General Betting
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Calling 'Traders' only
Calling 'Traders' only
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why would anyone want to go to the sportsbook?
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awful value???
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Mr.Angry 05 May 13 12:45 Joined: 05 Jan 11 | Topic/replies: 3,951 | Blogger: Mr.Angry's blog
Here's a question for you. If Betfair can earn more profit from Sportsbook business as they can the Exchange (considering the huge expense of the Exchange too), why not close the Exchange and become solely a sportsbook? I've been wondering that myself. I guess Betfair have to keep the exchange in any case though. If they closed it, all that would happen is that purple or smarkets or someone else would take over. Better for Betfair to eat away at their own margins than someone else. In any case, I see it as virtually inevitable (legislation willing) that a betting exchange like entity will eventually become the biggest and most profitable betting company on the planet. I wonder what would happen if over time, people were willing to market make all the side markets you see with the traditional bookies on the exchange. It would basically make the sportsbook obsolete (except for people who don't 'understand' exchange betting etc.). |
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The USP for Betfair was the punter v punter betting, giving better value than the thieving bookmakers. That WAS Betfair.
Now they've introduced PC and SuperPC makes it much difficult to claim "better value". Now the USP is the previous reputation, goodwill and advertising. But not sure how much longer that will last. It's a pitty really. Have Betfair really given up on the Exchange? I sincerely hope not, because I still profit from that. But if I were not profiting I wouldn't care less. So long as I can get good value, ability to back and lay, to trade in-play, I don't really care against who. |
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If they do lose the exchange would be the mistake of the century business wise.
The dominant betting exchange should (and would) have been a huge business to own. If they'd done things differently of course.... Get rid of PC, invite everyone back again, get this place thriving again! |
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But the Exchange model is flawed. Without a PC there is too much drain. With a PC there is falling liquidity.
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still haven't seen any proof that it is flawed with PC. Have you?
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*without
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I think the drain without PC is something Betfair would have been better off allowing. As the market matures the problem solves itself (admittedly hooverers and inside info guys are an exception to this).
What would stop it being an issue is 2 things: 1) Competition between winners decrease margins over time, which lowers the number of consistent winners in PC territory. 2) Many winners (especially ones with automated strategies) will continuously add increasingly marginal strategies, meaning they churn more. Many big winners don't pay PC due to that reason in the first place. |
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should re-open forum incidentally too - the community BF had was part of the success (even the nutters...)
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stu 22 Apr 13 11:16
One thing that strikes me though - BF used to actively look to recruit players who were solely traders - didn't they run workshops etc? Do they still run those? Notice no-one answered this, anyone know? |
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Don't think they are interested in teaching people about the exchange concept. Look at the 'cash out' advertisement they are running at the moment.
And how does the cash out function work in markets with no money in? This is probably why they are reducing the number of markets. Also using the cashout function means you have to use the Beta exchange and what a disaster that is. |
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A company like bf needs a core of people at the top w/ a shared understanding of what the business is.
It doesn't have that at the moment because it got too big, and then anyone heading a team 'bigged up' what they were doing (because it was the source of their wealth and status) at the expense of any original concept. Traders w/ freeze-outs denied the technical advantages built into the site wd be fine, provided enough of them provided always-on liquidity. |
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maas: If all the vast majority of customers from the exchange migrate to the sportsbook over time then they will
----------- I just can't see this happening. people already on the exchange will either stop altogether (if they rely on the flexibility of an exchange) or migrate to wherever the prices are best. so the only thing that would stop that would be industry leading prices on the sportsbook, and if that was part of the strategy they'd surely be way better than they are already. new customers will go there, but only because they're being taken there by default and having the better alternative semi-hidden from them. which creates a headache down the line, because as you start to lose their custom to better priced sportsbooks, do you take steps to tell them about the exchange or not? either way, in this confused business model you lose out. you lose a chunk of their spend to competitors, or you lose a chunk of their profitability to your own better offer that in an ideal world they'd never use. creating your own conflict of interest is rarely a good business strategy. |
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this confused business model
This. Perhaps they should use this in the way they used to use the 'sharp minds' slogan...  |
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viva, in the conference call w/ investors & analysts today bf mgmt. talked about customarily offloading sportsbook bets into the exchange to 'maintain a covenant w/ layers'.
Bf wd get a bigger cut than they do at the moment but not at the cost of putting winning players out of business. I don't see as the mgmt. seem to do how the exchange and sportsbook are complementary in marketing terms and I suspect that there's an element of 'warm words' in bf's presentation and that they will always see winners / pc payers etc. as their rivals. However, they do seem to be serious in a strategy of a complementary exchange and sportsbook. |
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askari, did anyone ask them why their sportsbook offer is so poor? if they can unload the risk onto the exchange more effectively and cheaply than other firms, why are their prices and limits where they are?
I also can see how the two things could be complementary. eg in a jurisdiction like spain (currently) they could effectively offer exchange back prices minus a tick or two as sportsbook bets, with automated hedging to the exchange. but what they're doing at the moment doesn't really look integrated; it looks confused. even mugs aren't stupid. if you run advertising campaigns telling people you have best prices, then take them to a sportsbook where you don't, you're effectively relying on them not realising. that's basically not going to work. some of them will use comparison sites and see there are better prices elsewhere. others will just know it because the prices will look skinny compared to what they're used to/expecting. others will get tempted away by other books' advertising/offers and stay where the prices are better. the bottom line is, if you're going to compete with yourself by starting up a sportsbook, it had better be a good one or all you're going to succeed in doing is haemorrhaging business and goodwill. |
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They replied re the sportsbook that they had no intention of being best industry price--only to offer prices that weren't rank or were as good as a bettor might expect.
The presentation was at 10am but I didn't watch it live. |
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really?
 why poison your own brand like that? |
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I wd guess the truly miserable limits are for shrewdies, to prevent themselves i.e. the sportsbook's 'crack trading team' being caught with their pants down on a steamer. This happens all the time w/ the conventional industry.
One v. interesting stat was that customer acquisition or new accounts was up 107%--that is, it's more than doubled--since they started the sportsbook. Either bf staff grannies have been pressed into service or there were a lot of being who wanted to bet with bf who were discouraged by the complexity of the exchange. I agree w/ you in that I can't see the sportsbook and exchange as complementary offerings in the way they were trying to describe in the presentation. |
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This shd be the stream:
http://www.livestream.com/betfair_internal As to good prices / fair prices / best prices, how price-sensitive can recreational football punters be? The implied cost of setting up fifty or so accounts, and the time or carrying costs of funding them, are surely going to be greater for the average casual punter than the benefit of better prices. If you want a one-stop shop you cd try Pinny, but they're not British, they don't advertise, and I'm not sure that bf sportsbook is targeting the kind of person who scours betbrain for 0.5% advantages. I wd be fairly happy if I were senior in bf after the presentation, in that they managed to under-promise and seemed to be pitching to be people who were not investors and understood less about the company's travails e.g. than we do. They have zero, nil, nada big London institutional support at the moment and just one interested bank will surely buoy their share price. |
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Does the 107% figure include customers transferred from Blue SQ?
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when was the bluesq acquisition? is that included in the +107% figure or was it after the relevant period?
their advertising's improved massively since the dark days of the betfair front room, so I suppose that could be relevant. but it does lead to one fairly obvious question. if customer acquisition and retention are up so markedly, why is revenue static? is that purely down to regulatory problems? |
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tommycockles, ah that must have been it, the people I was calling the employees' grannies were Blue Sq customers. Maybe they've even done some double counting.
'Cost of customer acquisition' is a pretty useless metric imv, since you don't know how profitable over a lifetime a new customer is going to be, or how often the customer of a bolt-on acquisition like Blue Sq is going to bet w/ you. |
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the bot that drips 1.99 invisible bets into markets is really frustrating. you're trying to make a book, and the longer priced selections keep getting matched 1p at a time.
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tommycockles
Does the 107% figure include customers transferred from Blue SQ? ......... Do we think the figure is even a +ve? Taking out the Blue Square acquisition it could easily be negative. How on Earth could anybody know? Talk about misleading figures but if true that one takes the biscuit. |