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possibly worth a read for anyone interested
Betfair bid looked an odds-on cert, so how did it fail?
Telegraph.co.uk - 10 hours ago
The author, investor and 6.4pc Betfair shareholder puts his personal ... So ask him why his bid for Betfair fell over and he looks genuinely ...
http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/leisure/10094720/Betfair-bid-looked-an-odds-on-cert-so-how-did-it-fail.html
wonder what other key shareholders like mr wray or mr black feel about the share price nosediving subsequently, or the fact that liquidity in many markets except the odd key tennis or cricket markets like IPL is plummeting, that many of its key accounts are struggling, exchange trading shops closing ....do we not deserve an update from betfair's senior management why this was not in betfair's customers best interest as i believe mr koch was keen to return betfair to becoming a betting exchange again and scrapping the PC
Betfair bid looked an odds-on cert, so how did it fail?
Telegraph.co.uk - 10 hours ago
The author, investor and 6.4pc Betfair shareholder puts his personal ... So ask him why his bid for Betfair fell over and he looks genuinely ...
http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/leisure/10094720/Betfair-bid-looked-an-odds-on-cert-so-how-did-it-fail.html
wonder what other key shareholders like mr wray or mr black feel about the share price nosediving subsequently, or the fact that liquidity in many markets except the odd key tennis or cricket markets like IPL is plummeting, that many of its key accounts are struggling, exchange trading shops closing ....do we not deserve an update from betfair's senior management why this was not in betfair's customers best interest as i believe mr koch was keen to return betfair to becoming a betting exchange again and scrapping the PC
Show More
looks a good decision as the share price has now dropped from that 9.50 offer to 8.08
betfair appears to lack a strategy as it tries to move from successful betting exchange into the murky waters of being a sports bookmaker...i'd love to see what is matched on the sportsbook versus the exchange for many of its key sports markets
i doubt those shareholders will want to see the share price drop anymore and no matter how good your CEO is rumoured to be i'm pretty sure if he doesn't start delivering positive results soon he'll be getting the noose tied round his neck
SACK THAT PC CHARGE BEFORE ITS TOO LATE and MOVE BACK TO YOUR CORE VALUES BETFAIR
betfair appears to lack a strategy as it tries to move from successful betting exchange into the murky waters of being a sports bookmaker...i'd love to see what is matched on the sportsbook versus the exchange for many of its key sports markets
i doubt those shareholders will want to see the share price drop anymore and no matter how good your CEO is rumoured to be i'm pretty sure if he doesn't start delivering positive results soon he'll be getting the noose tied round his neck
SACK THAT PC CHARGE BEFORE ITS TOO LATE and MOVE BACK TO YOUR CORE VALUES BETFAIR
funny how in many other organisations and industries such as supermarkets the more you spend the more bonuses, rewards, money off deals you get but in betfair....being a key account gives you an even worse deal
you just get more taken off you the more commission you generate and the more money you earn for yourself is betfairs too
i got an idea to put to your shareholders...instead of taking it all off your key customers (the 20% who generate 80% of your commission why not take it off your staff).....ermmmm
instead of paying your CEO £300k pay him £180k
see if your key staff like it too
1.01 they would leave,
imagine staff having to take a huge pay cut what it would do to staff morale....now go figure what the PC has done to your key customers morale
MR CORCORAN please do the sensible thing and look at your business model and strategy .....the PC is fundamentally flawed and needs scrapping before your key customers leave in force....imagine one day waking up to find the 80% you got left generate diddly squit liquidity to the exchange...if you were a book kmaker you'd start providing it but you ain't you're a commission agent
you just get more taken off you the more commission you generate and the more money you earn for yourself is betfairs too
i got an idea to put to your shareholders...instead of taking it all off your key customers (the 20% who generate 80% of your commission why not take it off your staff).....ermmmm
instead of paying your CEO £300k pay him £180k
see if your key staff like it too
1.01 they would leave,
imagine staff having to take a huge pay cut what it would do to staff morale....now go figure what the PC has done to your key customers morale
MR CORCORAN please do the sensible thing and look at your business model and strategy .....the PC is fundamentally flawed and needs scrapping before your key customers leave in force....imagine one day waking up to find the 80% you got left generate diddly squit liquidity to the exchange...if you were a book kmaker you'd start providing it but you ain't you're a commission agent
“I am now a loyal shareholder. I have been put back in my box and I’m quite happy in my box.” He’s since had “a long friendly telephone call with Breon. I like the guy. He’s very humorous.” Both believe in new products making the best of the exchange and the sportsbook.
Its all quite confusing. It looks like they had different strategies but now he is loyal to the current plan?
Its all quite confusing. It looks like they had different strategies but now he is loyal to the current plan?
"So he advocated cutting customer numbers to focus on the big fish, not the minnows. That would have allowed a drastic cut to the annual marketing budget – from £90m-£100m to just £20m – as Betfair stopped trying to lure tiddlers interested only in £10 free bets. “You have to focus on the core customers and provide new products for them,” he says."
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possibly we've had a narrow escape. don't think koch's pareto stuff works with betfair; the 20% he's interested in are linked to the other 80% in ways that make the principle non-applicable.
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possibly we've had a narrow escape. don't think koch's pareto stuff works with betfair; the 20% he's interested in are linked to the other 80% in ways that make the principle non-applicable.
so you've a got (or at least you had) a company that makes a risk-free profit every time two of your customers want to use your platform to bet a against each other; day in, day out year in, year out.
All you have to do (and i don't underestimate the complexity or expense of the task) is to keep the platform, both hardware and software up and running, see off competitors, should they emerge, and bank the profits.
Why on earth do you need new products?
Mr Koch says CEOs should be making the minimum possible decisions. In terms of the product (as opposed to the infrastructure) , I can't really see what need there has been for any decisions over the last 10 years.
All you have to do (and i don't underestimate the complexity or expense of the task) is to keep the platform, both hardware and software up and running, see off competitors, should they emerge, and bank the profits.
Why on earth do you need new products?
Mr Koch says CEOs should be making the minimum possible decisions. In terms of the product (as opposed to the infrastructure) , I can't really see what need there has been for any decisions over the last 10 years.
There isn't a major manager, owner or potential owner of bf who is just happy serving as an exchange or platform provider, like the LSE was when it was publicly listed.
They all want to be the broker or the bookmaker themselves.
Richard Koch is the same as Ed Wray or a senior manager like Breon Corcoran in this regard.
The bid failed to go through because the managers, especially Mr Corcoran, were signed up to incentive plans and wage packages that might not have delivered w/ a change of strategy. Ed Wray and other singificant interests wanted Mr Corcoran, and Corcoran understandably wanted to master of his own destiny w/ respect to his pay.
They all want to be the broker or the bookmaker themselves.
Richard Koch is the same as Ed Wray or a senior manager like Breon Corcoran in this regard.
The bid failed to go through because the managers, especially Mr Corcoran, were signed up to incentive plans and wage packages that might not have delivered w/ a change of strategy. Ed Wray and other singificant interests wanted Mr Corcoran, and Corcoran understandably wanted to master of his own destiny w/ respect to his pay.
They just dont seem to get how big the exchange could have been (could be) if they totally focused on it.
They have wasted so much time and effort on things like the poker fad, LMAX,and rubbish games that need replacing every few months. Now they are trying to be low grade bookie as well.
All this time they have not given a moments thought to how with a bit of price alteration,educational content and a low margin high volume bookie (with bets fed directly into the exchange) they could make this be the only place to bet.
They have completely lost their identity and the plot of what Betfair is all about.
If they really are intent on winding down and destroying the exchange it will be interesting to see if anyone else is willing to give the business model a go. I am sure it could be done for alot less than £950m.
The current competitors don't seem that interested.
They have wasted so much time and effort on things like the poker fad, LMAX,and rubbish games that need replacing every few months. Now they are trying to be low grade bookie as well.
All this time they have not given a moments thought to how with a bit of price alteration,educational content and a low margin high volume bookie (with bets fed directly into the exchange) they could make this be the only place to bet.
They have completely lost their identity and the plot of what Betfair is all about.
If they really are intent on winding down and destroying the exchange it will be interesting to see if anyone else is willing to give the business model a go. I am sure it could be done for alot less than £950m.
The current competitors don't seem that interested.
Frog2: "All this time they have not given a moments thought to how with a bit of price alteration,educational content and a low margin high volume bookie (with bets fed directly into the exchange) they could make this be the only place to bet."
I actually believe they are looking at this. They are looking at price alteration. They've started by increasing/decreasing commission in various countries and Breon has said the pricing structure is not efficient and they are looking into some sort of differentiation.
My understanding is the sportsbook will be feeding directly into the exchange - I believe there is software about to be implemented which will do this - although the sportsbook doesn't seem to be low margin, high volume. This might change when the sportsbook and exchange are linked.
Education is something they're lacking in. The number of intelligent people I speak to who have a quick look at the exchange, don't understand it and give up straight away continues to shock me.
I actually believe they are looking at this. They are looking at price alteration. They've started by increasing/decreasing commission in various countries and Breon has said the pricing structure is not efficient and they are looking into some sort of differentiation.
My understanding is the sportsbook will be feeding directly into the exchange - I believe there is software about to be implemented which will do this - although the sportsbook doesn't seem to be low margin, high volume. This might change when the sportsbook and exchange are linked.
Education is something they're lacking in. The number of intelligent people I speak to who have a quick look at the exchange, don't understand it and give up straight away continues to shock me.
Education is something they're lacking in.
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Well, yes. Because the exchange has gone from being the point of the whole exercise to something they'd rather people didn't find out about.
Also, they've thrown away all the free advertising they used to get from a once growing band of evangelists telling people they were stupid to bet anywhere else.
That's what got me started, initially as a 2 pound recreational punter, who's now paying 5 figures in a commission a year.
When they do their sums, do they work out how much of the marketing budget is actually just replacing what they used to get for nothing through customer goodwill - and a forum that's gone from being a vibrant part of the USP to a gated community they see as an embarrassment?
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Well, yes. Because the exchange has gone from being the point of the whole exercise to something they'd rather people didn't find out about.
Also, they've thrown away all the free advertising they used to get from a once growing band of evangelists telling people they were stupid to bet anywhere else.
That's what got me started, initially as a 2 pound recreational punter, who's now paying 5 figures in a commission a year.
When they do their sums, do they work out how much of the marketing budget is actually just replacing what they used to get for nothing through customer goodwill - and a forum that's gone from being a vibrant part of the USP to a gated community they see as an embarrassment?
Education is something they're lacking in. The number of intelligent people I speak to who have a quick look at the exchange, don't understand it and give up straight away continues to shock me.
Or perhaps they are right to have a 'front door' and 'back door'?
The problem is that the front door sportsbook is offering mince prices to people who are already price-sensitive and can understand the difference between the exchange and what they're being given.
If the sportsbook 1) had clearly comprehensible, reasonable limits and 2) was only a handful of ticks away from the exchange price (done in an automated manner rather than subjectively by bf's team of 'crack traders') and 3) decanted into the exchange, they might have a model that allowed them to stay on a revenue and earnings growth trajectory (the management's objective) and kept their skilled winning players happy.
Or perhaps they are right to have a 'front door' and 'back door'?
The problem is that the front door sportsbook is offering mince prices to people who are already price-sensitive and can understand the difference between the exchange and what they're being given.
If the sportsbook 1) had clearly comprehensible, reasonable limits and 2) was only a handful of ticks away from the exchange price (done in an automated manner rather than subjectively by bf's team of 'crack traders') and 3) decanted into the exchange, they might have a model that allowed them to stay on a revenue and earnings growth trajectory (the management's objective) and kept their skilled winning players happy.
i reckon i must have gifted betfair at least 30 new customers when i used to preach about how good it was..i wouldnt even try do this nowadays
lol you just try explaining the premium charge to an eager newbie 
it's not so much the PC scom. I figure anyone who got to the point where they were paying it would be up on the deal and capable of looking after themselves.
it's just... everything else.
loss of trust through how the PC was brought in;
not wanting to have friends unwittingly end up at the miserable sportsbook;
BF's continued blind eye to trap betting filth;
loss of faith that the exchange will even still be there in a year or two;
transformation of the forum from a genuine source of entertainment and information to a dismal closed shop they couldn't even go on if they wanted to;
loss of enthusiasm/goodwill generally due to the above, plus site outages and a failure of meaningful innovation.
it's just... everything else.
loss of trust through how the PC was brought in;
not wanting to have friends unwittingly end up at the miserable sportsbook;
BF's continued blind eye to trap betting filth;
loss of faith that the exchange will even still be there in a year or two;
transformation of the forum from a genuine source of entertainment and information to a dismal closed shop they couldn't even go on if they wanted to;
loss of enthusiasm/goodwill generally due to the above, plus site outages and a failure of meaningful innovation.
Templeton you optimistically think that betfair will improve on their pricing structure. All they are interested in is take, take, take.
Small time punters paying 60 % premium charge on a life time sentence has not be addressed. I am not optimistic at all.
Small time punters paying 60 % premium charge on a life time sentence has not be addressed. I am not optimistic at all.
I wd not be so pessimistic, hazel.
Someone is eventually going to run the original bf model.
Bf's legal counsel Martin Cruddace is now leaving the company. Pretty much every significant employee in at the outset of bf who believes in exchange betting--Mr Cruddace, Mark Davies, to a lesser extent Stephen Morana--has left. Sooner or later they will join forces w/ Richard Koch, take the company private (removing the pressure for short-term revenue jumps) and move to restore much of the original ethos. Or else someone will tap their expertise and launch their own pure exchange.
What measures can a company like bf take to prevent their key accnts from accepting a deal to replicate their 'liquidity' The same mistakes over pricing (traders v. bettors) will not be repeated. One way or another bf is going to have some more genuine competition.
Someone is eventually going to run the original bf model.
Bf's legal counsel Martin Cruddace is now leaving the company. Pretty much every significant employee in at the outset of bf who believes in exchange betting--Mr Cruddace, Mark Davies, to a lesser extent Stephen Morana--has left. Sooner or later they will join forces w/ Richard Koch, take the company private (removing the pressure for short-term revenue jumps) and move to restore much of the original ethos. Or else someone will tap their expertise and launch their own pure exchange.
What measures can a company like bf take to prevent their key accnts from accepting a deal to replicate their 'liquidity' The same mistakes over pricing (traders v. bettors) will not be repeated. One way or another bf is going to have some more genuine competition.
i agree with viva el presidente ... I'm pretty sure I didn't join BF because of any adverts, i joined because I saw articles in racing columns saying something like "The favourite who started at 2/1 (3.5) on 'the Exchanges' ", or XXX who started at 7/1 (12.0 on 'the Exchanges')", made me feel like a complete idiot for going into a betting shop or using a bookies' site to back my fancy at bookies' odds in a Horse Race.
i suppose you could call that 'Evangelism' ... to me it was just useful information, and it was information that i was (and still would be) happy to pass on to anyone i know who likes to bet on horse races or anything else, but now I have to preface any recommendation with something along the lines of ... 'When the site opens, ignore the first display, and look for the link that says 'Exchange'. Make sure to bookmark it or else you'll always get their cr@p sportsbook. If you clear your cookies, you'll have to do that ignoring bit again ...
as el presidente says: "I figure anyone who got to the point where they were paying it (PC) would be up on the deal and capable of looking after themselves. ... at least thy'd have a better chance of winning enough to be liable for PC than they would anywhere else, but God, what a struggle, just to find what should be obvious
i suppose you could call that 'Evangelism' ... to me it was just useful information, and it was information that i was (and still would be) happy to pass on to anyone i know who likes to bet on horse races or anything else, but now I have to preface any recommendation with something along the lines of ... 'When the site opens, ignore the first display, and look for the link that says 'Exchange'. Make sure to bookmark it or else you'll always get their cr@p sportsbook. If you clear your cookies, you'll have to do that ignoring bit again ...
as el presidente says: "I figure anyone who got to the point where they were paying it (PC) would be up on the deal and capable of looking after themselves. ... at least thy'd have a better chance of winning enough to be liable for PC than they would anywhere else, but God, what a struggle, just to find what should be obvious
"I figure anyone who got to the point where they were paying it (PC) would be up on the deal and capable of looking after themselves"
True but unfortunately for BF, "looking after" myself means betting (and earning) elsewhere where I get to keep 95%+, not spending all day, 6 days a week, trawling BF markets, mopping up anything of value, seeding side markets and minority stuff like Bowls and Speedway.
All I can say is I'm glad I kept my plumbing tools.
True but unfortunately for BF, "looking after" myself means betting (and earning) elsewhere where I get to keep 95%+, not spending all day, 6 days a week, trawling BF markets, mopping up anything of value, seeding side markets and minority stuff like Bowls and Speedway.
All I can say is I'm glad I kept my plumbing tools.
I should add, that my skillset, honed on here over the years has proved quite transferable to online poker, where there is healthy competition and PC would kill a site instantly, rather than the death of a thousand cuts that we are witnessing here.
btw, speaking of the PC, the regpay portal seems to have changed as of this week. no longer shows lifetime/last week percentage.
glitch or straw in the wind..?
glitch or straw in the wind..?
...scrap that, they're there. not sure what happened there.
I brought dozens on people to Betfair over the years and spent thousands of hours of my own time working
FREE for Betfair promoting their product and meeting up countless times at hotels and racecourses (thanx for the free food Betfair).
I spend many many hours discussing and planning the Betfair arcade and poker (2-3 years before their implemented it)and
talking how people wanted more markets and a video link for USA and Uk horses.Also I let them add software to my computer so
they could monitor how I seeded their markets and how an exchange player went about his/her business.
I was over the moon when they won the queens prize for enterprise.
I always said that I would never take a single penny from Betfair as I do everything for the love of the exchange product.
How you have let us all down Betfair .
Still have hope for the exchange model but I feel if betfair doesnt get rid of the PC charge in the next 2 years a rival exchange will
take the baton.Until then I expect the shareholders to climb the wall of worry as the share prices continues it's downward trajectory.
FREE for Betfair promoting their product and meeting up countless times at hotels and racecourses (thanx for the free food Betfair).
I spend many many hours discussing and planning the Betfair arcade and poker (2-3 years before their implemented it)and
talking how people wanted more markets and a video link for USA and Uk horses.Also I let them add software to my computer so
they could monitor how I seeded their markets and how an exchange player went about his/her business.
I was over the moon when they won the queens prize for enterprise.
I always said that I would never take a single penny from Betfair as I do everything for the love of the exchange product.
How you have let us all down Betfair .
Still have hope for the exchange model but I feel if betfair doesnt get rid of the PC charge in the next 2 years a rival exchange will
take the baton.Until then I expect the shareholders to climb the wall of worry as the share prices continues it's downward trajectory.
I bet you regret letting them monitor how you went about your business.
Whatever happened to the Lads takeover of Daq? Seems like another waste of time as predicted.
i am no expert but....
£100,000,000 marketing budget to produce a tv advert showing a man sweating buckets in a pub over whether to cash out 24 quid? small recreational punters would rather walk into a bookie at lunch and put a tenner on a horse at silly odds cos they like the horses name
£100,000,000 marketing budget to produce a tv advert showing a man sweating buckets in a pub over whether to cash out 24 quid? small recreational punters would rather walk into a bookie at lunch and put a tenner on a horse at silly odds cos they like the horses name
He also appears to be the only person in the room not enjoying himself, too busy fretting over his £20 to win £8.
Cash Out is one of the best things they've done and the advert is good.
YOU COULD GET YOUR CASH OUT BEFORE YOU DONT NEED AN ADVERT TO TELL YOU
ESPECIALLY AN ADVERT THAT COSTS THOUSANDS .ITS LIKE THE THIS IS A NUCLEAR FREE ZONE SIGN THAT THEY HAVE UP IN MANCHESTER
Should have had two guys playing a game of pool in the pub. Player 1 says to Player 2 "who do you fancy for today's match" Player 1 says "I fancy Liverpool, just backed them to win 1-0 at 10s with the bookies in the high street." Player 2 says "yeah I quite fancy that. Let me see what price that is on Betafir. 14s on Betfair mate." Advert ends with the comment "make sure you get the best odds. Check Betfair.com"
Then they open an account and get directed to the Sportsbook where it's 9s
Then they open an account and get directed to the Sportsbook where it's 9s
clydebank.honestly, I could come up with a better advert than the cash out one in an afternoon. seriously. in fact, I reckon I could write, cast, film and edit a better advert than that in a day, on a budget of somewhere between £0 and £100.
I mean, advertising 101. if you're advertising a recreational product, don't make it look like the person using it's having a really stressful time.
101a, if you have made that basic mistake, don't make it worse by surrounding him with people not using the product who look like they're having a better time than him.
There was a Betfair advert on Sky last night - the one with 400 odd (?) better prices on Betfair than on William Hill etcetera. It does seem ridiculous the exchange is being hidden away, whilst the marketing campaign is focusing (misleadingly?) on prices from the exchange.
As for the cashout advert, he is -£20 red on both Everton and the draw, but +£8 on Manchester Utd. How does this translate into a cashout of 20 something quid,...?
If you compared Bet365's advertising (brash, cool, Ray Winstone, advertising a latest available price on a relevant match which the viewer is normally watching) against Betfair's current advertising (cashout bogus amounts, better prices on the exchange but you are sent to the sportsbook when you log on, no relevant prices to current matches which viewers are watching, etcetera) there is no contest which adverts are doing a better job. There must be a good way to advertise Betfair, perhaps some thought is needed as to how to achieve this going forward.
As for the cashout advert, he is -£20 red on both Everton and the draw, but +£8 on Manchester Utd. How does this translate into a cashout of 20 something quid,...?
If you compared Bet365's advertising (brash, cool, Ray Winstone, advertising a latest available price on a relevant match which the viewer is normally watching) against Betfair's current advertising (cashout bogus amounts, better prices on the exchange but you are sent to the sportsbook when you log on, no relevant prices to current matches which viewers are watching, etcetera) there is no contest which adverts are doing a better job. There must be a good way to advertise Betfair, perhaps some thought is needed as to how to achieve this going forward.
two blokes discussing their bets in a pub, as clydebank suggested. series of ads, in each of which the non BF one comes out looking a bit dim for not using BF. better prices, cashing out etc.
maybe one where he's finally hit a winning run - and been shut down.
reinforce the point by having them playing pool (again, as per clydebank). mr BF standing behind mr idiot shaking his head sadly as he watches him line up a terrible shot. white comes back up the table, fouls the black into a pocket. Mr BF's seen it coming, catches the black as it falls into the pocket. "your round".
maybe one where he's finally hit a winning run - and been shut down.
reinforce the point by having them playing pool (again, as per clydebank). mr BF standing behind mr idiot shaking his head sadly as he watches him line up a terrible shot. white comes back up the table, fouls the black into a pocket. Mr BF's seen it coming, catches the black as it falls into the pocket. "your round".
maybe one where he's finally hit a winning run - and been shut down.
... by the Betfair sportsbook.
... by the Betfair sportsbook.
well, yeah. that's the insanity of it.
this guy corcoran's supposedly a marketing genius, but their current strategy means that their marketing strategy can't play to what should be their strengths. and at their moment they're trying to fudge that by sailing as close to the wind as they can with an exchange based advert for a totally different product.
it's just so muddled.
this guy corcoran's supposedly a marketing genius, but their current strategy means that their marketing strategy can't play to what should be their strengths. and at their moment they're trying to fudge that by sailing as close to the wind as they can with an exchange based advert for a totally different product.
it's just so muddled.
Ad advert in which an ordinary guy wants his usual £50 on Man Utd and suddenly finds himself restricted to £2.94 would be explosive in its implications for every single bookmaker out there. All sorts of questions would be asked regarding integrity, fairness and advertising. The benefits to the Betfair betting exchange would be potentially colossal, while all the opposition would be badly wounded.
... Except, of course, Betfair has saddled itself with a sportsbook which behaves in just that way as a matter of course.
... Except, of course, Betfair has saddled itself with a sportsbook which behaves in just that way as a matter of course.
possibly we've had a narrow escape. don't think koch's pareto stuff works with betfair; the 20% he's interested in are linked to the other 80% in ways that make the principle non-applicable.
It certainly doesn't - big fish need something to eat. http://green-all-over.blogspot.com/2013/06/lazy-tiddlers.html
It certainly doesn't - big fish need something to eat. http://green-all-over.blogspot.com/2013/06/lazy-tiddlers.html
possibly we've had a narrow escape. don't think koch's pareto stuff works with betfair; the 20% he's interested in are linked to the other 80% in ways that make the principle non-applicable.
It certainly doesn't - big fish need something to eat. http://green-all-over.blogspot.com/2013/06/lazy-tiddlers.html
Yeah, that was my thought when I read the article.
However, he presumably means the 80/20 split to be applicable just to the set of net losers. Presumably there is a small group of large recreational players who are the 'big fish' referred to by Koch.
It certainly doesn't - big fish need something to eat. http://green-all-over.blogspot.com/2013/06/lazy-tiddlers.html
Yeah, that was my thought when I read the article.
However, he presumably means the 80/20 split to be applicable just to the set of net losers. Presumably there is a small group of large recreational players who are the 'big fish' referred to by Koch.
How about something like this:
Guy#1: Says that he has backed Rooney to score the first goal.
Guy#2: - What odds did you get?
Guy#1: - 4.5
Guy#2: - Hahahaha, I got 6 at Betfair.
Guy#1: - Yeah, right. I checked the odds at Betfair.com, and it was only 4!
Guy#2: - I got 6 at Betfair 10 min ago. That's equivalent of 5.75 after commission even if you don't have any discount!
Guy#3: - He must have seen the odds offered by the Betfair sportsbook.
Guy#2: - Oh, of course. When you go to betfair.com click the little yellow box in the top left corner, that takes you to the exchange.
Guy#1: Goes to betfair.com on his laptop and clicks the little yellow box in the top left corner. - Rooney is 5.7 now. How much is that net of commission?
Guy#2: - 5.465, assuming no discount.
Guy#1: - Grrr, still a lot better than 4.5.
Guy#4: - Did you say that you've backed Rooney @6?? Surely he is a lay at that price? I'm going to lay him.
Guy#1: -Lay?
Guy#4: -It means that I bet against Rooney scoring the first goal. At Betfair the exchange, but not Betfair the sportsbook, you can always lay a selection if you think the odds are too low.
***The match starts, and Rooney scores the first goal. Guys#1 and 2 celebrate wildly!
***A couple of days later the friends meet up again. They go shopping. Guy#1 wants to buy something, but he's £50 short.
Guy#2: -If you had placed that Rooney bet at Betfair.com/exchange you could have bought it *LOL*.
Guy#2: Gets an email from Betfair saying that he from now on will have to a premium charge if his commission generated is too low in relation to his gross profit.
Guy#1: ***Starts to laugh hysterically, but then he also gets an email. It's from his high street bookie. They've closed his account because they think he might be a winner!
Guy#2: ***Starts to laugh hysterically*** - Maybe the premium charge isn't so bad after all. At least they don't close my account even though I have started to win. They just take a smallish part of my profit!
Guy#1: Says that he has backed Rooney to score the first goal.
Guy#2: - What odds did you get?
Guy#1: - 4.5
Guy#2: - Hahahaha, I got 6 at Betfair.
Guy#1: - Yeah, right. I checked the odds at Betfair.com, and it was only 4!
Guy#2: - I got 6 at Betfair 10 min ago. That's equivalent of 5.75 after commission even if you don't have any discount!
Guy#3: - He must have seen the odds offered by the Betfair sportsbook.
Guy#2: - Oh, of course. When you go to betfair.com click the little yellow box in the top left corner, that takes you to the exchange.
Guy#1: Goes to betfair.com on his laptop and clicks the little yellow box in the top left corner. - Rooney is 5.7 now. How much is that net of commission?
Guy#2: - 5.465, assuming no discount.
Guy#1: - Grrr, still a lot better than 4.5.
Guy#4: - Did you say that you've backed Rooney @6?? Surely he is a lay at that price? I'm going to lay him.
Guy#1: -Lay?
Guy#4: -It means that I bet against Rooney scoring the first goal. At Betfair the exchange, but not Betfair the sportsbook, you can always lay a selection if you think the odds are too low.
***The match starts, and Rooney scores the first goal. Guys#1 and 2 celebrate wildly!
***A couple of days later the friends meet up again. They go shopping. Guy#1 wants to buy something, but he's £50 short.
Guy#2: -If you had placed that Rooney bet at Betfair.com/exchange you could have bought it *LOL*.
Guy#2: Gets an email from Betfair saying that he from now on will have to a premium charge if his commission generated is too low in relation to his gross profit.
Guy#1: ***Starts to laugh hysterically, but then he also gets an email. It's from his high street bookie. They've closed his account because they think he might be a winner!
Guy#2: ***Starts to laugh hysterically*** - Maybe the premium charge isn't so bad after all. At least they don't close my account even though I have started to win. They just take a smallish part of my profit!
Has BF lost its way? Yes it has.
How can things be improved? By returning to 10 basic principles on which BF should be run
1. Encourage players to bet as much and as frequently as possible.
2. DO NOT DIS-INCENTIVISE THEM IN THIS REGARD
3. Never close a winning account – it’s what separates BF from bookmakers
4. Ensure sufficient liquidity for markets to function
5. Do not penalise or encourage one group of customers over any other group – all are welcome
6. Keep charging simple so that players can easily calculate profit & loss
7. Settle markets quickly and efficiently
8. Avoid market mal-function at all costs
9. Provide prompt and courteous customer service
10. Remember always – No customers, No business
How can things be improved? By returning to 10 basic principles on which BF should be run
1. Encourage players to bet as much and as frequently as possible.
2. DO NOT DIS-INCENTIVISE THEM IN THIS REGARD
3. Never close a winning account – it’s what separates BF from bookmakers
4. Ensure sufficient liquidity for markets to function
5. Do not penalise or encourage one group of customers over any other group – all are welcome
6. Keep charging simple so that players can easily calculate profit & loss
7. Settle markets quickly and efficiently
8. Avoid market mal-function at all costs
9. Provide prompt and courteous customer service
10. Remember always – No customers, No business
mr anderson , 20 - 60 % of anything is not small
do you pay pc mr anderson ?
do you pay pc mr anderson ?
Betfair should be run with only 1 principal aim :-
...to maximise profits.
End of.
...to maximise profits.
End of.
Johnny The Guesser • June 6, 2013 5:04 PM BST
Betfair should be run with only 1 principal aim :-
...to maximise profits.
End of.
No offence, Johnny but that is the most facile and stupid post I have read on this subject.
Maximising profit in the short term might be long term suicide.
Likewise, maximising long term profits might be missing opportunities in the short term.
Many shareholders would argue that the share price is more important than profit because it equates to long term prospects.
Doing more than the bare minimum for staff and customers alike erodes profit but is essential for public image, quality of service etc.
There will be many differing views on how to maximise profit, so it is hardly "end of" as you so conceitedly put it, it's more like "beginning of".
Betfair should be run with only 1 principal aim :-
...to maximise profits.
End of.
No offence, Johnny but that is the most facile and stupid post I have read on this subject.
Maximising profit in the short term might be long term suicide.
Likewise, maximising long term profits might be missing opportunities in the short term.
Many shareholders would argue that the share price is more important than profit because it equates to long term prospects.
Doing more than the bare minimum for staff and customers alike erodes profit but is essential for public image, quality of service etc.
There will be many differing views on how to maximise profit, so it is hardly "end of" as you so conceitedly put it, it's more like "beginning of".
yes, saying "to maximise profits" without giving a timescale is utterly meaningless.
Shareholders loving it Share price down 9% since 10Th May to £8.14 - The offer of £9.50 that was turned down looking like a bold decision. Lets hope they keep on "maximising" profits
Guy#2: Gets an email from Betfair saying that he from now on will have to a premium charge if his commission generated is too low in relation to his gross profit.
--------
if Guy#2's having outright back bets at 6.0 on Rooney FGS, he's not getting that email NAP
--------
if Guy#2's having outright back bets at 6.0 on Rooney FGS, he's not getting that email NAP
Jun 6, 2013 -- 1:33PM, viva el presidente! wrote:
Guy#2: Gets an email from Betfair saying that he from now on will have to a premium charge if his commission generated is too low in relation to his gross profit.--------if Guy#2's having outright back bets at 6.0 on Rooney FGS, he's not getting that email NAP
Maybe it was a cup game at home against weak opponents, and maybe RvP was rested, Rooney playing up front, and the one most likely to take any penalty for United? 6.0 would be a fantastic price then.
Jun 6, 2013 -- 10:36AM, rcing wrote:
mr anderson , 20 - 60 % of anything is not small do you pay pc mr anderson ?
Yes, I realise saying Betfair taking a smallish part of profits in some cases may be stretching the truth a bit for people who have won in excess of £250,000. The guy in my ad has not yet won that much, but the ad might need some small print :)
what about those that haven't won £250,000 but are paying 20% ?
5% is small
20% or one fifth is not
hth
5% is small
20% or one fifth is not
hth
well...okay. so long as you promise that's all he's doing. 
Jun 6, 2013 -- 2:37PM, rcing wrote:
what about those that haven't won £250,000 but are paying 20% ?5% is small20% or one fifth is not hth
Since most people already pay at least 10% through commission I think it's reasonably fair to say that the part of profit that Betfair take through PC at the 20% level is rather small. Please note that I'm not a fan of the premium charge. I dislike PC40 in particular. I'm just trying to help Betfair with their advertising given the current situation:)
most people pay at least 10%
do you mean most pc payers ?
I think it's reasonably fair to say that your reality of what is small percentage wise needs calibrating .
if you go into a shop and the paper , milk or chocolate bar has gone up by 5% it's not much , but if it went up 20% that is large
£1 - £1.05 not much of a rise
£1 - £1.20 a large rise
at what point does a % out of 100 become large ?
do you mean most pc payers ?
I think it's reasonably fair to say that your reality of what is small percentage wise needs calibrating .
if you go into a shop and the paper , milk or chocolate bar has gone up by 5% it's not much , but if it went up 20% that is large
£1 - £1.05 not much of a rise
£1 - £1.20 a large rise
at what point does a % out of 100 become large ?
Jun 6, 2013 -- 3:06PM, rcing wrote:
most people pay at least 10% do you mean most pc payers ?I think it's reasonably fair to say that your reality of what is small percentage wise needs calibrating .if you go into a shop and the paper , milk or chocolate bar has gone up by 5% it's not much , but if it went up 20% that is large£1 - £1.05 not much of a rise£1 - £1.20 a large riseat what point does a % out of 100 become large ?
Yes, I think most (but not all) PC payers pay in excess of 10% of their gross profit in commission.
I'm not going to argue about what's small and what's large. My post was not meant to be taken deadly seriously anyway.
Of course there are different views on how to maximise long term profits...
..you guys have your one sided view, that abolishing the PC, encouraging the pros to match more bets and therefore generating more (short term) commission for BF is the way ahead.
The directors appear to believe it is in the best long term interests of the company to sacrifice some short term commissions (and liquidity) to prevent chunks of cash being sucked from the ecosystem by these regular winners. This cash is then available to be rebet over and over again generating even more long term commissions for BF.
Who would you back to be right?..the directors who have all the facts and figures available...or a bunch of aggrieved punters on a forum ?
..you guys have your one sided view, that abolishing the PC, encouraging the pros to match more bets and therefore generating more (short term) commission for BF is the way ahead.
The directors appear to believe it is in the best long term interests of the company to sacrifice some short term commissions (and liquidity) to prevent chunks of cash being sucked from the ecosystem by these regular winners. This cash is then available to be rebet over and over again generating even more long term commissions for BF.
Who would you back to be right?..the directors who have all the facts and figures available...or a bunch of aggrieved punters on a forum ?
Johnny The Guesser,
You lost the argument on other thread 'THE PREMIUM CHARGE MUST BE SCRAPPED' and you appear here again spouting the same rubbish. It is quite clear that the premium charge was and is a mistake for the exchange.
The directors appear to believe it is in the best long term interests of the company to sacrifice some short term commissions (and liquidity) to prevent chunks of cash being sucked from the ecosystem by these regular winners. This cash is then available to be rebet over and over again generating even more long term commissions for BF.
Who would you back to be right?..the directors who have all the facts and figures available...or a bunch of aggrieved punters on a forum ?
As you know well (from the other thread) Mark Davies who had the 'facts and figures' was part of the Premium Charge decision back in 2008. He supported it then. He now says it was not a good idea as they never accounted for the long term affect it would have on the good will of customers.
You are being very sneaky coming back on a different thread with the same false arguments.
You lost the argument on other thread 'THE PREMIUM CHARGE MUST BE SCRAPPED' and you appear here again spouting the same rubbish. It is quite clear that the premium charge was and is a mistake for the exchange.
The directors appear to believe it is in the best long term interests of the company to sacrifice some short term commissions (and liquidity) to prevent chunks of cash being sucked from the ecosystem by these regular winners. This cash is then available to be rebet over and over again generating even more long term commissions for BF.
Who would you back to be right?..the directors who have all the facts and figures available...or a bunch of aggrieved punters on a forum ?
As you know well (from the other thread) Mark Davies who had the 'facts and figures' was part of the Premium Charge decision back in 2008. He supported it then. He now says it was not a good idea as they never accounted for the long term affect it would have on the good will of customers.
You are being very sneaky coming back on a different thread with the same false arguments.
This cash is then available to be rebet over and over again generating even more long term commissions for BF.
No the cash is being bet with other firms because there is no liquidity here due to the costs being too high.
Early racing is back with the bookies with best odds guarenteed.
Football betting is with pinny and sbo.
Betfair cannot compete on price anymore.
No the cash is being bet with other firms because there is no liquidity here due to the costs being too high.
Early racing is back with the bookies with best odds guarenteed.
Football betting is with pinny and sbo.
Betfair cannot compete on price anymore.
In that other world, the real one, the premium charge would be called a "tax." And, as we all know, everyone who pays tax is delighted to do so because we all understand that the Government has a deficit to fund, not to mention an ever increasing debt mountain. We fully understand the reasons why tax is there, which is why we all want to work harder and harder so that we can pay more of it, so that Government can spend our income for us, in ways which are, of course, highly productive and never wasteful.
BF has moved on from the "all matched bets are good for business" notion.
As the exchange model has evolved, the directors now understand that some matched bets may even be bad for business. These bets need to attract higher fees or be discouraged entirely.
The concept of charging higher prices to those customers that need your services the most, or have the ability to pay more, cannot be argued with. It's basic economics. Why would BF not seek to do this?...every other business in the land does it!
Does BF need the pros more than the pros need BF?
You think they do...the company would appear to think otherwise.
As the exchange model has evolved, the directors now understand that some matched bets may even be bad for business. These bets need to attract higher fees or be discouraged entirely.
The concept of charging higher prices to those customers that need your services the most, or have the ability to pay more, cannot be argued with. It's basic economics. Why would BF not seek to do this?...every other business in the land does it!
Does BF need the pros more than the pros need BF?
You think they do...the company would appear to think otherwise.
I dont know why you insist on arguing this AGAIN!
Betfair's revenues were growing at an explosive rate before the first Premium charge. They slowed after the 20% PC. After the 40-60% PC the growth STOPPED.
You are arguing that because a policy is in place by the 'directors' that it is the correct policy. That is daft. The policy was brought in at 20%. Someone in the company probably argued against it but on balance they decided to do it.
Then in 2011 they were trapped in a corner. Admit they were wrong and scrap the PC or go in for an even bigger tax. Some one (no one knows who) came up with the 40%-60% scheme that has caused the decline in revenues. Whether that person is still at Betfair is unknown.
If the PC did not already exist (and the directors knew the long term consequences of it) they would not bring it in now. The extra commission from the liquid markets would have far outstripped the tiny revenue the PC gives them.
Now you have a the status quo where the current PC exists. There is pressure on short term revenues from the stock market. The risk now is that scraping the PC will take several million off the profits immediately whereas the benefits will come over the medium term. That is a hard policy to explain to short term investors.
Betfair's revenues were growing at an explosive rate before the first Premium charge. They slowed after the 20% PC. After the 40-60% PC the growth STOPPED.
You are arguing that because a policy is in place by the 'directors' that it is the correct policy. That is daft. The policy was brought in at 20%. Someone in the company probably argued against it but on balance they decided to do it.
Then in 2011 they were trapped in a corner. Admit they were wrong and scrap the PC or go in for an even bigger tax. Some one (no one knows who) came up with the 40%-60% scheme that has caused the decline in revenues. Whether that person is still at Betfair is unknown.
If the PC did not already exist (and the directors knew the long term consequences of it) they would not bring it in now. The extra commission from the liquid markets would have far outstripped the tiny revenue the PC gives them.
Now you have a the status quo where the current PC exists. There is pressure on short term revenues from the stock market. The risk now is that scraping the PC will take several million off the profits immediately whereas the benefits will come over the medium term. That is a hard policy to explain to short term investors.
i thought that the premium charge was introduced to fund betfairs advertising/recruitment of new punters
etc
as such it isnt (wasnt) a bad idea
however i dont think betfairs adverts get the message across, and seem, to me , to be advertising to people who are already aware of betfair, and not to new blood
meanwhile betfair lose customers because national governments prohibit the use of betfair
so the premium charge may have been a good idea at the time, but as it seems to have had an adverse effect on some liquidity that it cannot replace then surely they can at least look at a suspension of the charges on a trial basis to see what the effect would be ???
etc
as such it isnt (wasnt) a bad idea
however i dont think betfairs adverts get the message across, and seem, to me , to be advertising to people who are already aware of betfair, and not to new blood
meanwhile betfair lose customers because national governments prohibit the use of betfair
so the premium charge may have been a good idea at the time, but as it seems to have had an adverse effect on some liquidity that it cannot replace then surely they can at least look at a suspension of the charges on a trial basis to see what the effect would be ???
frog2's campaign suits his interests, not the betting ecosystem's. If someone wins £10m, it is fair enough to ask them to stump up at least £5m, if they were paying a lot less than that before the PC. Johnny the Guesser is just on the windup.
frog2
You obviously do not read my posts carefully.
You guys have plenty of opinions about what causes what and why,(your 12.53 post is a perfect example), but have only scraps of actual facts and figures on which to base your one eyed views. The directors, however, will have all of the financial data available to them when setting pricing policies and key business strategies.
I've never stated the directors are correct in implementing the PC,but as an outsider,I would trust their informed business opinions over those held by the aggrieved punters on the forum.
A few FACTS
- There will be a multitude of reasons behind why BF's growth has stopped. (How about a worldwide recession for starters? - "No, let's ignore that - it's all down the PC!")
- The directors answer to the shareholders ,nobody else -certainly not to you guys! If the directors mess up,they get sacked, and somebody else has a go. That's how it works.
- The directors job is to maximise profits and hence shareholder returns. Their job is most certainly NOT to run an utopian betting exchange for the benefit of the punters.
- The PC is a mess, I agree!!. However,the concept of a (near) monopoly charging higher prices to customers that need its services the most is certainly economically the right thing to do.In fact,the board would be not be doing their job properly if they chose not to!
Now back to opinion - I'm sure BF would love to close some 'unprofitable' accounts but wouldn't want to attract the adverse publicity this would bring ("Winners not welcome").The PC will have quietly encouraged some of these punters to 'move on'.
As an outsider I have no idea whether the PC actually 'works'in the long term or not - I have no detailed financial data to analyse. Do you?
But, as a tool to :-
- increase profits
- encourage 'unprofitable' accounts to move their business elsewhere
- and reduce cash withdrawals
...it makes sense.
You obviously do not read my posts carefully.
You guys have plenty of opinions about what causes what and why,(your 12.53 post is a perfect example), but have only scraps of actual facts and figures on which to base your one eyed views. The directors, however, will have all of the financial data available to them when setting pricing policies and key business strategies.
I've never stated the directors are correct in implementing the PC,but as an outsider,I would trust their informed business opinions over those held by the aggrieved punters on the forum.
A few FACTS
- There will be a multitude of reasons behind why BF's growth has stopped. (How about a worldwide recession for starters? - "No, let's ignore that - it's all down the PC!")
- The directors answer to the shareholders ,nobody else -certainly not to you guys! If the directors mess up,they get sacked, and somebody else has a go. That's how it works.
- The directors job is to maximise profits and hence shareholder returns. Their job is most certainly NOT to run an utopian betting exchange for the benefit of the punters.
- The PC is a mess, I agree!!. However,the concept of a (near) monopoly charging higher prices to customers that need its services the most is certainly economically the right thing to do.In fact,the board would be not be doing their job properly if they chose not to!
Now back to opinion - I'm sure BF would love to close some 'unprofitable' accounts but wouldn't want to attract the adverse publicity this would bring ("Winners not welcome").The PC will have quietly encouraged some of these punters to 'move on'.
As an outsider I have no idea whether the PC actually 'works'in the long term or not - I have no detailed financial data to analyse. Do you?
But, as a tool to :-
- increase profits
- encourage 'unprofitable' accounts to move their business elsewhere
- and reduce cash withdrawals
...it makes sense.
I have never paid the premium charge.
But I do think its in all the stakeholders interests to see Betfair's market share of the world betting markets grow and for more liquidity to be on the exchange. I think everyone would benefit from that; small users, big users, traders, outright gamblers, long term shareholders and management who are on long term incentive plans.
The only people it doesn't suit is short term shareholders and management who have short term incentive schemes.
Its the same as the situation with any government. If your incentive is to get more short revenue you increase taxes. In the middle ages ministers would be given incentives by the king to get more revenue to pay for wars etc. They kept raising the taxes to pay for it. The problem is eventually the taxes are so high people work less and find ways of avoiding them. The tax take goes down not up. The economy shrinks instead of growing.
Betfair are taking the short term view rather than the long term one. They have basically given up on trying to grow the exchange and are raising taxes on it instead.
But I do think its in all the stakeholders interests to see Betfair's market share of the world betting markets grow and for more liquidity to be on the exchange. I think everyone would benefit from that; small users, big users, traders, outright gamblers, long term shareholders and management who are on long term incentive plans.
The only people it doesn't suit is short term shareholders and management who have short term incentive schemes.
Its the same as the situation with any government. If your incentive is to get more short revenue you increase taxes. In the middle ages ministers would be given incentives by the king to get more revenue to pay for wars etc. They kept raising the taxes to pay for it. The problem is eventually the taxes are so high people work less and find ways of avoiding them. The tax take goes down not up. The economy shrinks instead of growing.
Betfair are taking the short term view rather than the long term one. They have basically given up on trying to grow the exchange and are raising taxes on it instead.
i been ft on betfair for approximately 10 years i turned over millions each year...literally and generated around £800 a week commission the last 4-5 years
i only qualified for PC2 as my lifetime gross commission to gross profits was over 30%
yet i'm now crippled bcause i have been penalised for winning over £250k in my lifetime yet someone who has generated diddly squat can earn £250k paying only 20%
where is the fairness in that ??? considering this has being my FT income for over 10 years is is not reasonable to assume £250k is a paltry figure....why not £1million etc
i only qualified for PC2 as my lifetime gross commission to gross profits was over 30%
yet i'm now crippled bcause i have been penalised for winning over £250k in my lifetime yet someone who has generated diddly squat can earn £250k paying only 20%
where is the fairness in that ??? considering this has being my FT income for over 10 years is is not reasonable to assume £250k is a paltry figure....why not £1million etc
oh and to add insult to injury i have constantly complained about it...to be told if i don;t like it i should find another way to earn my income!!!
key accounts member of staff told me that earlier this week!!!!
i was told because i have won so much from betfair i have to pay A PREMIUM CHARGE for a PREMIUM SERVICE...ffs
now is there any wonder why i and many others i know who have being FT on here for so long feel so much bad will towards betfair MR CORCORAN....seriously, you treat your key customers with UTTER CONTEMPT
frog2
You obviously do not read my posts carefully.
You guys have plenty of opinions about what causes what and why,(your 12.53 post is a perfect example), but have only scraps of actual facts and figures on which to base your one eyed views. The directors, however, will have all of the financial data available to them when setting pricing policies and key business strategies.
You over estimate what the directors actually do. The key shareholder this thread is about did not even have a Betfair account for several years as a director. Its management that decide policy.
A few FACTS
- There will be a multitude of reasons behind why BF's growth has stopped. (How about a worldwide recession for starters? - "No, let's ignore that - it's all down the PC!")
Hills online revenues up £100m last year during the 'recession'. Other firms growing YOY also.
- The directors answer to the shareholders ,nobody else -certainly not to you guys! If the directors mess up,they get sacked, and somebody else has a go. That's how it works.
Do you mean management? If the management were doing so well why was there a takeover bid to change policy? A guy with a 6.5% shareholding tried to takeover the firm but failed.
- The directors job is to maximise profits and hence shareholder returns. Their job is most certainly NOT to run an utopian betting exchange for the benefit of the punters.
Totally agree. As a non-PC customer I think their pricing strategy is wrong. As do many others including people in the founding team. Its not just the PC. Its the high commission on prematch soccer, tennis and other events that is stopping growth. With no PC and lower commission I would be happy to move all my soccer turnover to BF. At the moment it is elsewhere because its cheaper.
- The PC is a mess, I agree!!. However,the concept of a (near) monopoly charging higher prices to customers that need its services the most is certainly economically the right thing to do.In fact,the board would be not be doing their job properly if they chose not to!
Betfair has a 'monopoly' where it is cheapest. e.g. inplay sports for traders. It has this monopoly because it charges per market. If it charged more people would not bet. Where it doesnt have a monoply - e.g. early racing, preplay sport its liquidity is rubbish because it charges too much.
Now back to opinion - I'm sure BF would love to close some 'unprofitable' accounts but wouldn't want to attract the adverse publicity this would bring ("Winners not welcome").The PC will have quietly encouraged some of these punters to 'move on'.
Clock beaters - fine. But in the long run their time will disappear anyway. Do u really want to get rid of market makers? Guys who make £100k a year but generate millions the other side to BF in commissions? I dont think so.
As an outsider I have no idea whether the PC actually 'works'in the long term or not - I have no detailed financial data to analyse. Do you?
Just the publicly available info that shows the exchange liquidity is on a downward spiral. I heard that the PC generates £4m a year. It costs very little to generate so on a company with only £20m-£30m profits I can see why they wouldn't scrap it. But compared to £380m revenue its peanuts.
But, as a tool to :-
- increase profits
yes £4m must of which goes straight to the bottom line.
- encourage 'unprofitable' accounts to move their business elsewhere
dont get that theory. Do the NYSE say 'no thanks' to profitable banks? Liquidity is the key for an exchange. Without it losers and winners move elsewhere.
- and reduce cash withdrawals
See above. BF would rather have 60% of a small cake (plus 100% of the otherside) rather than 10% of a massive cake (and 100% of the other side). Makes no sense in the long run.
...it makes sense.
How?
You obviously do not read my posts carefully.
You guys have plenty of opinions about what causes what and why,(your 12.53 post is a perfect example), but have only scraps of actual facts and figures on which to base your one eyed views. The directors, however, will have all of the financial data available to them when setting pricing policies and key business strategies.
You over estimate what the directors actually do. The key shareholder this thread is about did not even have a Betfair account for several years as a director. Its management that decide policy.
A few FACTS
- There will be a multitude of reasons behind why BF's growth has stopped. (How about a worldwide recession for starters? - "No, let's ignore that - it's all down the PC!")
Hills online revenues up £100m last year during the 'recession'. Other firms growing YOY also.
- The directors answer to the shareholders ,nobody else -certainly not to you guys! If the directors mess up,they get sacked, and somebody else has a go. That's how it works.
Do you mean management? If the management were doing so well why was there a takeover bid to change policy? A guy with a 6.5% shareholding tried to takeover the firm but failed.
- The directors job is to maximise profits and hence shareholder returns. Their job is most certainly NOT to run an utopian betting exchange for the benefit of the punters.
Totally agree. As a non-PC customer I think their pricing strategy is wrong. As do many others including people in the founding team. Its not just the PC. Its the high commission on prematch soccer, tennis and other events that is stopping growth. With no PC and lower commission I would be happy to move all my soccer turnover to BF. At the moment it is elsewhere because its cheaper.
- The PC is a mess, I agree!!. However,the concept of a (near) monopoly charging higher prices to customers that need its services the most is certainly economically the right thing to do.In fact,the board would be not be doing their job properly if they chose not to!
Betfair has a 'monopoly' where it is cheapest. e.g. inplay sports for traders. It has this monopoly because it charges per market. If it charged more people would not bet. Where it doesnt have a monoply - e.g. early racing, preplay sport its liquidity is rubbish because it charges too much.
Now back to opinion - I'm sure BF would love to close some 'unprofitable' accounts but wouldn't want to attract the adverse publicity this would bring ("Winners not welcome").The PC will have quietly encouraged some of these punters to 'move on'.
Clock beaters - fine. But in the long run their time will disappear anyway. Do u really want to get rid of market makers? Guys who make £100k a year but generate millions the other side to BF in commissions? I dont think so.
As an outsider I have no idea whether the PC actually 'works'in the long term or not - I have no detailed financial data to analyse. Do you?
Just the publicly available info that shows the exchange liquidity is on a downward spiral. I heard that the PC generates £4m a year. It costs very little to generate so on a company with only £20m-£30m profits I can see why they wouldn't scrap it. But compared to £380m revenue its peanuts.
But, as a tool to :-
- increase profits
yes £4m must of which goes straight to the bottom line.
- encourage 'unprofitable' accounts to move their business elsewhere
dont get that theory. Do the NYSE say 'no thanks' to profitable banks? Liquidity is the key for an exchange. Without it losers and winners move elsewhere.
- and reduce cash withdrawals
See above. BF would rather have 60% of a small cake (plus 100% of the otherside) rather than 10% of a massive cake (and 100% of the other side). Makes no sense in the long run.
...it makes sense.
How?
ironic that JTG is criticising people for forming judgements with only scraps of info yet also accusing people of effectively talking their book without actually knowing what their PC status is.
FYI, I haven't paid any PC for over 3 years. from a narrow perspective, it's in my interest for the charging regime to remain as it is.
FYI, I haven't paid any PC for over 3 years. from a narrow perspective, it's in my interest for the charging regime to remain as it is.
Thats the situation. People like us that do not even pay the pc can see the problems it causes. Someone just had an excel spreadsheet and filtered out an amount of cash they could make by increasing it. Of course no thought was given to implications to the exchange as a whole.
How much would be traded pre-match on EPL games with no PC and commission at 0.5%? £100m plus I reckon. Maybe more. It would wipe out all the agents and bookies in Asia. But while Betfair continue to think small and grab a few quid in PC they have no chance.
How much would be traded pre-match on EPL games with no PC and commission at 0.5%? £100m plus I reckon. Maybe more. It would wipe out all the agents and bookies in Asia. But while Betfair continue to think small and grab a few quid in PC they have no chance.
Betfair should be run with only 1 principal aim :-
...to maximise profits.
End of.
Over what term?
The current mgmt. wd be delighted w/ three years. This creates a misalignment with the interests of long-term owners and players.
...to maximise profits.
End of.
Over what term?
The current mgmt. wd be delighted w/ three years. This creates a misalignment with the interests of long-term owners and players.
Who would you back to be right?..the directors who have all the facts and figures available...or a bunch of aggrieved punters on a forum ?
The implied price of bf when Softbank bought their stake in 2006 was £1.5 billion. Since that time the company has lost roughly 40% of its market capitalisation.
It's hard to say that the company has been run well since the founders left. Supposing that it was always going to find it harder to clear regulatory hurdles outside the UK and to break into the non-online and recreational pound, bf shd have handled expectations before and after its flotation much more carefully or have had more realistic projections of its revenue growth and translation to the bottom line.
The implied price of bf when Softbank bought their stake in 2006 was £1.5 billion. Since that time the company has lost roughly 40% of its market capitalisation.
It's hard to say that the company has been run well since the founders left. Supposing that it was always going to find it harder to clear regulatory hurdles outside the UK and to break into the non-online and recreational pound, bf shd have handled expectations before and after its flotation much more carefully or have had more realistic projections of its revenue growth and translation to the bottom line.
In introducing the pc, I wd guess that bf misestimated or failed to measure a number of things:
1) the implied monetary value to the company of the goodwill and word-of-mouth advertising of successful bf customers;
2) the amount of money that different classes of losing bf customer had to shed before they went stale and quit. The likelihood here is that the conmpany had too low an estimate for some people's losses, because they inferred a number from conventional online books and esp. poker sites;
3) the likelihood of a previously stale losing coming back to bf when they returned to betting, on the basis that bf prices or functionality was better. They wd have underestimated this again, since there is more choice in e.g. the poker market and losers on sites w/out bf's features tend for psychological reasons not to go back to where they had a bad experience;
4) the implied monetary value to bf of pc payers' 'always-on' liquidity, even if it was at such a price that it ensured wins for pc payers. How often do bf miss out on the share of the recreational pound they want b/c part of it is matched just after the punter logs on w/ the pc payer in a thin sub-market?;
5) a robust estimate on loss of liquidity due to pc and the carry-through of this to revenues;
6) the effect on the profitability of incumbent layers like Betting Promotions of pc payers' moving into their markets looking to make no more than breakeven bets--plus the effects of this activity on revenue from existing 'suppliers'.
All of these items can be answered by a number but terms like the loss of goodwill and the loss of custom due to empty markets needed to be estimated--and would need to be estimated now. The company's accountant-like preoccupation with measurable items overlooked a lot of more significant intangibles.
The company shd focus itself on getting a bigger share of the market and trust the P2P mechanism to keep enough of all bettors' activity. Let's take the case of an old-style casual bettor, an old guy who goes into a betting office to meet his friends on lunchtime say four days a week and bets a fiver four times a day. Let's say he goes 50 weeks a year and is careful with his money, a discerning favourite backer losing 10% of the value of his bets. This person loses more to his bookmaker than bf's ARPU (revenue per user) in their last accounts by a double-figure percentage. Even w/ bf's margins, pricing, interface etc. (w/ classic, pre-pc betfair) this antediluvian small-time enthusiast w/ a thoroughly sustainable habit wd be a better than average customer for the exchange.
Forgetting mobile, games, pc, sportsbook, all their often ****-eyed innovations, they shd have a strategy for attracting the ordinary losing punter's money. Bf have moved away from--thought they had to look beyond--their utterly simple core activity far too quickly.
1) the implied monetary value to the company of the goodwill and word-of-mouth advertising of successful bf customers;
2) the amount of money that different classes of losing bf customer had to shed before they went stale and quit. The likelihood here is that the conmpany had too low an estimate for some people's losses, because they inferred a number from conventional online books and esp. poker sites;
3) the likelihood of a previously stale losing coming back to bf when they returned to betting, on the basis that bf prices or functionality was better. They wd have underestimated this again, since there is more choice in e.g. the poker market and losers on sites w/out bf's features tend for psychological reasons not to go back to where they had a bad experience;
4) the implied monetary value to bf of pc payers' 'always-on' liquidity, even if it was at such a price that it ensured wins for pc payers. How often do bf miss out on the share of the recreational pound they want b/c part of it is matched just after the punter logs on w/ the pc payer in a thin sub-market?;
5) a robust estimate on loss of liquidity due to pc and the carry-through of this to revenues;
6) the effect on the profitability of incumbent layers like Betting Promotions of pc payers' moving into their markets looking to make no more than breakeven bets--plus the effects of this activity on revenue from existing 'suppliers'.
All of these items can be answered by a number but terms like the loss of goodwill and the loss of custom due to empty markets needed to be estimated--and would need to be estimated now. The company's accountant-like preoccupation with measurable items overlooked a lot of more significant intangibles.
The company shd focus itself on getting a bigger share of the market and trust the P2P mechanism to keep enough of all bettors' activity. Let's take the case of an old-style casual bettor, an old guy who goes into a betting office to meet his friends on lunchtime say four days a week and bets a fiver four times a day. Let's say he goes 50 weeks a year and is careful with his money, a discerning favourite backer losing 10% of the value of his bets. This person loses more to his bookmaker than bf's ARPU (revenue per user) in their last accounts by a double-figure percentage. Even w/ bf's margins, pricing, interface etc. (w/ classic, pre-pc betfair) this antediluvian small-time enthusiast w/ a thoroughly sustainable habit wd be a better than average customer for the exchange.
Forgetting mobile, games, pc, sportsbook, all their often ****-eyed innovations, they shd have a strategy for attracting the ordinary losing punter's money. Bf have moved away from--thought they had to look beyond--their utterly simple core activity far too quickly.
On 3) they have seen the light, in that the proportion of revenue coming from existing customers (89%--what others might see as a lack of growth) has become a metric in the company accounts.
Premium Charge is bad because 1.It is seen as unfair and unpopular by existing customers. 2.Potential new customers are put off by it,even though many would never be paying it. 3.Its existance makes advertising the betfair product difficult. 4.The PC is much too complicated,with very few really understanding fully how it works(this includes both staff and customers). Surely it would be better to scrap it entirely and charge different commision rates for users,there being standard figures for the average customers and betfair charging higher rates for more successful ones.These rates could be very flexible at betfairs discretion-depending how much they do/don't want any particular customers business.Such a strategy would allow betfair to make loud noises that they had scrapped the unpopular PC whilst allowing them enormous flexibility in controlling their customers percentage contributions.Betfair could closely monitor the changes and adjust the higher rate contributions at any time to maintain a balance between profitability and customer satisfaction/loyalty.
I regularly paid the PC and left BF completely because of it. I only came back when Purple closed all Australian accounts. I'm pretty much exclusively a cricket trader. What I do isn't rocket science, but it is crucially dependent on liquidity. What I see is liquidity has shrunk and appears to be still shrinking.
What a lot of people don't realize is much of BF's cricket volume is laying off by Asian bookies. They come to BF because the liquidity is here and because their aim is to lay off, they are not too concerned about 1 or 2 ticks, which allows people like me make a profit.
They don't pay the PC, but they do pay the 5%. Which is substantial when your gross margin is probably less than 15%.
I see much less of 10k and 20k chunks going through the cricket markets, than I did 2 or 3 years ago, which tells me BF already has a competitor for the Asian bookie wholesale business.
While BF drove away many liquidity providing cricket traders with the PC, I actually think the 5% commision is an equally big problem for BF, because it drives away the wholesale volume.
There is a saying in financial markets.
Liquidity begets volume and volume begets liquidity.
BF's current commision structure seems designed to reduce both. What is needed is commission discounts for volume and turnover (ie providing liquidity).
FYI, this is from BF's own educational material
'It is also quite often that bookmakers will 'lay off' on betting exchanges, so even though you believe you are betting against other punters, you are in actual fact also betting against other bookmakers on the exchanges.'
What a lot of people don't realize is much of BF's cricket volume is laying off by Asian bookies. They come to BF because the liquidity is here and because their aim is to lay off, they are not too concerned about 1 or 2 ticks, which allows people like me make a profit.
They don't pay the PC, but they do pay the 5%. Which is substantial when your gross margin is probably less than 15%.
I see much less of 10k and 20k chunks going through the cricket markets, than I did 2 or 3 years ago, which tells me BF already has a competitor for the Asian bookie wholesale business.
While BF drove away many liquidity providing cricket traders with the PC, I actually think the 5% commision is an equally big problem for BF, because it drives away the wholesale volume.
There is a saying in financial markets.
Liquidity begets volume and volume begets liquidity.
BF's current commision structure seems designed to reduce both. What is needed is commission discounts for volume and turnover (ie providing liquidity).
FYI, this is from BF's own educational material
'It is also quite often that bookmakers will 'lay off' on betting exchanges, so even though you believe you are betting against other punters, you are in actual fact also betting against other bookmakers on the exchanges.'
On one of the best days of the year in the stock market,Betfair's share price still manages to fall yet again.
Way below the offer price now.The PC charge has a negative momentum of it's own an is continuing to drive the stock
price down.
This is the greatest thread I have ever read on my 12 years on Betfair.This summer will be my last
time ever on Betfair unless something is done to remove the PC charge.I bet millions of pounds a year
on here so expect that liquidity to be gone soon.
Way below the offer price now.The PC charge has a negative momentum of it's own an is continuing to drive the stock
price down.
This is the greatest thread I have ever read on my 12 years on Betfair.This summer will be my last
time ever on Betfair unless something is done to remove the PC charge.I bet millions of pounds a year
on here so expect that liquidity to be gone soon.
This the latest TV ad in Australia. I thought it was really lame.
http://www.adnews.com.au/campaign/power-to-the-punter
http://www.adnews.com.au/campaign/power-to-the-punter
the creators of betfair played a blinder and sold at the top of the market - you hjave to question the ability of the fund managers who piled in,never mind it will only be some low paid public employees pensions that loose out - so no harm done eh.
Yeah the people on here who gave a great deal of their time helping Betfair
will never forget what they have done to them and the exchange model.
will never forget what they have done to them and the exchange model.
we all help betfair because we love them - we dont expect any reward ,its a labour of love.the share price cant grow because theres not enough new customers - the big boys want their market share and will fight to keep it,but theres good profit in the repetative punter churn - betfair just need to hold their own market share - which is easy given their prices and products ,plus the forum,which in itself is probably the best un tapped attraction its got - the forum was technically twitter before twitter started.
Totally disagree.The liquidity is down that is a fact and the forum is a shadow of it's former self.
As soon as the PC charge came out the numbers started dropping.Betfair's future is in serious doubt.
I should know that as I personally helped build the company up alongside flutter in the very early days.
As soon as the PC charge came out the numbers started dropping.Betfair's future is in serious doubt.
I should know that as I personally helped build the company up alongside flutter in the very early days.
comingupthehill
08 Jun 13 20:50
Joined:
10 Jul 05
| Topic/replies: 4,056 | Blogger: comingupthehill's blog
the creators of betfair played a blinder and sold at the top of the market - you hjave to question the ability of the fund managers who piled in,never mind it will only be some low paid public employees pensions that loose out - so no harm done eh.
Not sure if this is true - I think they could have got even more if they had gone ahead with their original float in c.2006?
08 Jun 13 20:50
Joined:
10 Jul 05
| Topic/replies: 4,056 | Blogger: comingupthehill's blog
the creators of betfair played a blinder and sold at the top of the market - you hjave to question the ability of the fund managers who piled in,never mind it will only be some low paid public employees pensions that loose out - so no harm done eh.
Not sure if this is true - I think they could have got even more if they had gone ahead with their original float in c.2006?
Isn't the liquidity down because the exchange has been banned in many a country? PC payers talking out their pockets here. Can't blame them though but I'm sure if the people at the top thought removing the PC would raise the share price they would have done so by now, they can't be that daft. They should have innovated the exchange, rather than going the sportsbook route. Messing the forum up was a bad idea as you are literally driving away thousands of people away from the site, why would want to do that I have no idea.
The only solace we can take is that an exchange will always exist in some form or another, you would think.
I object to people using API and bots anyway creaming and skimming prices. They should be hammered.
The only solace we can take is that an exchange will always exist in some form or another, you would think.
I object to people using API and bots anyway creaming and skimming prices. They should be hammered.
Fair points, Ham. The concept is p2p, not b2b. Bot and (to a lesser extent) API users should be charged more than manual entry punters. They are, after all enjoying an enhanced user experience.
Sadly though, if Betfair followed this logic, I've no doubt they would just keep PC the same for manual users and ramp up the charges on botters to 70 or 80%.
Now BF is publicly owned, trying to get them to think long term is hopeless. I would only expect them to react when the falling liquidity becomes a crisis which, as even the bluntest minds already know, will be too late.
Sadly though, if Betfair followed this logic, I've no doubt they would just keep PC the same for manual users and ramp up the charges on botters to 70 or 80%.
Now BF is publicly owned, trying to get them to think long term is hopeless. I would only expect them to react when the falling liquidity becomes a crisis which, as even the bluntest minds already know, will be too late.
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