General Betting
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17 Jun 13
19:18
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28 May 11
I'll start with this from the intro to 'the Star Principle' by Richard Koch, an early investor in Betfair and still a major shareholder.
"In the late 1990s, Andrew Black, known as Bert to his friends, had an idea. As a former professional gambler, he liked nothing more than playing poker through the night, and the thing he liked most about poker, apart from winning, was that the game was free. There were no bookmakers around to slice off their huge margin. Collectively, the friends he played with broke even. If one lost, somebody else won. But, when it came to horse racing and other sports, there was no way that individuals could exchange bets or avoid paying a king's ransom to third party bookies.
Unless Bert did something about it. Which he did. Together with the brother of a friend, Bet started a 'betting exchange' called Betfair. A betting exchange acts as a broker between individuals, charging a very small commission for doing so, a tiny fraction of what the bookies charge when they set odds."
That was true once upon a time. When Betfair and Flutter introduced the world to betting exchanges, they quickly became a major force due to the fact that they were better than the traditional bookies in so many ways. And not just marginally better, they blew the competition out of the water on value, keeping winning accounts open, allowing people to trade and lay and Betfair revolutionised sports betting when it started to offer in-play.
Since merging with Flutter, Betfair has held a monopoly of sorts in the exchange betting market, although they have faced fierce competition when looking at the sports betting market as a whole.
Over the years, Betfair has looked at the juicy margins of their competitors, seeing how 'little' they make on a tennis match where tens of millions of pounds are matched. While Betfair has focused on improving margins by increasing charges and offering all kinds of products on top of the exchange, their competitors have slashed margins. Betfair has not passed savings resulting from economies of scale on to customers in order to increase their competitive moat. Betfair could be the biggest sports betting company in the world. Unfortunately, any fun bettor wanting to bet on a Saturday English Premier League match who cares at least a bit about value , can look at odds comparison websites, and see that often, they can get better value elsewhere taking into account 2-5% commission.
The traditional bookies have successfully copied In-Play betting. We're now at the point where the margins of major UK bookies for IP are LOWER than the commission base rate on Betfair. Will's made 4.8% on turnover last year "within the normal 4-5% range".
Another snippet from the Star Principle: "On value alone, Andrew Black and his co-founder Ed Wray reckoned it should be easy to find new customers who would rapidly shift most or all of their betting to the exchanges. So it proved." That's certainly not true any more. Consider this: "Getting great value is essential if a gambler is to win, it is very difficult to win if the bookmaker takes out 20 per cent on each event." Well the difference between Betfair and the bookies is no longer so stark. Between 20-30% of Lads customers have a 'betting exchange' account. The question is, if they understand how the exchange works, why on earth are they still using Lads at all? HINT: It's probably not just for exotic bets.
There was a time when Betfair was better than the rest of the UK/EURO betting market combined. Now they are 'merely' better than any single other operator.
I think maintaining commission at 5% is more of an issue than even the PC. 5% was great in the early days, but with bookies slashing their margins, it's now too high. I still use Betfair almost exclusively, because most of the money I make comes from activities specific to an exchange (market making, trading etc.) People that place outright bets used to go to the exchange for great value, now they can frequently go elsewhere.
"In the late 1990s, Andrew Black, known as Bert to his friends, had an idea. As a former professional gambler, he liked nothing more than playing poker through the night, and the thing he liked most about poker, apart from winning, was that the game was free. There were no bookmakers around to slice off their huge margin. Collectively, the friends he played with broke even. If one lost, somebody else won. But, when it came to horse racing and other sports, there was no way that individuals could exchange bets or avoid paying a king's ransom to third party bookies.
Unless Bert did something about it. Which he did. Together with the brother of a friend, Bet started a 'betting exchange' called Betfair. A betting exchange acts as a broker between individuals, charging a very small commission for doing so, a tiny fraction of what the bookies charge when they set odds."
That was true once upon a time. When Betfair and Flutter introduced the world to betting exchanges, they quickly became a major force due to the fact that they were better than the traditional bookies in so many ways. And not just marginally better, they blew the competition out of the water on value, keeping winning accounts open, allowing people to trade and lay and Betfair revolutionised sports betting when it started to offer in-play.
Since merging with Flutter, Betfair has held a monopoly of sorts in the exchange betting market, although they have faced fierce competition when looking at the sports betting market as a whole.
Over the years, Betfair has looked at the juicy margins of their competitors, seeing how 'little' they make on a tennis match where tens of millions of pounds are matched. While Betfair has focused on improving margins by increasing charges and offering all kinds of products on top of the exchange, their competitors have slashed margins. Betfair has not passed savings resulting from economies of scale on to customers in order to increase their competitive moat. Betfair could be the biggest sports betting company in the world. Unfortunately, any fun bettor wanting to bet on a Saturday English Premier League match who cares at least a bit about value , can look at odds comparison websites, and see that often, they can get better value elsewhere taking into account 2-5% commission.
The traditional bookies have successfully copied In-Play betting. We're now at the point where the margins of major UK bookies for IP are LOWER than the commission base rate on Betfair. Will's made 4.8% on turnover last year "within the normal 4-5% range".
Another snippet from the Star Principle: "On value alone, Andrew Black and his co-founder Ed Wray reckoned it should be easy to find new customers who would rapidly shift most or all of their betting to the exchanges. So it proved." That's certainly not true any more. Consider this: "Getting great value is essential if a gambler is to win, it is very difficult to win if the bookmaker takes out 20 per cent on each event." Well the difference between Betfair and the bookies is no longer so stark. Between 20-30% of Lads customers have a 'betting exchange' account. The question is, if they understand how the exchange works, why on earth are they still using Lads at all? HINT: It's probably not just for exotic bets.
There was a time when Betfair was better than the rest of the UK/EURO betting market combined. Now they are 'merely' better than any single other operator.
I think maintaining commission at 5% is more of an issue than even the PC. 5% was great in the early days, but with bookies slashing their margins, it's now too high. I still use Betfair almost exclusively, because most of the money I make comes from activities specific to an exchange (market making, trading etc.) People that place outright bets used to go to the exchange for great value, now they can frequently go elsewhere.
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Investor2 I note you bet almost exclusively on betfair. All the time people like you bet here there is no reason for betfair to change. It's the same as all those that continue to bet here whilst paying the PC. Betfair won't change if they don't.
Some people say betfair are greedy in their charging, yet it could be argued that those that continue to bet here are greedy too. No offence meant, but if you want change, you have to take the first step. Betfair won't. |
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P.s.
Investor I agree with much of your sentiment . I bet elsewhere now purely because I get better value elsewhere as you suggested. |
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Based on some calculations I did a while back, BF's exchange is the most profitable business of any publicly listed UK company. Am I fairly sure everything else loses money. This is common with technology companies. Their first product is a hit, and then go on to invest the profits into a series of dud products.
I agree about the 5% commision, and would add another reason. I believe it has driven away much of the wholesale business (bookies laying off) away, in the markets I trade. |
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but the issue with big players isn't the commission base rate, it's the rate after maximum discount is applied. bookies laying off will be paying 2%.
if you think that's too high, what do you think it should be? |
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I'm thinking of S Asia bookies, mostly small (and illegal) operations, with a big need to lay off.
None of them will be on 2%, because no one in the cricket markets is on 2%. There aren't enough matches. |
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For non-price sensitive gamblers, TheInvestor2 is wrong, and 5% is probably too low. For price-sensitive gamblers, 5% just for matching two people together (and not even like say ebay running an auction, or well, anything really), is very high. If Breon Corcoran wants to turn Betfair into a Paddy Power/365 operation, attracting non-price sensitive gamblers will be his aim, instead of servicing price-sensitive ones. So the 5% is here to stay.
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hazel 17 Jun 13 19:40 Joined: 15 Jun 01 | Topic/replies: 444 | Blogger: hazel's blog
Investor2 I note you bet almost exclusively on betfair. All the time people like you bet here there is no reason for betfair to change. It's the same as all those that continue to bet here whilst paying the PC. Betfair won't change if they don't. Some people say betfair are greedy in their charging, yet it could be argued that those that continue to bet here are greedy too. No offence meant, but if you want change, you have to take the first step. Betfair won't. Betfair don't need to worry about losing me as a customer. I will only expand to other bookies, not replace Betfair with them. Even if I get better value elsewhere, I'll just take that as well as what I can get on Betfair. What Betfair do need to worry about is the people on the other side of my bets. If there is less money for me to bet against, then Betfair lose out along with me. Football liquidity is down year on year, and toward the end of the season it got to the point where 3pm EPL matches weren't really worth bothering with anymore for me, where traditionally they have been decent. |
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ballabriggs
Date Joined: 11 Jul 11 Add contact | Send message 18 Jun 13 03:14 Joined: 11 Jul 11 | Topic/replies: 297 | Blogger: ballabriggs's blog For non-price sensitive gamblers, TheInvestor2 is wrong, and 5% is probably too low. For price-sensitive gamblers, 5% just for matching two people together (and not even like say ebay running an auction, or well, anything really), is very high. If Breon Corcoran wants to turn Betfair into a Paddy Power/365 operation, attracting non-price sensitive gamblers will be his aim, instead of servicing price-sensitive ones. So the 5% is here to stay. The original exchange model was aimed at price sensitive customers though. It was a niche market. Most people care about things like exotic bets, and a nice looking betting shop. Betfair attracted people that cared about value. Clearly there is a strong correlation between size of bet and how savvy a customer is, so someone that bets 100,000 a month is likely to be more price sensitive than someone that bets 10 a month. I agree that Betfair can 'get away with' charging more than 5% in certain areas. Betfair have experimented with this, but maybe they should run a similar experiment in the UK and see what happens when the commission rate is reduced. I know Betfair exempted certain large customers from the increase in commission in the European countries, as they would simply leave. When I started on Betfair myself, I quickly started betting exclusively on the football total goals market. This was because Betfair was running a 1% commission deal there. As a trader/market maker on PC, the commission I pay is only somewhat important, it gets topped up with a PC bill anyway. I'd like the charges for people on the other side of my bets to be lower though. Worsening liquidity is a death spiral. If untelevised EPL doesn't improve, I'll stop trading it, which means the markets will be less attractive still etc. |
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At last.
I get sick of reading whingeing about the premium charge on here. It's the commission rate which is the issue. Don't forget the discounts have been reduced at least twice since Betfair started. Say you're a customer on here paying 4% commission, so you're a relatively heavy gambler betting regularly in hundreds of pounds. Perhaps pre-Betfair you used to make the game pay, probably by going racing and/or taking morning prices in the shops. Now, however, you find at the end of every year you just break even. You seem to have got older and lost your edge. And with it you lose your enthusiasm and drift away from the site. But what has actually happened? In fact you have been winning about 7 grand a year on here. You are in that tiny percentage of decent, winning punters. You're still a shrewdie, a man to be feared. It's just that Betfair has taken every single penny of your profit in commission - the lot. How the hell, on that basis, can you justify continuing either to use the site or put in the work needed to beat the market? The answer? Commission should not be 5% to 2%. It should be 0.5% to 0.2%. If that were the case Betfair would rule the world. And if that's too radical for the plodders who now run and own the company, how about offering the opportunity to pay a flat monthly fee instead of commission? If I could play on here for a monkey per month, my turnover would go through the roof. (PS A monkey is betting slang for £500 for the benefit of the current management.) |
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Keep an eye on Singapore. I was surprised to learn BF is legal there. I lived in Singapore for the best part of 10 years, and they are good at copying what works elsewhere and doing it better, cheaper. They have recently legalized casinos and I wouldn't be surprised if a BF clone was in the works.
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The answer? Commission should not be 5% to 2%. It should be 0.5% to 0.2%. If that were the case Betfair would rule the world.
You're right, something like that would start giving bookmakers sleepless nights again. For me it's critical. If I was on 5% instead of 2% I'd make nothing. |
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Over the past few years Betfair has fallen deeper and deeper into an identity crisis and I'm really not sure it has any idea what it is or what it is trying to do. Richard Koch seems to get it, and it's a great shame he failed in his bid.
Even a few years ago, with the laughable "Cut Out The Middleman" ads it was obvious. What is Betfair if not a middleman? A bet with a high street bookie cuts out the middleman, it's you versus him. Betfair was defining itself as the very opposite of what it was. And over the last few years, they've sought to re-position themselves without really thinking through what they are trying to do. If we crudely divide punters into sharks (price-sensitive value punters) and mugs (non-price sensitive opinion / entertainment punters). Betfair realised they had the sharks, and decided they needed to get more mugs. So they charge the sharks more (vastly more in some cases), making the value to them less attractive, ostensibly to fund the recruitment of mugs. But even now they run the "Is your bookie giving you value?" ads. Who does this attract? The shark already knows about what Betfair offers, and will use it when it offers best value to him. It won't attract sharks. The mug is a mug because he doesn't care about value. So value alone won't attract established mugs, he'll go on using the account he has or the shop closest to the pub where he's watching the match. It won't attract mugs. New bettors will likely start at a high street name, and if they begin to look for value or see an offer might check out this Betfair thing, but will, of course, land on a sportsbook that offers none of the value advertised. So who does this advertising appeal to? Their ideal customer needs to be shrewd enough to actually use Betfair, but not shrewd enough to actually use it well. That's a very thin segment! The fact is, value doesn't need advertising. People who want value will seek it out. So charging many existing high volume customers more , lessening the value to those customers, and in turn lessening the volumes and therefore the value actually in the exchange, in order to advertise this diminishing value to a bunch of people who by definition DON'T EVEN CARE ABOUT VALUE, is a laughable and absurd business strategy. It's all very well to want to change your customer demographic to a more profitable one, but they are scaring off core, existing customers, without anything whatsoever to offer to the customers they are looking to attract. It seems to me that, in looking to have it all, they are more likely to end up with nothing. |
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Painfully accurate analysis Total Bosman. The adverts are just getting silly now.
Betfair's biggest problem may be the incentives they have given to top management. If it is about short term revenue boosts, price hikes, sticking plasters, etc etc, then Betfair's long term interests will not be matched by their short term ones. I suspect this is what has been happening. [The stuff about Blue Sq punters using their free bets, and suddenly being counted as growth in customers using Betfair is a bit bizarre,....]. |
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good post TB
they're chucking money away on advertising to get market share, when actually what's in their interest is market size. let the sportsbooks attract people to sports betting, then focus on doing things which make the new recruits jump ship to you. it's a convenient myth that the 80-90% of the market not using BF proves punters aren't price sensitive and never will be. it's not true in any other business sector, so why should it be in betting? if you have objectively the best product and 12% of the market, it's not because 88% of people are stupid. it's because you're not running your business properly. and blaming the customer is always a sign of poor management. |
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I'm going to disagree strongly with an earlier post here. To think "mugs" don't care about value is just plain wrong. They virtually all do.
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There's a big difference between caring about value, being aware about where the best value is, and going to the time and effort to try and get the best value.
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This may be a stupid point or question, but I always wondered does advertising even work for betting companies, it seem to me a complete waste of money, because as total bosman said price sensitive customers will find their way to the where the value is, it's called oddscomparison.com, and the fish as I'll call them, will stumble into the nearest bookie at lunch or after work to put a bet on whatever takes their fancy at whatever prices is there, or if online do what the so called sharks do and compare , but in general are less price sensitive and lose in higher numbers, to keep people here and prevent themselves from constatnly spending millions recruitmting more fish, they should be flaunting their one and only unique feature, trading, , otherwise the fish will swim from bookie to bookie - oh and opening up the forum again might be a good idea,,,
the tens on millions they spend on sponsoring big events and producing uninspiring tv and radio ads could be much better spent though on coming up with a better and fairer commission structure to keep the real makret makers here, the liquidity the fish bring is surely cancelled out but the marketing expense, tb has it in one |
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Advertising crucial imo, especially now word of mouth business has probably dwindled to a trickle after they hit their biggest advocates with the premium charge
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It's basically why the betting industry is dominated by a few and is an ever increasing trend. New companies can't afford to advertise so cant get going. Betfair got over that by word of mouth.
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Saw a very interesting new product on facebook today - C***l Sportsplay. It is a (slightly primitive) mix of social betting, news, real gaming, and entertainment which is where Betfair should in the end head towards being a sophisticated version of.
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ballabriggs, there are two forms of incentive plan for Breon Corcoran, bf's ceo.
The first measures yearly performance and is based 45% on core revenue, 45% on core bf earnings per share and 10% on being a pleasant fellow. The second is measured over three years and is based 25% on revenue, 25% on earnings (I think) and 50% on total shareholder return (stock market performance). Payments for the second plan vest over a series of years. If all the targets are hit, Mr Corcoran's base salary of something just over 500k will represent 25% of his package. Apologies if the figures (quoted from memory) are slightly off. If the ceo feels that he's going to be replaced with someone who buys in more fully to the pure exchange concept, the temptation to hit short-term targets before taking a large redundancy package and bowing out w/ a burnished reputation may well be overwhelming. |
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Clydebank- you might be right but my experience is that the vast majority of people I know who are casual sports fans, will, when they have a bet, simply back an outcome they think will happen. That or they tick a few results on a coupon and hope for a big score. Value, in terms of a comparison between probability and odds on offer, does not enter their calculation in any detail. I've given up trying to educate friends to look for value, and certainly given up my Betfair evangelism: they are simply looking for convenience and a bit of fun. They will place the bet with the bookie they happen to be closest to, or with the account they have. This is the sort of recreational / entertainment "mug" Betfair seem to covet, but the one they are least likely to get- their sportsbook offers nothing in comparison the the established names and the exchange, if they can even find it, is beyond the interest or comprehension of almost all the casual bit-of-fun punters I know. And that's not to belittle anyone, a casual bet is a fun way to enhance a bit of sport and most folk treat it as such.
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The fact is, value doesn't need advertising.
Of course it doesn't. They shd slash the advertising budget by 80% other than in football-betting territories where their legal position is secure (Spain and Italy) and rely on shrewdies under the age of 40 (in the web generation) to tell their friends about the company. My other strategies for 1) bf wd be to partner with a mass-audience television channel (Channel 4 wd be ideal at almost any price if they cd get the gig) and simply run their prices next to a logo and telephone no. as a ticker across the bottom of the screen. 2) I wd also experiment with a partnership w/ a small chain of betting shops like betterbet or Corbett or Roar w/ FOBT style booths operated by touchscreens. Commission on these cd be something like 7%. I can't see that this wd be more loss-making than LMAX or many of their other experiments and anyway expenses like rental would be shared with their partner. 3)Finally I wd give every winning player everything he wants, to the degree that they begin to cannibalise each other. Absolutely everything that has gone down badly and cast a pall on the company (pc, the cross-matcher, the eyesore of a new site, the steps on the comm. ladder) shd go. This wd clear the air and crucially restore a sense of purpose within bf's own culture. |
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Agreed Askari. It's impatience and incentive-driven short-termism, pure and simple. If Betfair simply has the best value, the money will eventually flow here like a river running downstream. Even if the mug on the high street has never heard of here, a good slice his money, will end up here through arbs and hedges from their primary bet-takers, all without Betfair doing anything bar maintaining the infrastructure. They had this natural position sewn up and the only way they could have ballsed it up is more or less the path they seem to be taking.
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Total Bosman, their relationship w/ the bookmakers has become too cosy and their relationship w/ their actual liquidity providers too difficult.
The bm s are not genuine liquidity providers; the only times they want to hedge, apart perhaps from major meetings, there's only tumbleweed on here and they're not able to. Bm s profit primarily from bf by way of its providing a far more accurate complementary tissue than they cd ever have come up w/ themselves w/out exposing themselves to habitual winners / price-finders. How about less fine prices in the morning (clydebank's suggestion) or less availability of morning prices, other than to people who have committed themselves to striking a bet? An auction system may be too unwieldy but something that executed matches in a way similar to their sp mechanism only every fifteen mins. wd serve arbers, hedgers and tissue-based layers almost equally well while offering less of a free ride to their competitors. |
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Whilst I don't dispute that BF has pursued a strange strategy since the early glory years, and management might be described as either inept or over-agressive depending on your viewpoint, there may be a bigger factor at work.
What may be happening is that the exchange model has fast-tracked through the various new market cycles of innovation, early triers, rapid growth tailing off into maturity and zero growth to be followed by decline. At best, delaying decline may be the best option. Just 10 years or so to get to this. It's happened thousands of times before and will always be so.May have happened faster than other examples but that's the modern technological world for you. VHS machine anyone? Or Betamax, perhaps. IBM, now there's a blast from the past etc etc. The increasing competitive nature of the sports markets, especially in horse racing, equates to niches coming and going quickly. A big arber friend of mine (he shall be nameless) has seen his opportunities dry up and once into millions laying off on here is now dwindling fast. It can only get worse for arbers with Laddies about to turn on the power of having an exchange to link prices from exchange to shop coming through within months. And what of IR? I see that the money tree has stopped bearing fruit. Trading shops anyone? The BM's have responded with ever aggressive marketing to narrow and even close the price edge that BF claims. There is a somewhat arrogant tone on these forums when debating where the "mugs" are coming from. Get a dozen or so very clever poker players together and one or two of them will go bust because their edge is not quite good enough. Or they were just unlucky and luck (should we call it "randomness" so that we feel better about it)plays a huge part. There will be fewer and fewer "sharks" playing against each other. What is needed is not so much as more small players coming in (although that would be welcome) but more of them stepping up or scaling up to be "new sharks." That's where the turnover, the liquidity must come from. Perhaps that's what Koch was on about with his 80/20 argument. Most of the contributors on this forum these days (I've been around a while)seem to be traders ( I may be wrong) and these group has only come into the sports market since BF. Like religion which was never a topic of daily discussion 30 years ago, trading especially with bots has helped to create a new breed of player who may have proven to be the viper in the nest as far as the exchange modek is concerned. Help traders to come in to bring in the liquidity but then find that they suck you dry as they unlike "opinion players" seem able to win consistently. Feck was right all along about this, imo. So, is the exchange model at the point where it can only go downhill? Or is there a fure still? In my view, Bf made a crass decision to introduce higher charges, presumably because it would help boost earnings to achieve market flotation promises. I agree entirely with those who advocate lowering commission rates, scrapping the PC entirely, and going for a high volume/low margin business. Don't penalise winning punters. Encourage them to win as much as possible.The BM's couldn't compete with that strategy.Forget about being a techno outfit. BF are in the gambling business and the sooner they recgnize that fact, the better. |
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Other wise the future can be best described as becoming another "nanny-goat."
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Some great posts there, wouldn't it be incredible if the exchange model failed and ceased to exist, such a massive opportunity blown would be on the imaginary scale of Facebook self imploding! BF in 10 years time could be the Facebook of betting, the only place to bet, or not... BF in 10 years time could be just another BM.
High volume/low margin is the way forward to world domination, but will they ever recognise that? |
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High volume/ultra-low margin for most people, high volume/steeply rising margin for consistent winners, is the way forward to world domination.
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Unfortunately Betfair is nolonger a star business.
Its annual growth rate is no longer over 10% - level for 3 years. It is the 'leader' in the exchange betting but a 'follower' in the sportsbook business. It is now a cross between a cash cow and a dog. ......... It could become a star again if they stripped the business back to core exchange and slimmed the business down just to the staff required to run a stream lined exchange/professional sportsbook. If the sportsbook was mainly for countries where exchanges were illegal and was a professional not recreational bookie it would have a chance. The CEO announcing that he was only aiming for Betfair to be a second tier sportsbook was very uninspiring. Why are most of my football bets at Pinnacle when Betfair has a sportsbook and I am a loyal Betfair customer? How can Betfair return to being a start under current management whos experience is in running a bookies for fun recreational punters? This is a saturated market. Results should be out before the end of the month. Then we shall hopefully see how well the exchange is doing after the new management have had almost a year at it. |
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There are some really knowledgeable and experienced people contributing to this thread and other similar threads. BF are getting the best kind of contribution & feedback but are they really taking any notice? The guys who started this site and walked away with £millions did OK and they deserved it for the risks that they took. But the professional management since has been earning pretty good salaries whilst seemingly making a bit of a cods of it.
What we will we get out of giving this advice? nothing except a site where we can go and not get banned or limited. There was a time in another life when I would have charged £10's k for providing consultancy on this kind of problem ( different language, of course) but BF are getting my comments and other star people on here for nothing. It could become a star again if they stripped the business back to core exchange and slimmed the business down just to the staff required to run a stream lined exchange/professional sportsbook. Absolutely spot on, frog2. The £2 people will never be the way for new growth not in a lifetime. Go for the people who aspire to make a success of gambling, using their brains, their motivation to succeed, their experience, their knowledge & expertise gained elsewhere, there entrepreneurialism. The late great Phil Bull summed it all up for me with his views about horse racing and gambling which to paraphrase him were that it combines business and pleasure, entertainment with risk taking, better than crosswords, more fun than investing in anything else. Especially horseracing with its glamour, its colour etc.Encourage the people who want to win. let them win. Don't say, Ok you can win but as soon as you've won a certain amount we are going to make you pay much more. What cretin came up with that idea? How much did he walk away with? Pound to a penny it was a money man with no feel for the gambling market. It doesn't matter if only 10% or 1% or 0.1% make it to the PC level, kill the dream and you kill the business. Hope for a better life is all most of the people who play on here have. Take it away and you are left with no raison d'etre to gamble. |
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What may be happening is that the exchange model has fast-tracked through the various new market cycles of innovation, early triers, rapid growth tailing off into maturity and zero growth to be followed by decline
-------------- the reason this doesn't stack up for me is when that happens the decline is usually caused by the new being superseded by the newer. whereas what we're seeing is the new losing ground to basically what was there before. we're not looking at VHS - DVD - Download in sports betting. We're looking at VHS - DVD - slightly improved VHS. |
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Viva
I agree.Don't think we have reached the stage yet where something else has come along yet to re-place it. If we had then you would be seeing rapid decline, and although there is a problem or two, it's not that. It's more a case of having reached maximum penetration of your potential market and now relying on repeat purchases from existing customers, so to speak in marketing jargon plus attrition due to an increasing threat from a direct competitor(to be more so in future) plus fight back from traditional competitors.Fact is, there are limits to the number of punters interested in the exchange model and the ceiling may have been reached. Nothing to say that in every market you can reach x% of any given population. You find out where the ceiling is when you get there. |
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Imho you don't need to be "interested in the exchange model" to place your bets at a betting exchange. If it's a good place to place your straight bets, then it's a good place to place those bets. It shouldn't really bother anyone that it's an exchange, just as it doesn't matter to people if the restaurant they eat at is a franchise or not. People don't avoid dining at franchise restaurants because they aren't interested in the franchise model.
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Mr Anderson
Most people (80%+ at a guess) still prefer to bet with BM's rather than exchanges for many reasons. They wouldn't exactly use the term "exchange model" I agree but then that's for us on here to intellectualise about, isn't it? By now the message that you can get better prices has probably got through but still they won't budge from their long-standing preferences for the shops and betting on-line with BM's.That's what I mean about maturity. They've very largely converted all they are going to get . Youngsters will come through but they will probably just replace natural attrition of the oldies. |
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exactly, mr anderson. as someone else said, people don't have to be sensitive to value to be sensitive to price. in other words, even if they're willing to back a 100/1 no-hoper at a crap price, they'd still rather have 16/1 than 12/1.
I don't agree with koch about everything (I think his 80/20 pareto stuff just doesn't map simply onto a business where each customers' activity isn't discreet) but he's definitely right on the marketing budget. the beauty of the exchange model should be as follows: faced with your challenge, rivals spend more on advertising to hold up market share and revenue. their increased spend draws in new customers to the sector. your objectively better offer then sucks in some of that new custom that they've paid for. another irony is that one of the reasons PP have done so well is the effectiveness of their marketing at projecting an image of being blokey cheeky funsters, who aren't too bothered who they offend. in other words, pretty much exactly the brand image this forum used to create for free back when it was good. before they started chucking people off it then turned it into an embarrassing gated community they'd rather didn't exist. |
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Can civilians still view the forum - just not post - or is it shut off entirely now?
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even if they can, who wants to read a forum they can't post on?
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shareholders who want to get a feel for how customers are enjoying being customers of the company.
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