that I recommended bf to people. I wd say, 'it's an exchange, so you're betting against other people and usually get a better price'. 'You can buy and sell the chance of the outcome'. 'No, it's very straightforward'. I cdn't say any of that now, nor wd I ever recommend any bookmaker.

The idea of bf trying to attract more casual or stupid money to the site is almost a non-starter. First, entirely casual money is not going to head to an exchange. Next, there can't be that much fresh money entirely unaware of bf, the Asian books and the choices out there for the punter. And last the tendency is towards greater price-consciousness and -sensitivity in everything, since w/ smartphones it takes 5 secs. to find any best betting price.

Bf have a set-up which allows them to be best-price on multi-runner outcomes. It wd make sense for them to simplify costs and charges and push their central proposition.

W/ the 2.00/2.02 example, frog is illustrating the problem for bf too.

The only people playing will be the 3% or less commission bettors, many of which will be price-taking i.e. non market-making winners, and traders.

The traders give up a far smaller percentage of their profits in comm. to the company (most avoid pc) and the winners win. The only two groups of people playing who are valuable to bf are market-makers on a high ratio of comm. to profits and the whales.

But their strategy for attracting the price-sensitive recreational pound is wrong. One answer is to tear up the whole system of comm. as supposed rivals like matchbook have done and have radically different pricing structures for traders and non-traders.

Despite having messed round a lot w/ and made big changes to the central bf concept, the mgmt. can't bring themselves to do it.

So what do you want the spread to be? Overbroke, 2.05 to back and 1.95 to lay?

Of course not. A book that is 2.0 to back and 2.02 to lay is, if you pay 5% commission, 1.95 to back and 2.07 to lay. If you reduce the commission to 1% it becomes 1.99 to back and 2.03 to lay. The spread obviously could never be overbroke unless they offered negative commission rates.