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With BF plugging the sportsbook now and neglecting the exchange, what do you think will be the long term ramifications?
Could BF shut down the exchange and run the sportsbook alone?
The PC must catch up with most people eventually, especially the position takers. I wonder if they are many pure position takers able to overcome the PC? I'm sure there are a few but the losing runs without a rebate is a killer.
And do you think other exchanges will ever be able to overtake BF? I suppose if BF did shut down the exchange, the other exchanges would just pick up tons of liquidity.
I think BF will probably eventually start outright banning people who are saavy enough to overcome the higher PC rates. BF clearly don't want these customers so have made their lives as difficult as possible and put most of them out of business already. They probably don't have the balls to outright ban winners yet but I wouldn't be surprised if they did. At the end of the day, winners are still extracting money from the exchange, even if they are giving back 40-60%.
Or am I wrong about this??
Could BF shut down the exchange and run the sportsbook alone?
The PC must catch up with most people eventually, especially the position takers. I wonder if they are many pure position takers able to overcome the PC? I'm sure there are a few but the losing runs without a rebate is a killer.
And do you think other exchanges will ever be able to overtake BF? I suppose if BF did shut down the exchange, the other exchanges would just pick up tons of liquidity.
I think BF will probably eventually start outright banning people who are saavy enough to overcome the higher PC rates. BF clearly don't want these customers so have made their lives as difficult as possible and put most of them out of business already. They probably don't have the balls to outright ban winners yet but I wouldn't be surprised if they did. At the end of the day, winners are still extracting money from the exchange, even if they are giving back 40-60%.
Or am I wrong about this??
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With BF plugging the sportsbook now and neglecting the exchange, what do you think will be the long term ramifications?
They are not neglecting the exchange
Could BF shut down the exchange and run the sportsbook alone?
About as much chance as an ice cream in a desert.
The PC must catch up with most people eventually, especially the position takers. I wonder if they are many pure position takers able to overcome the PC? I'm sure there are a few but the losing runs without a rebate is a killer.
It won't catch up with most people eventually, just a small percentage of new people. I doubt there are many pure position takers, just people who tend towards position taking. The losing runs without a rebate will be a killer and these people will have already adapted.
And do you think other exchanges will ever be able to overtake BF? I suppose if BF did shut down the exchange, the other exchanges would just pick up tons of liquidity.
That exchanges, as they operate now, and under current worldwide regulations, will remain in Betfair's control is a given.
Exchanges would have to operate in a different way or the Far East would need to open up to challenge that. I can't even begin to think of another way.
I think BF will probably eventually start outright banning people who are saavy enough to overcome the higher PC rates.
I don't
BF clearly don't want these customers so have made their lives as difficult as possible and put most of them out of business already.
They clearly do want these customers, but they want the higher rate PC more.
They probably don't have the balls to outright ban winners yet but I wouldn't be surprised if they did. At the end of the day, winners are still extracting money from the exchange, even if they are giving back 40-60%.
Or am I wrong about this??
You are wrong about this
They are not neglecting the exchange
Could BF shut down the exchange and run the sportsbook alone?
About as much chance as an ice cream in a desert.
The PC must catch up with most people eventually, especially the position takers. I wonder if they are many pure position takers able to overcome the PC? I'm sure there are a few but the losing runs without a rebate is a killer.
It won't catch up with most people eventually, just a small percentage of new people. I doubt there are many pure position takers, just people who tend towards position taking. The losing runs without a rebate will be a killer and these people will have already adapted.
And do you think other exchanges will ever be able to overtake BF? I suppose if BF did shut down the exchange, the other exchanges would just pick up tons of liquidity.
That exchanges, as they operate now, and under current worldwide regulations, will remain in Betfair's control is a given.
Exchanges would have to operate in a different way or the Far East would need to open up to challenge that. I can't even begin to think of another way.
I think BF will probably eventually start outright banning people who are saavy enough to overcome the higher PC rates.
I don't
BF clearly don't want these customers so have made their lives as difficult as possible and put most of them out of business already.
They clearly do want these customers, but they want the higher rate PC more.
They probably don't have the balls to outright ban winners yet but I wouldn't be surprised if they did. At the end of the day, winners are still extracting money from the exchange, even if they are giving back 40-60%.
Or am I wrong about this??
You are wrong about this
The 2014 Annual Report makes interesting reading.
The sportsbook is seen as a way to get recreational players onto Betfair. Things like Price Rush and Cash Out are designed to link liquidity. I think its more of a gimmick/selling point and will never add significant amounts of liquidity.
The sportsbook had everything thrown at it in the last 12 months. Revenue up by £12m to £36m. How much they have spent to get that extra £12m revenue is anybodies guess. I would think its certainly in the 10s of millions in advertising, product development and management time.
I think they still believe in the exchange. It brings in most of the revenue. They have just launched an Italian exchange to go along side the sportsbook there. Why do that if you do not believe in the exchange.
Profits are way up due to cost cutting. This is a once only change. Next year there will be an extra £36m in taxes (mainly UK) to come off the £60m profits.
North of £100m spent on marketting still seems crazy. In countries they stopped marketting casino revenues fell rapidly but exchange revenue held up. Almost £2bn was matched on the IPL. You have to think how much of that was from the grey market.
Making the company public has had a terrible effect. Look at the Annual Report. There is a few pages on the actual betting business and then dozens of pages on compliance. If they were private they could concentrate more on the exchange, more in grey markets and cut marketing spend and further reduce the head count.
As a public company they are focusing on higher tax regulated markets and looking for recreational punters. These punters are not as loyal as exchange punters and cost far more to get and retain. Will they ever make a profit out of them?
Things change and evolve. The PC certainly stopped exchange growth but is now a drug the firm needs as a revenue boost. Its too risky to cut it and see how much growth they get. I cannot see it happening now. It just means bets have to be spread about more. Instead of Betfair for everything just use Betfair where you can use nowhere else.
The sportsbook is seen as a way to get recreational players onto Betfair. Things like Price Rush and Cash Out are designed to link liquidity. I think its more of a gimmick/selling point and will never add significant amounts of liquidity.
The sportsbook had everything thrown at it in the last 12 months. Revenue up by £12m to £36m. How much they have spent to get that extra £12m revenue is anybodies guess. I would think its certainly in the 10s of millions in advertising, product development and management time.
I think they still believe in the exchange. It brings in most of the revenue. They have just launched an Italian exchange to go along side the sportsbook there. Why do that if you do not believe in the exchange.
Profits are way up due to cost cutting. This is a once only change. Next year there will be an extra £36m in taxes (mainly UK) to come off the £60m profits.
North of £100m spent on marketting still seems crazy. In countries they stopped marketting casino revenues fell rapidly but exchange revenue held up. Almost £2bn was matched on the IPL. You have to think how much of that was from the grey market.
Making the company public has had a terrible effect. Look at the Annual Report. There is a few pages on the actual betting business and then dozens of pages on compliance. If they were private they could concentrate more on the exchange, more in grey markets and cut marketing spend and further reduce the head count.
As a public company they are focusing on higher tax regulated markets and looking for recreational punters. These punters are not as loyal as exchange punters and cost far more to get and retain. Will they ever make a profit out of them?
Things change and evolve. The PC certainly stopped exchange growth but is now a drug the firm needs as a revenue boost. Its too risky to cut it and see how much growth they get. I cannot see it happening now. It just means bets have to be spread about more. Instead of Betfair for everything just use Betfair where you can use nowhere else.
They probably don't have the balls to outright ban winners yet but I wouldn't be surprised if they did. At the end of the day, winners are still extracting money from the exchange, even if they are giving back 40-60%.
The model of an exchange is the same as on-line poker. Users put money in and for every person that wins, there are losers.
The operator then takes piece of the pie.
This happened from the very first settlement of the very first market.
So, yes, "winners are still extracting money fro the exchange".
Without this, no 'exchange' would exist.
The model of an exchange is the same as on-line poker. Users put money in and for every person that wins, there are losers.
The operator then takes piece of the pie.
This happened from the very first settlement of the very first market.
So, yes, "winners are still extracting money fro the exchange".
Without this, no 'exchange' would exist.
There's no doubt they lose business because they don't rebate premium charge payments when you go on losing runs, because they lose / have lost some of mine for a start and I don't see why I should be a lot different from many other people. They are still getting a minimum 22%/42%/52% of your winnings even if they do, so I don't really understand why they don't do something. The lack of rebates, rather than the charge itself, has a bigger effect on my betting here, although both effect my betting.
They can limit rebates to a period of 6 months or a year, which would be an incentive, for those that are thinking of quitting, or those just betting less generally here because of it, to keep betting. Their rugby premium charge promotion fiasco does point towards a luck of understanding of the charge from within.
They can limit rebates to a period of 6 months or a year, which would be an incentive, for those that are thinking of quitting, or those just betting less generally here because of it, to keep betting. Their rugby premium charge promotion fiasco does point towards a luck of understanding of the charge from within.
It would be better for us if the exchange was being run separately/promoted separately from the sportsbook. Either with new ownership or a separate CEO for the exchange.
One reason many still do not use the exchanges is that they don't know how to or perhaps cannot be bothered to. Now betfair have come up with the idea that those who can access the exchange would like to instead use a sportsbook. They seem to think that somehow they wont notice the glaring difference in value. Kind of like Ladbrokes putting Betfair access in every shop because hey no one will bother anyway to use it
Betfair isn't really an exchange. A high amount of the bets layed are layed by their own bots.
Bookmakers including Betfair love to lay at low prices, back at higher prices on the Exchanges to fix profits so it is unlikely to disappear.
Imagine the Betfair Sportsbook prices if they could not back on the Exchange!!!!!
An even money shot is regularly about 4/6 on the Sportsbook and can only see this being around 1/2 if the Exchange did not exist.
Imagine the Betfair Sportsbook prices if they could not back on the Exchange!!!!!
An even money shot is regularly about 4/6 on the Sportsbook and can only see this being around 1/2 if the Exchange did not exist.
Frog2, last paragraph notwithstanding, I think that might be the best post I have read on here. Or at least the post closest to my own thinking.
Only thing I might add is on loyalty. I don't think customers are especially loyal, I think they just know where the best product and most commonly best prices are. If you're recreational and likely to be interested in one wallet, there's only really one option. I guess you might go elsewhere if you fall under the BF staff betting policy, not sure who else would.
Only thing I might add is on loyalty. I don't think customers are especially loyal, I think they just know where the best product and most commonly best prices are. If you're recreational and likely to be interested in one wallet, there's only really one option. I guess you might go elsewhere if you fall under the BF staff betting policy, not sure who else would.
Westender, I think it happens a lot less now than you think. When bookies see the BF account every year is losing money but the overall strategy is profitable, the fallacy of hedging becomes really prominent.
CoinFlip 22 Jul 14 14:24 Joined: 11 Nov 10 | Topic/replies: 157 | Blogger: CoinFlip's blog
Westender, I think it happens a lot less now than you think. When bookies see the BF account every year is losing money but the overall strategy is profitable, the fallacy of hedging becomes really prominent.
Except for the fact that bookmakers are overly concerned with stable income, and happy to take this hit to reduce variance, especially if they are a public company.
Westender, I think it happens a lot less now than you think. When bookies see the BF account every year is losing money but the overall strategy is profitable, the fallacy of hedging becomes really prominent.
Except for the fact that bookmakers are overly concerned with stable income, and happy to take this hit to reduce variance, especially if they are a public company.
CLYDEBANK29 19 Jul 14 12:30 Joined: 10 Jan 02 | Topic/replies: 4,641 | Blogger: CLYDEBANK29's blog
There's no doubt they lose business because they don't rebate premium charge payments when you go on losing runs, because they lose / have lost some of mine for a start and I don't see why I should be a lot different from many other people. They are still getting a minimum 22%/42%/52% of your winnings even if they do, so I don't really understand why they don't do something. The lack of rebates, rather than the charge itself, has a bigger effect on my betting here, although both effect my betting.
They can limit rebates to a period of 6 months or a year, which would be an incentive, for those that are thinking of quitting, or those just betting less generally here because of it, to keep betting. Their rugby premium charge promotion fiasco does point towards a luck of understanding of the charge from within.
The argument from Betfair against rebates was that it leaves them open to abuse. That seems a fairly minor issue to me though, as people that would attempt such abuse, would likely do it before they paid PC in the first place.
I think another reason Betfair haven't introduced rebates is that it would complicate matters for them if profits flowing from PC payments could simply vanish in future.
One kind of 'halfway measure' would be for Betfair to introduce retained PC, like we already have retained commission. When a PC payment is due, it is retained for a set period of time (6 months or 12 months etc.). If during this time the customer loses and/or pays lots of commission, all or some of the retained PC is simply wiped. If not it is settled after the set time.
This would cost Betfair though, so I think it won't happen. There are a growing number of customers who have won a lot in the past and have seen their edge eroded.
There's no doubt they lose business because they don't rebate premium charge payments when you go on losing runs, because they lose / have lost some of mine for a start and I don't see why I should be a lot different from many other people. They are still getting a minimum 22%/42%/52% of your winnings even if they do, so I don't really understand why they don't do something. The lack of rebates, rather than the charge itself, has a bigger effect on my betting here, although both effect my betting.
They can limit rebates to a period of 6 months or a year, which would be an incentive, for those that are thinking of quitting, or those just betting less generally here because of it, to keep betting. Their rugby premium charge promotion fiasco does point towards a luck of understanding of the charge from within.
The argument from Betfair against rebates was that it leaves them open to abuse. That seems a fairly minor issue to me though, as people that would attempt such abuse, would likely do it before they paid PC in the first place.
I think another reason Betfair haven't introduced rebates is that it would complicate matters for them if profits flowing from PC payments could simply vanish in future.
One kind of 'halfway measure' would be for Betfair to introduce retained PC, like we already have retained commission. When a PC payment is due, it is retained for a set period of time (6 months or 12 months etc.). If during this time the customer loses and/or pays lots of commission, all or some of the retained PC is simply wiped. If not it is settled after the set time.
This would cost Betfair though, so I think it won't happen. There are a growing number of customers who have won a lot in the past and have seen their edge eroded.
The promotion of a betting exchange can only be done to a certain point.
Anyone who walks within the financial district of London knows about them.
Betfair's marketing has swung to their sports book as the first port of call for new customers.
And innovations (cash out, cash out on multiples) do have the option of incorporating the exchange to give them the edge over the competition.
And a lot of the innovations and improvements that go on that create efficiency, we don't see anyways but do benefit from a user experience angle.
Right now, the ebb and flow of the exchange is at a point where I can't see changes in the commissions, etc.
Will there be a day with 'rebates' or bonuses for those paying PC or is it simply now a business cost that one has to pay? I believe it is the latter.
Will the exchange grow further? Betfair did the right thing by pulling out of several countries where they were paying levies for little return. It is smart and in the future can return to the bargaining table.
Anyone who walks within the financial district of London knows about them.
Betfair's marketing has swung to their sports book as the first port of call for new customers.
And innovations (cash out, cash out on multiples) do have the option of incorporating the exchange to give them the edge over the competition.
And a lot of the innovations and improvements that go on that create efficiency, we don't see anyways but do benefit from a user experience angle.
Right now, the ebb and flow of the exchange is at a point where I can't see changes in the commissions, etc.
Will there be a day with 'rebates' or bonuses for those paying PC or is it simply now a business cost that one has to pay? I believe it is the latter.
Will the exchange grow further? Betfair did the right thing by pulling out of several countries where they were paying levies for little return. It is smart and in the future can return to the bargaining table.
I don't actually have any problem with the concept of the premium charge other than the fact that it could compromise bf's integrity because players with a very big edge are far more likely to be involved in dubious practices and bf profits from this.
I have sympathy for anyone who earned a lot when things were easier on the exchange and now with tougher markets haven't got the same edge. I think that the charge should only have been based on profits after its introduction and not the lifetime of the account.
My edge is very small and I was about 10k down at one point and got that up to 400 up earlier this year but then went on a downswing, so I doubt I will ever pay it even if I get over the 8k profit mark.
I have sympathy for anyone who earned a lot when things were easier on the exchange and now with tougher markets haven't got the same edge. I think that the charge should only have been based on profits after its introduction and not the lifetime of the account.
My edge is very small and I was about 10k down at one point and got that up to 400 up earlier this year but then went on a downswing, so I doubt I will ever pay it even if I get over the 8k profit mark.
With BF plugging the sportsbook now and neglecting the exchange
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Bizarre to post this a week after a world cup that saw the most innovation to the exchange for many years.
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Bizarre to post this a week after a world cup that saw the most innovation to the exchange for many years.
Jul 23, 2014 -- 9:47PM, TheInvestor2 wrote:
CoinFlip 22 Jul 14 14:24 Joined: 11 Nov 10 | Topic/replies: 157 | Blogger: CoinFlip's blogWestender, I think it happens a lot less now than you think. When bookies see the BF account every year is losing money but the overall strategy is profitable, the fallacy of hedging becomes really prominent.Except for the fact that bookmakers are overly concerned with stable income, and happy to take this hit to reduce variance, especially if they are a public company.
I would contest that as a fact. The emphasis is more than it should be but is reducing every year. The best way to reduce your swings is to diversify products and FOBTs/casino products do that very nicely.
Their headroom (capacity for expansion in the key UK market) is much more limited than it was seven or eight years ago. They can't market 'best prices' as a feature of the exchange to recreational clients, because 1) it's proven that this isn't the draw; casual punters prefer cashback on unlikely eventualities, price boosts and bonuses to trivial stakes, and 2) they don't offer best prices on anything but horses that are more likely than not to run badly.
The advertising spend directed at casual players tempting them to sportsbook looks short-sighted and is hopefully a crazy one-off. For an internet-only bookie there is little customer loyalty in this market, except for proven losers with something like .65. My feeling is that lasting growth wd have to come from exploitation of grey markets and from going back to the spirit of the old days and ruffling a few feathers. FO books do not allow you to win, but the casual player doesn't always know this. Rub it in with a stinging, witty ad campaign targeting e.g. a cartoon figure called Large Denise and you might begin to build some customer identification among people for whom bf is now too clever-clever and not worth bothering with.
The advertising spend directed at casual players tempting them to sportsbook looks short-sighted and is hopefully a crazy one-off. For an internet-only bookie there is little customer loyalty in this market, except for proven losers with something like .65. My feeling is that lasting growth wd have to come from exploitation of grey markets and from going back to the spirit of the old days and ruffling a few feathers. FO books do not allow you to win, but the casual player doesn't always know this. Rub it in with a stinging, witty ad campaign targeting e.g. a cartoon figure called Large Denise and you might begin to build some customer identification among people for whom bf is now too clever-clever and not worth bothering with.
A point today which has a bit of relevance to the last few posts.
An ad for "price rush" came on Ch4 today at approx 3.52/3.53 concerning Telescope in the King George with the price offered at 9/4,(at least 3.9 and shortly after 4.2 was available on the exchange).Telescope was returned at 5/2,not quite sure i understand the point of the ad particulary given to the close proximity of the race (3.55). Maybe there are advantages in regards bog,stewards etc with the sportsbook but today was a shocking example of how the "customer" would have been way worse off if Telescope prevailed. Surely the point of any company is to do their best for the clientele and have my doubts they are doing this on the basis of that advertising today.
An ad for "price rush" came on Ch4 today at approx 3.52/3.53 concerning Telescope in the King George with the price offered at 9/4,(at least 3.9 and shortly after 4.2 was available on the exchange).Telescope was returned at 5/2,not quite sure i understand the point of the ad particulary given to the close proximity of the race (3.55). Maybe there are advantages in regards bog,stewards etc with the sportsbook but today was a shocking example of how the "customer" would have been way worse off if Telescope prevailed. Surely the point of any company is to do their best for the clientele and have my doubts they are doing this on the basis of that advertising today.
The ads by all bookmakers follows the 'headline' horse, player, etc. So the value is likely to be skinny.
An alternative would be a race where there is an ew scenario, even with a big field, where it is 5/1 upwards.
"Taking in the fave?" is the question that puts the idea in the armchair punters.
Then, a list of the next five in the betting with the betfair prices which, if all based on the exchange, should show 15% or better but, more importantly, the numbers would 'look' more impressive in presentation.
An alternative would be a race where there is an ew scenario, even with a big field, where it is 5/1 upwards.
"Taking in the fave?" is the question that puts the idea in the armchair punters.
Then, a list of the next five in the betting with the betfair prices which, if all based on the exchange, should show 15% or better but, more importantly, the numbers would 'look' more impressive in presentation.
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