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frog2
05 Sep 13 14:21
Joined:
Date Joined: 01 Feb 08
| Topic/replies: 4,229 | Blogger: frog2's blog
The results are in for the first quarter after the sportsbook took the exchange off the Betfair front page.

Q1 FY14 Revenue £4.0m
Q1 FY13 Revenue £3.4m

So revenue is up £600,000 for May, June and July on the previous year.

To achieve this Betfair have thrown everything at the sportsbook

1. Management have been focused on it to the point where the CEO hasn't even looked at the affect of the Premium Charge on the exchange.

2. £5m was spent on April on getting 130,000 customers by buying bluesquare.

3. Customers are taken to the sportsbook confusing the them - a friend of mine stopped using the exchange because he cannot find the lay button anymore (coz he was on the sportsbook).

4. The brand is being destroyed. Betfair used to stand for:

    sharp betting
    flexibility
    liquidity
    value
        winners welcome

now I cannot think of a single unique positive way to describe it. The brand is being trashed in the obession to be like everyone else. What does the brand stand for now?

Looking at games they have gone from £19.8m to £13.7m. A massive decline with no Euro 2012 excuse. Another distraction away from the core business of the exchange.

.......

If we look at the exchange:
Q1 FY14 Revenue £60.0m
Q1 FY13 Revenue £68.9m

The revenue is down. The statement says that when international loses and Euro 2012 are taken into account the growth is a healthy 4%. This claim of 4% shows that even after:

1. Sending all new customers to the sportsbook
2. Confusing current customers with the new homepage
3. Having a clunky unorganised slow website
4. Leaving the Premium Charge in place
5. Making little or no commission adjustments to make football betting more competitive
6. Scraping any effort to educate customers about the exchange
7. Focusing advertising on the sportsbook

The exchange is growing and is by far the dominant part of the business.

1. Even after all the focus on the sportsbook and games and other rubbish over the last few years the percentage of core revenue has grown in the last year.

The exchange represents 76.1% of core revenue compared to 74.4% this time last year.

2. Overseas markets revenue on the exchange, particularly, has not fallen as much as expected. This shows that the product is more robust than sportsbook and games and need less advertising.

.......

Its hard to find a case for the continued attempts at diversifing by Betfair management. They have tried poker, social gambling, games, casino, lmax in the past.

They all confuse the person to person brand and have ended up taking up management time and have added very little to company.

Is the second tier sportsbook that they aspire to make Betfair really worth all the effort?

Breon Corcoran is probably the best gambling executive in Europe and you hear him say 'there are only so many hours in the day'. Almost 80% of his revenue comes from the exchange. Why is he focusing on the other 20%? Why is he so keen to develop a second tier sportsbook? Why sink so much time and effort into it rather than the exchange? He may not want to pay homage to the exchange but it is the exchange that creates the revenue.

Take away the exchange and you have nothing.

Take away the sportsbook, the games, the poker, the casino, the social gambling (already gone), lmax (already gone) and focus on the exchange and you will have a great product that sells itself via satisfied customers.
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Report Templeton Peck September 5, 2013 1:35 PM BST
A fall in active customers from 554,000 to 530,000 is the figure that interests me the most.

There's been a 60,000 fall in 'Other' markets - those Betfair don't deem to be sustainable - and an increase of 37,000 in 'Sustainable' markets.

Considering Betfair had very few sportsbook customers this time last year, I'm assuming this 37,000 increase is hiding a substantial fall in the number of exchange customers in 'sustainable' markets.

This is exactly what I've been seeing.  Liquidity/revenue might be holding up but this is down to the large players betting more in fewer markets.
Report hazel September 5, 2013 1:43 PM BST
To add, former PR director Mark  Davies use to  promote the  exchanges "transparency".  Today betfair's transparency has turned more to fog.
Report rcing September 5, 2013 1:51 PM BST
yeah but the share price is ok , that's all that counts .
Report hazel September 5, 2013 2:12 PM BST
rcing yeah, but they paint a rosy picture.  When the fog clears will they be in full bloom, or wilting?
Report rcing September 5, 2013 2:18 PM BST
it was a tongue in cheek comment hazel . as in , so long as the share price is ok , who cares what the customers think .
Report hazel September 5, 2013 2:23 PM BST
WinkHappy
Report CLYDEBANK29 September 5, 2013 2:44 PM BST
I didn't get where I am today without realising that a boat with a hole in will sink when it sets sail
Report CLYDEBANK29 September 5, 2013 2:56 PM BST
I think the fact that games revenue was 44% more a year ago than it is now is a telling reflection on the brand. The exchange is naturally protected from competition, exchange games are not.
Report FINE AS FROG HAIR September 5, 2013 4:27 PM BST
How can Corcoran ( the so called best gambling executive in Europe) come up with any answer other than the seemingly obvious YES.
Does he know something that is being missed by all on here ?
I can't think what it might be, but there must be some reason that makes sense ( to him at least).
The reason can't surely be as straightforward or as stupid as a blind devotion to short term share price manipulation. Nobody is that badly advised .
Report Galitzin September 5, 2013 4:30 PM BST
Well said frog2. We can see it. Why can't Betfair?
Report Compensation Year September 5, 2013 4:49 PM BST
The mistake many of us make is thinking that because BF is a listed company (albeit pretty small by most standards) then the management of the company must be top notch and know more than us - even when the answer is obvious to anyone with half a brain.

Having been involved with a few large PLC's over a lifetime I can assure you that that is not the case. You only have to look at the mess the bankers have got us into over the last 15 years or so to see the sort of people who get to lead very large companies here in the UK. Fred Goodwin is not alone.......
Report CLYDEBANK29 September 5, 2013 4:54 PM BST
Every Blue Square customer was offered a £25 free bet?  Be interesting to know how that is reflected in Q1 FY14 Revenue £4.0m.
Report Templeton Peck September 5, 2013 5:06 PM BST
CLYDEBANK29, and in 'active customers' numbers.
Report FINE AS FROG HAIR September 5, 2013 5:51 PM BST
I would think quite normally Clydebank.
That is the winning and losses would be recorded as such, and the 25 pounds would be recorded as a marketing expense. Pretty hard or in fact impossible I would say to breakdown from publicly available figures.
But no real trickery involved I would think.
You think differently ?
Report frog2 September 5, 2013 7:25 PM BST
When about 80% of your revenue comes from the exchange why on earth would your home page send people to the sportsbook?? Seriously something is very wrong here. It makes no sense.
Report frog2 September 5, 2013 7:29 PM BST
6% of revenue is from the sportsbook yet that is the focus of the business.
Report hazel September 5, 2013 7:35 PM BST
Frog you make sound and solid argument.  I suspect the management are aiming to change those figures so that more like 80% comes from the sportsbook.  It may be a case of heads down and keep marching on.
Report hazel September 5, 2013 7:39 PM BST
What's surprising is that institutional investors think they are on the right track.  They may be right.  But as you said, it would appear the original founders and supporters may have a different view.
Report pmbets September 5, 2013 7:45 PM BST
I see the demise of Betfair.I would not want to own this stock.Unless the PC charge can be scrapped this
is very near the highest the share price will ever reach.Most of us have been on here since the beginning.
The cost cutting has been the only real thing that have helped Betfair.The negative publicity it gains every day from it's
own customers against the winners tax will be too much in the end.It will all fall apart.I am glad I am all away from Betfair now and making a mint
at other companies mostly non bookie non exchange non poker.
Report frog2 September 5, 2013 8:20 PM BST
I cannot see how those figures could be reversed unless the figures seriously dropped. Hills sports had a revenue of £116m last year and they are arguably a tier one player. Betfair only aspire to be a tier two player.

The exchange is making £250m is revenue with no management focus at the moment.
Report FINE AS FROG HAIR September 5, 2013 8:31 PM BST
Perhaps frog that is the key point from BF mgt's point of interest.
The exchange revenues are not growable in their opinion , and the revenues they generate from it will stay at or about this level you mention, without any need for them to devote mgt. resources to it.
It's seen as a core speciality product by them, with no large growth potential, because of either its perceived complexity, or because they don't feel the average recreational punter will ever feel a great need or attraction to use it.
You think they're wrong, and you may well be very right, but at least it may explain their apparent indifference to the litany of complaints they must surely be reading and absorbing on here.
They may be dumb, but they can't be totally deaf.
Report FINE AS FROG HAIR September 5, 2013 8:39 PM BST
pmbets

"---making a mint at other companies mostly non bookie, non exchange, non poker ".
Care to elaborate a bit on this.
Or at least give us a hint as to where we all should be looking to go forward in the hope of large profit expectations.
Or do you have it all to yourself at the moment, and understandably want it to stay that way as long as possible.
Would be lovely to hear from you.
Report FINE AS FROG HAIR September 5, 2013 8:41 PM BST
Btw frog, is your hair fine like mine ?
Report FINE AS FROG HAIR September 5, 2013 8:42 PM BST
I think your gambling brain may be a bit finer, that's for sure.
Report CLYDEBANK29 September 6, 2013 12:29 PM BST
FAFH, I've no idea what normally is but if normally means returns for free bets are written down as marketing expenses, but the initial bet that triggered the free bet is included in net revenues, then this is going to artificially bolster net revenues.

What I would want to see is marketing expenses apportioned (correctly) to the relevant betting division.
Report Coachbuster September 6, 2013 1:02 PM BST
Even if i say it myself ,i do believe the exchange has reached absolute saturation point .  I think partly because of the money taken out of the pot by winners  ...(and the PC has never gone back into losers pockets or helped the exchange grow ,so no new trees planted to sustain the forest )
Also ,the money which was used by recreational (poor) gamblers over the years has dried up somewhat ,money hasn't been lent out ,people have seen their wages plummet in real terms .
  Degenerate gamblers always have ,and always will visit the bookies ...probably funded partly by these pay day loans and maybe  low level criminal activity  .
  So what is required ?   maybe an upturn in the economy ,or a new company taking the place of BF ,but what chance ?  . 
I'm guessing if BF were to advertise the exchange more or spend more time sending players to the exchange they would see it as short term gain only ...those players will eventually get picked off.

This is only my tuppence worth .

Desperate measures for them i reckon  .
Report Coachbuster September 6, 2013 1:14 PM BST
I suppose i'm being negative because of my experiences on here last 6 - 12 months , can't help noticing the fall off,especially the new season  .  (football) .

Trying to get bets taken at the right time  is becoming hard work even though the volume in ££ tells me  there is no change .

The bar has been raised - and as has already been mentioned , fewer rec' players ,more concentration of sharks it seems.
Report stu September 6, 2013 2:13 PM BST
Maybe there's a wiff of a change of heart - cf the front page format thread.

Though I've now lost it (somehow) my front page showed a new format with equal(ish) weighting for the exchange.
Report CLYDEBANK29 September 6, 2013 2:57 PM BST
I agree that the market is saturated and has been for some time, but plenty of people will always bet where they perceive they are getting the best value and service.  Where Betfair differs from bookmakers is that they are reliant on some clients providing better value and service.  There's less people providing this value and service as every week passes and this is the biggest problem imo.  At some point it might just all collapse.
Report Coachbuster September 6, 2013 3:52 PM BST
people will always bet where they perceive they are getting the best value (and service)

___________

which i think is half the problem Clyde - too many on here know all about value
Report Coachbuster September 6, 2013 3:54 PM BST
'There's less people providing this value and service'
_____________

do you mean fewer people as in the gamblers ?
Report CLYDEBANK29 September 6, 2013 4:25 PM BST
I mean there's fewer people sticking offers up for people to take
Report Just Checking September 6, 2013 4:50 PM BST
When people go to the odds comparison sites, is that price exchagne or sportsbook? I only see 1 price line for betfair on e.g, odd5checker.

Is this so ridiculous that people might see best (Exchange) BF odds on a comparison site, then come to BF and get the SB price?
Report siwaadupa September 6, 2013 5:28 PM BST
Good Job Frog!
Report AyersRock September 6, 2013 9:42 PM BST
If I were the managing director at betfiar I'd personally invite frog2 along for a meeting at HQ, you'd get a lot more done a lot quicker
Report FINE AS FROG HAIR September 6, 2013 10:05 PM BST
What a pity that pmbets didn't feel the desire to come back on and elaborate on his somewhat juicy claim of making a mint elsewhwere.
Can't say I'm overly surprised though.
Gotta keep your cards close to your chest to succeed in this game.
But why then come on and say it in the first place ?
Report FINE AS FROG HAIR September 6, 2013 10:08 PM BST
The mgt of BF used to schedule meetings with "aware" players to get feedback and suggestions.
Do they in fact still do this ?
Report FINE AS FROG HAIR September 6, 2013 10:16 PM BST
Btw pmbets I'm not trying to "fish"  out from you any hard earned winning stategy, I'm really just more interested in the intriguing claim that you are making good money on sites that are non bookie, non exchange.
I can't work that one out.
What else is there in the sports gambling world.
Wait a sec, maybe it's not sports at all that you are betting on.
Report Coachbuster September 6, 2013 10:28 PM BST
probably peddling his wares on e-bay  Laugh
Report Johnny The Guesser September 7, 2013 8:23 AM BST
"Please send your hard earned customers to bet with us rather than you."Laugh 


Not content with telling BF that's it's in their best interests to charge you less, you now start telling them what products they should sell, and how they should do it!

Be honest,you don't give a stuff about BF and their business, so don't pretend you do.

You just want a better platform to run your business (and there's nothing wrong with that ). When that platform appears elsewhere you will all be off in a flash, without as much as a backward glance.
Report stu September 7, 2013 9:30 AM BST
That's a valid point JTG - of course, everyone has their own interests at heart in the long and short run. But that doesn't mean it is not possible to be mutally beneficial to one another, which an exchange should be.

Those making good money can also be valuable assets to the company, as BF used to recognise in the good old days...
Report DOUBLED September 7, 2013 9:56 AM BST
"You just want a better platform to run your business (and there's nothing wrong with that ). When that platform appears elsewhere you will all be off in a flash, without as much as a backward glance.

That would account for 99.99% of people on here then Laugh
Report TheInvestor2 September 7, 2013 10:09 AM BST
Coachbuster 06 Sep 13 13:02

Even if i say it myself ,i do believe the exchange has reached absolute saturation point .  I think partly because of the money taken out of the pot by winners  ...(and the PC has never gone back into losers pockets or helped the exchange grow ,so no new trees planted to sustain the forest )
Also ,the money which was used by recreational (poor) gamblers over the years has dried up somewhat ,money hasn't been lent out ,people have seen their wages plummet in real terms .
  Degenerate gamblers always have ,and always will visit the bookies ...probably funded partly by these pay day loans and maybe  low level criminal activity  .
  So what is required ?   maybe an upturn in the economy ,or a new company taking the place of BF ,but what chance ?  . 
I'm guessing if BF were to advertise the exchange more or spend more time sending players to the exchange they would see it as short term gain only ...those players will eventually get picked off.

This is only my tuppence worth .

Desperate measures for them i reckon  .


I don't really buy that. Betfair attracts customers who will be quite a lot more savvy than the average shop punter. Quite a large portion of them care about value. The thing is that unless you're a trader, or you bet in the side markets, the best value is often found elsewhere.

If you're on 5% and you like to bet on big markets like match odds football, Pinny beats Betfair, and if you can get on with the UK books too, you'll barely ever bet on here. If you're on 2% and you like the same type of straight betting, a combination of pinnacle and the Asian bookies will beat Betfair.

This is markedly different from the original exchange which royally trounced the rest of the UK on value, even with 5% commission.

I'd be interested in recent figures, but I know that IBC (one of the biggest Asian bookies), had matched bets totalling $45Billion in 2010. In my opinion it's ridiculous that a bookie can work to lower margins (0.67% on 'real' bets) than an exchange. Remember as well that this $45Billion, which is considerably more than what is matched on Betfair, consists solely of REAL bets, not ping pong trading.

Betfair is great for traders, because you can trade on an exchange and Betfair is the dominant exchange. Betfair value for straight bettors relative to the competition has gone from absolutely superb to pretty good.
Report frog2 September 7, 2013 10:19 AM BST
TheInvestor,

I would be interested to find out where you got the IBC figures from. Have you any info on pinny and sbo?
Report frog2 September 7, 2013 10:29 AM BST
Football betting is clearly where the future is for sports betting.

Betfair's retreat to the UK and Ireland and refusal to attempt to compete on price means there will be a bigger shift of 'sophisticated bettors' away from Betfair. They have a great inplay product but the others are catching up. Liquidity is now greater with the bookies on most matches, books are 102-103% and there is no premium charge to pay. A big international football punter with £50k to bet on EPL games is no coming here.

If Betfair lose more and more of their high value 'sophisticated bettors' and stop trying to recruit new ones they will be left fighting out the domestic market of 'recreational bettors'. This market may seem big but it is extremely competitive requiring bigger and bigger bonuses and advertising spend to aquire new customers and retain current ones.
Report TheInvestor2 September 7, 2013 11:54 AM BST
frog2 link here.
http://www.spiegel.de/spiegel/print/d-80362919.html

and you can translate the page in chrome. The whole article is really interesting.
Report frog2 September 7, 2013 12:17 PM BST
Thanks for that. Interesting read.
Report Templeton Peck September 7, 2013 12:33 PM BST
Exactly how secure are your funds with these Asian bookies?  I've never used one but get the impression they could run off with your money and you'd have no chance of recouping it.
Report frog2 September 7, 2013 12:54 PM BST
SBO and some others are licensed in the Isle of Man. British bookies are offshore at the moment so in theory they should be the same risk. How safe are your funds even if the company has a UK license?

IBC only use agents. Its just a question of finding one you can trust.
Report CLYDEBANK29 September 7, 2013 2:39 PM BST
They only use agents so they don't have to question where the money comes from?  and if the money comes from illegal jurisdictions the agent takes the rap?
Report Coachbuster September 7, 2013 3:40 PM BST
'I don't really buy that. Betfair attracts customers who will be quite a lot more savvy than the average shop punter. Quite a large portion of them care about value. The thing is that unless you're a trader, or you bet in the side markets, the best value is often found elsewhere.'
_____________

can't disagree with that Investor, however even the savvy punters are feeling the pinch ...it all spells bad news either way  for this gaffe
Report Coachbuster September 7, 2013 3:40 PM BST
gaff *
Report askari1 September 7, 2013 3:40 PM BST
Imv it's all to play for for bf. The biggest bookies in the world will be those that appeal to the punter w/ a mobile and/or internet connection who's informed enough to get the best current price.

Bf are addressing no more than 200 mill. of the potential world betting population through their advertising spend. Market growth would be in the order of ten times that size in China, India, Indonesia, SE Asia and the US.

Imv bf have been unlucky on three counts:

1) They've started out in a country w/ a strong betting interest in horse racing, a declining sport wh/ will not appeal to the great majority of bettors anywhere once football betting has been liberalised. This has allowed them to grow and succeed up to a certain point w/ the original exchange model;

2) They've started out in a country w/ licensed betting offices, making them think their main competition is going to be shop premises catering to price-insensitive customers (in other words, selling light and warmth and tv screens and a friendly cashier);

3) The visionary initial founders bowed out once they had made their first 100 mill. or so. You now have a second generation of less far-sighted execs who are sick to death of hearing how good the exchange is and who are disposed against it, thinking that it will only appeal to a few and that its market is saturated.

They need to do everything they can--with the cheapest poss. ads--to promote IR football, first GS and correct score. They do not want the illegal Asian bm s betting w/ Pinny and the online Asian firms, rather than w/ them. They then need a 10-20 yr strategy for East and SE Asian markets.
Report Coachbuster September 7, 2013 3:42 PM BST
as has been mentioned in this thread ,In play football  is where the value is on here investor - i don't know anywhere else which competes (yet)
Report askari1 September 7, 2013 4:06 PM BST
Bf have a massive opportunity to dominate the world betting market thru exchange technology.

Betting is a business characterised by massive economies of scale. The cost of servicing the betting of your 500,000th customer is a lot less than that of serving your 500th.

Other businesses--like mine, teaching and training execs--are characterised by diseconomies of scale. This week I've been coaching an exec to make a business pitch to bankers. He had titled his speech, 'An Introduction of Smart Metering'. The best way to tell him it's an 'introduction to' and to sharpen up his pitch is one-to-one training. My business is having trouble expanding because it's hard to find other trainers I can trust and hard to leverage my expertise across any set of materials that hold value for a variety of situations.

Bf don't have any of these probs. They just have to build the best product and trust that it 'wins' in the marketplace.

Sadly the mgmt. don't seem to understand this.
Report Coachbuster September 7, 2013 4:29 PM BST
'Imv bf have been unlucky on three counts:'
___________

I w/ say th/ w/ lucky to start out w/ th/ did askari,th/ w/ have no chance today
Report Galitzin September 7, 2013 6:20 PM BST
Will these Asian bookies take a bet on the nags?!Wink
Report askari1 September 8, 2013 11:36 PM BST
Coach: I w/ say th/ w/ lucky to start out w/ th/ did askari,th/ w/ have no chance today

Fair enough.

But maybe the founders will return, a la Steve Jobs?
Report unemployable September 9, 2013 2:12 AM BST
I think some of you guys are missing the human element here.

There are some comments about Breon Corcoran being the most talented executive in the betting industry, etc etc. Utter tosh imo.

He was brought in by the board because they were clueless as to who to turn to next as all the rats were deserting the sinking ship.

Ok, he’s a bright guy. But so were messrs Hill, Davies & Fu, doesn’t make him a saviour though.

He made his name in a growing company in a fast expanding industry.

But let’s face facts, Paddy were only ever a sideline player with larger ambitions, something that hasn’t changed. They are still a sideline player with larger ambitions.

They never challenged the big boys, they never even challenged the new big boys.

So, what happens when you appoint an intelligent guy to a position he’s never experienced?

Answer is, he makes a list.

1 – Don’t feck up

2 – Slash / burn – (fair enough imo)

3 - Shore up share price

4 – Revert to type. – I know about sportsbooks, let’s grow that. I’ll look good. I can do that sh1t. Feck me, look at the cash pile this company has, how many naff adverts can I get on Sky Sports for that?

5 – Hope to hell I can get a new job before they realise the Emperor isn’t wearing new clothes.

Talented, yeah right!

Here today, gone in three years.

Any takers at evens?
Report frog2 September 9, 2013 10:04 AM BST
But let’s face facts, Paddy were only ever a sideline player with larger ambitions, something that hasn’t changed. They are still a sideline player with larger ambitions.

They never challenged the big boys, they never even challenged the new big boys.




So who are 'the big boys' for online sportsbooks? Appart from 365 who is bigger ?(forget the online games and other rubbish). Looking at the last annual reports...

PP had £250 net revenue from its online sportsbook. (About the same as the betfair exchange.)

Hills £166.7m

Lads had £77.8m
Report Compensation Year September 9, 2013 10:09 AM BST
Spot on unemployable - at least there is someone on here who knows what goes on in the real world. I can't believe how often some very shrewd people on here ignore the human element with these things and treat many of these CE's as if they were god.

No takers here at evens I'm afraid - would require much better odds than that.
Report frog2 September 9, 2013 10:10 AM BST
*£250m pp sb revenue 2012.

Hill market cap £3.48bn
PP market cap £2.46bn (for less FOBTs arcades than hills/lads?)
Lads market cap £1.78bn
Report ballabriggs September 9, 2013 10:20 AM BST
I would be a layer at 10.0 of the CEO still being at BF on the 9/9/2016.  BF has over recent years had constant short term fixes, sticking plasters, or shiny fools gold like LMAX - promising the GROWTH GROWTH GROWTH lust which entices people to buy the shares, but continually failing to deliver.  The sportsbook in the short term cherry picks the stupidest customers, at what on the surface seems like a juicy margin for BF.  But a lot of that money would have been recycled, and by creaming off the stupid players, it suffocates the rest of the food chain gently.  People don't stop betting on BF overnight, but over time and with poorer value, the effect of the sportsbook will be to increase BF's churn rate.  Shareholders look at current/most recent profits etc, where each selling of the family silver provides cash boosts.  But in the long run, the exchange will eventually face commercial pressures, and the foundations look like they're made of quicksand.
Report CLYDEBANK29 September 9, 2013 10:22 AM BST
Personally don't think Betfair should abandon the sportsbook, but they should re brand it, clearly distinguishing it from the exchange, but still linking it to the exchange.  It's dragging the exchange and the Betfair brand down as it is.
Report CLYDEBANK29 September 9, 2013 10:27 AM BST
If at the end of the day the sportsbook is rubbish and can't stand on it's own two feet even with the advantage of being linked with Betfair, then ditch it.  But surely a fool can see if you inextricably link a poor product with a good one, all you do is damage the good one.
Report ballabriggs September 9, 2013 10:31 AM BST
The effective rate of commission on the sportsbook should be around 17% (e.g. 5/6 the pair on heads and tails two runner events).  BF should merge the sportsbook and exchange, leaving crack trading team liquidity up across many markets including ones which are very quiet/have no liquidity at the moment.  Then they should change their pricing system, so that new/initial mugs get hammered with 17% etc, but that rate comes right down very quickly for everyone who has post-2001 style betting (higher turnover, lower margin than the pre-millennium days).  The only real reason the sportsbook and the exchange are separate is because BF want to cream off the easy quick money/sell the family silver, but if they sorted their pricing out, they wouldn't need to do this.  As it is the current sportsbook is a farce.
Report CLYDEBANK29 September 9, 2013 10:44 AM BST
This is the only betting firm in the entire industry that is partly protected from competition because it's core product, the exchange, is a natural monopoly, yet it has stagnated over the last 5 years, when it's competitors have grown, despite them facing head on competition.  Yes it has churn, but so does every other bookmaker.  It's a shambles really from a company that has lost it's identity.
Report CLYDEBANK29 September 9, 2013 10:48 AM BST
When you also consider the rate at which technology and mobile betting has increased too.  Betfair was meant to be at the forefront of technology and should have been the one best placed to take advantage of it.
Report frog2 September 9, 2013 10:48 AM BST
The sportsbook here has volume rising but margin dropping according to the latest 3 months figures. We dont know what the margin is. It is also unclear whether the new revenue has all the bonuses taken off.

Margins elsewhere in the recreational market (is that who betfair is competing with?) range from over 6%-10% (pp at the top end) which is a massive hold. Those firm must heavily rely on mean prices and restricted accounts to keep those margins.

In the professional market the investor's link shows and article reporting IBC worked to 0.67% margin in 2011. Offering agents commission and 102/103% books that seems reasonable. Volume is massive a result.

The question is what kind of sportsbook is Breon Corcoran trying to create here? A low margin high volume model which would fit nicely with the betfair brand or a high margin pp clone?

At the moment it looks like a clone. Prices are mean and restrictions are widespread. Evidence so far suggests he is going for the get rich quick option looking for high margin on a smaller turnover.

But then he suggested in a video that they were looking to add 'best execution' to the sportsbook. i.e. if you could get a better price on the exchange you would get a better price on the SB. Quite how much commission they would take and how this would work with the PC is anyones guess.

I cannot see how this could be added now anyway. Its too little too late for the SB. They have taken over the front page for something that adds a tiny percent of revenue BEFORE they had USP features ready. New customers are flooding to Betfair following the adverts to be met with a sportsbook whose features are not yet ready. If they have a substandard experience now they will not be back later once the improvements are in place.
Report YOMOMMA September 9, 2013 10:56 AM BST
CAN EVERYONE STOP WHINGING AND GO BET ELSEWHERE OR IF YOU CAN'T GO GET A JOB.
Report CLYDEBANK29 September 9, 2013 11:00 AM BST
I suspect volume is massive at IBC because it's tapping into a network of Asian customers.  I also suspect it's not business available to the west.  Volume is massive on Hong Kong racing too, despite huge margins.  If exchange betting was ever to take off legally over there I also suspect that would also be the end of Betfair.
Report Templeton Peck September 9, 2013 11:10 AM BST
Following the Q1 update, I was interested to know the figures - in particular active customers - broken down into sportsbook and exchange.  It appeared to me there was a massive fall in exchange customers (large part owing to Euro 2012 and pulling out of unregulated countries).

An analyst asked Breon this question and Breon did not want to say.  I'm not sure what you can take from this, but Breon seemed a little peeved at being asked. 

This is the conference call: the question I wanted asking was asked at 4.10 mins.

http://corporate.betfair.com/investor-relations/q1-fy14-ims-analyst-conference-call.aspx
Report frog2 September 9, 2013 11:16 AM BST
Did he give more detail at the half year as promised?
Report Templeton Peck September 9, 2013 11:19 AM BST
The half year report is in December. This was the conference call from last week.

He mentions pricing and that they're continuing to get feedback from conversations with customers.  It's too early to extrapolate from the trials that have been taking place in various countries/markets.

Otherwise, not a lot of info from the call.
Report frog2 September 9, 2013 11:37 AM BST
The annual report shows exchange revenues down 1% but volume of bets matched up 8% to £52bn for the year.

The added volume could be due to people using the cash out feature.

But it also could be due to a general increase in trading activity and a decrease in outright betting activity. If this is the case it suggests people are keeping things they can only do on Betfair here (in play trading etc) and moving this they can elsewhere.

It certainly would make sense with the PC in place.
Report ballabriggs September 9, 2013 11:42 AM BST
"Evidence so far suggests he is going for the get rich quick option looking for high margin on a smaller turnover."

Tbh if any of us were him, it makes sense to derive sportsbook prices from the exchange, direct fish there, and cream off profits.  Why should he care about the damage to the BF brand?  If any of us owned BF, we would probably sack someone who was doing what is being done, but if we were actually the CEO ourselves, we would probably do exactly what is being done.  Customer service, brand value, churn rates, they are all being asphyxiated, but short term sticking plasters and fizzy bursts to growth are exactly what he should be doing in his own interests. 

CLYDEBANK29's point about how BF should be at the cutting edge is profound.  Imagine if BF had had any real competition.

Btw, the next logical step for BF is to close this forum too.  PP/365 etc don't have one, and there is pretty much nobody left with a single good word to say about BF anymore.
Report ballabriggs September 9, 2013 11:48 AM BST
If BF was competitive on price CLYDEBANK29, the heavy volume at IBC would start spilling over onto here.  Someone would arbitrage heavily between the markets.
Report chrisblues September 9, 2013 5:43 PM BST
competitive on price

drop the pc
Report chrisblues September 9, 2013 5:44 PM BST
as trillions of missing bets are elsewhere 
five years on
Report chrisblues September 9, 2013 5:48 PM BST
heavy volume    makes bf the best in world   

with   technology and mobile betting

greeed killed it

drop the pc
Report ann witt September 9, 2013 6:30 PM BST
Surely the sportsbook is all about getting back into foreign markets the exchange was banned from and where they already have a group of customers they can call on. On the UK front, where punters still have the choice of the exchange, the type of customers that would use the sportsbook have probably already been mugged on the exchange and wouldn't touch betfair with a barge pole.
Report TheVis September 9, 2013 6:38 PM BST
At least the sportsbook has a better interface than the Exchange....apart from the colour scheme.
Report Coachbuster September 9, 2013 10:01 PM BST
using a friends computer today i saw the lay out for the first time .


I needed a sat nav to find the exchange Shocked
Report Just Checking October 22, 2013 8:08 PM BST
Just noticed today the title page for their website is
"Online Betting - Sportsbook and Exchange"  .. in that order. Shows their priorities again I think Sad
Report Coachbuster October 31, 2013 3:54 PM GMT
just been looking at the sportsbook while some Bulgarian game has been in progress


my thinking -

the odds were stingy ,but not ridiculously out of line with the exchange esp once you take into account the commission .

BF also of course,

have the option to be more generous with the odds esp pre kick off .

As the exchange markets wilter ,esp the above markets ,punters will use the book as it will be the only means of doing so .Cry

This will eventually lead to the attrition of more major markets .

general talk of a commission as high as 60% on the exchange may well scare punters too thinking it may apply to newbies .

The other factor not mentioned is the appearance of both sites .

The sportsbook is of pleasant appearance ,nice colors ,easy on the eye ,easy to navigate and easy to place bets .

You can't say anything good about the new exchange imo .

How many new punters will know of the old exchange ?

I think the exchange is on borrowed time personally . Sad
Report Coachbuster October 31, 2013 4:02 PM GMT
looking also at the in play Federer /Kolschreiber  game in the tennis , the odds compared with 365 is comparable   

maybe more to research , but the odds don't seem as bad as say 2 months ago

Just beware of BF doing free £50 random bets
Report Tom October 31, 2013 5:13 PM GMT
Coachbuster, the biggest problem is that Betfair universally banned/restricted all accounts that had done anything on the exchange. Very few can actually place bets on the sportsbook..
Report Coachbuster October 31, 2013 5:22 PM GMT
I'm guessing Tom that may may have been shrewies ,in which case BF still won't want since it is still possible(albeit very difficult) to arb

BF simply want B365s customers - hence all these 'cash out' adverts

anything they consider innovative is what theyre looking at now

as far as theyre concerned the exchange may as well curl up and die
Report viva el presidente! November 3, 2013 1:15 AM GMT
coach, my feeling is different to yours.

firstly, the prices I've seen on the book for FGS markets are terrible, compared both to other books and the exchange, even allowing for commission.

secondly, I'm actually struck by how resilient the exchange is. given everything they've done to degrade it, the fact it's still so big suggests to me that they've actually got something that, if they run it even half right, would be very profitable with zero advertising.

thirdly, I'd like to know the specifics of how they measure sportsbook activity. Eg: they gave me a free £10 acca. does the fact that I used it make me an "active sportsbook customer", even though I've never risked any of my own money on there. and does the, ahem, 280 quid my mega-shrood fivefold paid count as a 280 loss against the book, against general marketing costs or specifically against the exchange's marketing budget?

if I was an analyst trying to parse BF's results, I'd really want to know that kind of detail. because the quarterly numbers already don't look great, and if they look worse when you strip that stuff out... well, it ain't good.
Report Coachbuster November 3, 2013 6:40 PM GMT
Viva -i need to have an in depth look at the markets - so far as the popular markets are concerned ,the prices were very comparible to B365 (which is nothing to shout about i know ,but they are BFs potential rivals and very successful to boot)
The exchange is resilient  and does have a cult following ,except this cult following is becoming more concentrated with professional players - so a stagnation ,then strangulation finally awaits .   

Measurement of the sportsbook probably does include the free bet players ,and while rsults now may not look good  the advantage BF have is being able to turn the exchange on and off like a tap ,knowing die harders will ALWAYS return .

I think they have a good plan in fairness ,they need better advertising and also someone to keep the Sportsbook odds favourible .

I can't see the exchange going for too much longer   - also ,no other bugger seems interested in the concept Sad
Report Coachbuster November 3, 2013 6:41 PM GMT
I very much hope i'm wrong .
Report henok November 3, 2013 6:51 PM GMT
you are very pessimistic about the exchange Laugh. i think the exchange concept is here to stay. this is simply because it is the only gambling system that can offer better value for gamblers efficiently. and there would always be gamblers who will be looking for valueWink. it simply needs better management from stake holders. if betfair fail there would be someone who would pick from where betfair fail.
Report Coachbuster November 3, 2013 8:40 PM GMT
Henok Grin

I guess the exchange will always be somewhere wilting  in the background  Laugh  maybe in the hope the exchange will be allowed back in those banned territories  ,but they will be stomping ahead with this Sportsbook now surely- they are after those B365 millions
Report viva el presidente! November 5, 2013 3:27 PM GMT
coach - according to my understanding of the last set of quarterlies, YOY growth in exchange revenues equalled approximately 1% of total group revenues - the vast majority of which still came from the exchange.

given what they've thrown at the sportsbook, and what they've given up in the process, I'd say if anything was under threat it's not the exchange. apart from anything, a lot of the activity there is basically wholesale.
Report Coachbuster November 5, 2013 5:47 PM GMT
revenues is a tough one to call since there is huge money on the exchange -but i know you realise that most of this volume is from a limited number of heavyweight players .

the sportsbook on the other hand is they hope going to find an upward curve with an increase of bit part players -they haven't done anything so far like free bets on big games etc ,and certainly need to be more generous with the odds , i would have said most companies are going to feel the pinch in relative terms .Advertising is the key to a healthy betting outfit .

B36-5 won't stay huge forever of course  ,but they know how to draw in the players - BFs ad's are lame by comparison .
Report Coachbuster November 5, 2013 5:48 PM GMT
is,they hope
Report Coachbuster November 5, 2013 5:49 PM GMT
i'm clearly no expert ,but i'm trying to see this from a laymans angle and not a pro punter
Report viva el presidente! November 5, 2013 6:00 PM GMT
.Advertising is the key to a healthy betting outfit .

-----------

Virtually all their advertising has been thrown at the sportsbook for a while now, which is what makes the actual absolute revenue figures from it so unimpressive. Even advertising that was based on the exchange (the now seemingly defunct "is your bookie giving you value?" campaign) was actually only using figures from the exchange to drive sportsbook traffic, as it coincided with them making the sportsbook the default landing page for new customers.
Report Coachbuster November 5, 2013 11:10 PM GMT
i should have said effective advertising  Wink
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