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NO LIQUIDITY ON BETFAIR

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Replies: 241
By:
zooot
When: 03 Jun 16 13:21
Betfair was never easy.  It used to be a lot easier though and people could hit certain edges hard and clean up for a year or two before the market adjusted.  A key change is that now it has been around a while the word is out that it is not a magic money maker, just a hard slog.  Like an old tired pyramid scheme or other get rich quick scheme, the thrill of the "new" and "maybe this is IT" is gone so it is attracting fewer people creating a feedback loop making it less attractive and with less mainstream in appeal.
It will be around in some form for a long time but can't see major growth again unless it got into say China or the USA
By:
Getafix
When: 04 Jun 16 09:14
The betting exchange concept is far superior to the bookie overround model.  Betfair (exchange) are failing due to greed.  The Premium Charges mean the dreams of winning long term are no longer there, as it becomes infinitely more difficult. BTW, the PC charge is not part of the exchange model, it was introduced many years after betfair performing extremely well.  A decent exchange is what betfair was in the early days, where commission was the only fee and this could be reduced by "playing" more.  This meant tight markets which the bookies couldn't compete with as trading was promoted with low commissions.  Liquidity begets liquidity.  Take away the option to trade and it makes it difficult for the traditional sole backer / layer to get bets on.  This in turn leads to wider spreads etc etc... Traditional sole backers / layers are what make this site work.  They are not going to be interested in betting on betfair if they have to wait 10 minutes before a race to get a decent sized bet on. The bookies will be more than happy to accommodate!

Other factors beside PC include:

1) New users being redirected to the sportsbook.  I'd have thought with paddy power merger that the bf sportsbook would have disappeared (what is its point if they have pp for the bookie side?). 
2) Lack of marketing.
3) Company goodwill obliteration - In the early days I would tell all my friends to use betfair due to much better odds.  I no longer do this.  I feel the distrust over the years has caused word of mouth advertising to virtually disappear.  A friend recently told me they got odds 10 on some eventuality but I was thinking they should have got odds 25 ish.  They said "I used betfair like you always used to tell me to, so I should have got good odds!?" (they don't bet often), it turns out they bet on the sportsbook, not knowing the difference.
4) Increased commission rates for foreign territories
5) Pulling out of foreign territories.
etc

I disagree with some of the earlier comments on here.  To me it is pretty obvious that liquidity and volume traded, in an efficient market, move in the SAME direction i.e., they are correlated!  Please prove me wrong.
By:
YOMOMMA
When: 04 Jun 16 10:25
There's no problem with betfair trying to maximise profits but the way they have gone about it has destroyed the exchange and everyone has left. The appeal of betting peer to peer has been lost as it's 80% full of botfair bots. The pricing is also a disgrace.
By:
fixed
When: 04 Jun 16 17:02
100% wrong, of course. loser's speech

exchange is by far the greatest gambling innovation ever, it's here to stay and nobody (relevant) leaves as due to the inherent advantages of this model average prices and volume are and will forever be better than anything offered by other bookies
By:
YOMOMMA
When: 04 Jun 16 17:40
http://www.pinnacle.com/en/promotions/better-than-an-exchange

When you make a basic comparison of Betfair’s odds adjusted for 5% commission on winnings against Pinnacle Sports gross margins it is clear who offers you better value.

Not to mention the so called premium charge.
By:
YOMOMMA
When: 04 Jun 16 17:59
You are also wrong about volumes being better on betfair. I could bet £70,000 on a Euro 2016 football handicap with Pinnacle if I wanted to. That far outweighs betting against a £3 to a few hundred pound botfair bot at lower odds and less value. Also worth noting Betfair don't welcome winners with heavy charges on successful bettors whereas Pinnacle, SBObet and Maxbet do.

Case closed.
By:
YOMOMMA
When: 04 Jun 16 18:14
fixed you do realise the botfair bots trade off and arbitrage against Pinnacle Sports odds don't you???

Botfair would be nothing without the 3 bookmakers I mentioned as the botfair bots would have nowhere to lay off the bets they take. Betfair is not "better than anything offered by the bookies" but is in fact inferior!

For me personally Betfair isn't even the greatest exchange any more but the low margin 2% Smarkets betting exchange is. Betfair is an alright betting company but not the best by a long way.
By:
frog2
When: 05 Jun 16 08:25
As posted earlier in the thread the sole remaining growth area in 2015 was the cricket markets.

This was mainly due to massive increase in volume in the IPL in 2015. From memory it went from £1.5bn in 2014 to £2.5bn traded in 2015. Total cricket was about £10bn which is similar to racing and tennis (both in decline). Football slight more at £15bn.

The average size of each bet for cricket was over £1000 which for exceeds the two figure average bet for most other sports. There were 100 million new internet users in India in 2015 so the only growth on Betfair exchange appears to be coming from there. Its quite strange because to do not think Betfair market there or pay affiliates for referals from there.
By:
CLYDEBANK29
When: 05 Jun 16 10:47
Not surprising they don't pay affiliates for referrals.

"The Information Technology Act 2000 regulates cyber activities in India and prohibits publication or transmission of information that can corrupt people. This includes online gambling and the punishment for such activities is much more serious than for offline gambling operations – the fine is ₹100,000 or imprisonment up to 5 years."
By:
DStyle
When: 05 Jun 16 11:56
it's also worth remembering that t20 or any cricket for that matter, is an excellent sport for in play betting because of the frequent and lengthy amount of dead time. It is one of the very few sports which can be offered unmanaged and there's very little chance of recreational punters being hoovered if they take a small amount of care.

As for the PC, and the super PC, it was a terrible and lazy solution to three real problems, two of which still make the current exchange offering far from ideal and an unappealing prospect for many new entrants.

They are

1. In play hoovering.
2. An unfair commission structure which massively penalises outright bettors against those making numerous derivative bets in the same market.
3. Winners by others means, do cost the exchange money and should be "taxed" according to their cost.

Betfair's mistake was conflating all three activities, and taxing on profit and profit rate alone, while not distinguishing based on behaviour, and doing nothing to address problems of 1 and 2 which affect all users of the exchange AND CONTINUE TO and are detrimental when it comes to attracting new business.
By:
frog2
When: 05 Jun 16 12:33
I agree with all that. Especially the bit about cricket being the perfect market for the exchange. When Betfair started T20 cricket did not exist now it has £5bn plus a year traded on it.

I am not sure about your point Clydebank. Several UK licenced bookmakers take bets from India and pay for referals. According to Alexa (not very reliable I know) India has 13.4% of traffic to Betfair. This is second only to the UK at 37.5%.
By:
CLYDEBANK29
When: 05 Jun 16 13:21
http://sportsbetting.net.in/gambling-laws/
By:
PLEASE TELL THE TRUTH
When: 09 Jun 16 00:35

Jun 5, 2016 -- 2:25AM, frog2 wrote:


As posted earlier in the thread the sole remaining growth area in 2015 was the cricket markets. This was mainly due to massive increase in volume in the IPL in 2015. From memory it went from £1.5bn in 2014 to £2.5bn traded in 2015. Total cricket was about £10bn which is similar to racing and tennis (both in decline). Football slight more at £15bn. The average size of each bet for cricket was over £1000 which for exceeds the two figure average bet for most other sports. There were 100 million new internet users in India in 2015 so the only growth on Betfair exchange appears to be coming from there. Its quite strange because to do not think Betfair market there or pay affiliates for referals from there.


thought betfair is illegal in india Surprised

By:
screaming from beneaththewaves
When: 09 Jun 16 10:11
All betting is illegal in India. That's why it's so huge: no taxes and no administrative or regulatory overheads mean that bookmaker margins can be very tight and turnover explodes.
By:
CLYDEBANK29
When: 09 Jun 16 10:15
Taken from that link I posted....

"Although gambling at their website is technically illegal, to our knowledge no has ever been arrested for gambling in India when their wagers were placed online, with a company located abroad. As far as Bet365 is concerned, Indian laws don’t apply to them as they operate under a legal UK gambling license which they’ve held since 1974. With no servers, advertising or anything else going on in India, the authorities can’t do much to stop Bet365 from servicing Indian punters. This makes it easy for Indians to use an e-wallet and gamble on matches including IPL cricket at sites such as Bet365 and Canbet.

Central Government Actions Against Online Gambling

Although the Central Government has no jurisdiction over UK licensed bookmakers whom operate legally under European and International Law, they have taken some action to make using these sites more difficult. This comes in the form of two laws, neither of which has been highly effective.

Conclusion

At the current time – most gambling in India is illegal. However, legal gambling does exist for horse racing, lottery, and rummy (paplu). There is also a high number of betting sites legal in the UK which service Indians with only minor hassle. The law at this time seems more concerned with scaring Indians not to gamble, than it does much to prevent it. It seems highly likely fully legal gambling will come to India at some point – how far away that is, is anyone’s guess. In the meantime stay tuned to this page where we’ll publish Indian Gambling Law updates as we receive them."

By:
screaming from beneaththewaves
When: 09 Jun 16 10:17
The Indian money on Betfair all comes from less than a dozen Indian bookmakers hedging on here. That's why cricket has the strange rule that all bets are void if a game ends in a tie: that's the rule in India. It means that sometimes Betfair ends up not making a penny on a T20 match, where ties are quite frequent, despite millions having been turned over. But it's worth it, because otherwise the cricket markets on here would be very small fry indeed, as you can see from games which are not televised in India.
By:
screaming from beneaththewaves
When: 09 Jun 16 10:22
Just seen your post, Clydebank. Looks like I should have said that most rather than all of the Indian money on here comes from bookmakers hedging. But I do know that the reason for the rule voiding tied cricket matches came from a consultation with about ten Indian bookies over a decade ago in order to enable their hedging on here.
By:
CLYDEBANK29
When: 09 Jun 16 10:28
I was surprised to read the other day that the population of India is higher than that of Europe and North America combined.  Granted only a very small proportion of that population would have the tools and resources to gamble online, but I imagine if it ever was formally legalised there would be huge potential for someone.
By:
Coachbuster
When: 09 Jun 16 11:49
India  will be the most populated country by 2020
By:
siwaadupa
When: 09 Jun 16 12:12
Britain will be 50% British - 50% others in 2020.
By:
henryluca
When: 09 Jun 16 13:55
100% wrong, of course. loser's speech

Fixed...you are 100 percent correct....

exchange is by far the greatest gambling innovation ever, it's here to stay and nobody (relevant) leaves as due to the inherent advantages of this model average prices and volume are and will forever be better than anything offered by other bookies
By:
siwaadupa
When: 09 Jun 16 14:20
The percentage may be bit exaggeratedSurprised But hey! I may be a looser, but Im not a betfair slave!
By:
Total Bosman
When: 09 Jun 16 16:04
Heard murmurings at least one market they had previously withdrawn from was coming back by next year, anyone know which one(s)?  Might help a bit.
By:
pxb
When: 10 Jun 16 06:57
To me it is pretty obvious that liquidity and volume traded, in an efficient market, move in the SAME direction i.e., they are correlated!  Please prove me wrong.

If an efficient market is implicitly a liquid market and I think it must be, then that statement is a tautology.

Any change in volume is automatically an opposite change in liquidity. You could argue that as interest in a market increases the amounts offered increase faster than bets taken. Thus liquidity increases with volume. But that sounds very unlikely to me.
By:
longbridge
When: 10 Jun 16 11:00
@pxb - all depends what you're comparing with what.  A premiership market is both more liquid than a League Two market and has more matched volume.

However, it is true to say that trivially if you place a matching bet into either market you both increase matched volume and reduce available liquidity.

@Total Bosman - their FAQs say they're applying for a Portuguese licence?
By:
Getafix
When: 11 Jun 16 11:39
Tautology is a good word :)

I agree with your points with regards to snapshots in time i.e., A matched bet will reduce current liquidity i.e., bet is removed from marketplace so cant be taken by anyone else.  Obviously matched volume will then have increased.

When you were referring to the matched volume figures per sport earlier you wrote:
"Those numbers show trading volume, not liquidity. Trading volume and liquidity usually move in opposite directions."

In this context (i.e., historic matched volumes per sport) I fail to understand how this is of relevance?  Perhaps I misread this, but in this context, this is akin to saying "to increase liquidity on betfair we need to reduce the volumes matched", which is blatantly wrong.
By:
Getafix
When: 11 Jun 16 11:45
On a positive note, the latest betfair newletter included this:

Betfair Exchange TV ads

You may have seen the recent Betfair Exchange campaign on TV. The ads have been shown at half time during some high profile fixtures such as the Europa League Final. It’s the first time we have advertised the Exchange in the last three years but we plan to continue to promote it during the Euros and beyond. This is testament to the newly merged company as growing the Exchange is a priority and we are willing to invest to make this happen.
By:
pablo-fanque
When: 11 Jun 16 14:21
It’s the first time we have advertised the Exchange in the last three years

I always thought the PC charge was for the purpose of bringing new players to the exchange and not the sportsbook , as sportsbook players money does not find its way to in-running markets on horse racing . so do we get a 3 year rebate ?
By:
vic
When: 12 Jun 16 11:01
I have fun bets on Euros with Bookies now cos I get stung for 60% if I win on here. What a shambles.
By:
Barton Bank
When: 13 Jun 16 16:38
The shocking lack of money traded on markets such as individual Group winners in the Euros illustrates the decline. Compared to the World Cup two years ago these markets are moribund.
By:
siwaadupa
When: 13 Jun 16 16:42
Pre play on Aegon singles Tennis today, minutes to game to be started and ... 10 000, 5 000 matched on match odds markets. Tennis is the next victim of transformation that Betfair are coming through - bots are creating markets, so its like a sportsbook on exchange. There is no chance of getting a very good price on exchange - we always have industry price or as someone pointed here the pricing is a joke because even if you want to place a bigger bet, the price suddenly moves down(it happens particularly on horse racings), where bots are reacting to customer behavior. So either you accept lower price, or no bet. Being "2nd best" price and getting matched becomes a miracle because of lack of bets, however because its a looser speech, lets say the problems dont exist and Ive just become weaker and looser. P.S There are many ways to motivate customers to bet, or keep them active. Why we dont have a discount for people who have 50 000+ points, or 20 000+ points(Ah sorry we do 0.1% off commission). Why those schemes are not existing? They dont offer extra promotions to those who are regularly active and making a turnover. They are sending me invitation to vip prize draw with chances of winning 100 pounds if my mothers birthday will be on friday 13th.
By:
Barton Bank
When: 13 Jun 16 16:46
If I could actually have my bets for the full stake at industry price I would be perfectly happy. Don't even mind taking a shade under e.g 6.8 about a 6-1 chance. But so much of the money on here is leeching bots reacting to market moves and not acutal punters cash that you have to smash up the price to have a decent bet on anything but the main markets.
By:
siwaadupa
When: 13 Jun 16 17:00
""The problem with [Betfair] is that they are going down the route of becoming a more traditional sports betting company, so their pricing is getting worse not better"
Jason Trost
By:
DIE LINKE
When: 13 Jun 16 19:50
Barton, I took some of your Ireland group winner bet (presumably), but have long since stopped making books on football markets as the bets simply weren't being taken.
By:
romfordiron
When: 13 Jun 16 19:54
To me, it's simply a lack of traditional punters that's the main issue on here. On highly liquid markets, the bots become invisible. It's the fact that bettors are going elsewhere that's causing some markets to become deserts (aside from a few annoying bots). If there's no backers, nobody bothers to provide liquidity, which in turn forces more backers away. It's a vicious circle that is an obvious result of years of the exchange being neglected. At least there are some signs that the exchange has started to be promoted again. It needs a big promotion drive to get anywhere near to the level it once was in terms of side-market liquidity.
By:
Barton Bank
When: 14 Jun 16 14:03
Die Linke, cheers. Could have done with them beating Sweden but at least it isn't yet dead in the water.
By:
pxb
When: 15 Jun 16 01:48
Getafix, you are right that over the longer term volume and liquidity will tend to move in the same direction for the reasons stated. Although I am pretty sure that relative to each other, decreasing volume will result in a relative increase in liquidity (in $ amounts), and visa versa.

I can see how low volume/liquidity affects particularly horse racing, but FWIIW, low volume/liquidity suits me in many of the markets I trade.
By:
Templeton Peck
When: 16 Jun 16 22:36
romfordiron
Date Joined:    10 Nov 10
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13 Jun 16 19:54 Joined: 10 Nov 10 | Topic/replies: 68 | Blogger: romfordiron's blog
To me, it's simply a lack of traditional punters that's the main issue on here. On highly liquid markets, the bots become invisible. It's the fact that bettors are going elsewhere that's causing some markets to become deserts (aside from a few annoying bots). If there's no backers, nobody bothers to provide liquidity, which in turn forces more backers away. It's a vicious circle that is an obvious result of years of the exchange being neglected. At least there are some signs that the exchange has started to be promoted again. It needs a big promotion drive to get anywhere near to the level it once was in terms of side-market liquidity.


Spot on.  And not just traditional punters but those who have a great edge in a few markets being charged 20-60% on ALL markets.  So you might be a great football match odds trader, fancy a cheeky punt on First Goalscorer but wouldn't consider Betfair as you get hit 20%-60%.  The PC is far too simplistic.  They could start by scrapping it from all side markets.
By:
dave1357
When: 17 Jun 16 09:00
So you might be a great football match odds trader, fancy a cheeky punt on First Goalscorer but wouldn't consider Betfair as you get hit 20%-60%.

But if the bet loses, you won't get charged 20%-60% on your next "football match odds trade".

just saying
By:
Janthefish
When: 17 Jun 16 09:46
Butif it wins you will be, so you have it elsewhere
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