Is This Betfair's Coffin?

There are some fairly obvious problems with this, but if I can get the money out and legitimized I'll be all over it.

I'll certainly pay close attention to it.

100 pounds invested in Bitcoin 5 years ago is now worth over 48,000 pounds, is that right ?

Had I known about the crowd funding (now closed), I would have been in.

Looks very interesting, but are there some security/fraud issues (unregulated)? How certain/safe would your profits/funds be?

My thoughts:

- the thing you need to make a successful betting Exchange is a supply of losing/recreational punters.  How are they to be tempted to a betting site that'll be doubtfully legal (certainly no IBAS), take bets in a currency they have no experience of (and turning £ into Bitcoin is a lot easier than turning Bitcoin back into £).  Especially as they won't be able to legally advertise in the UK.

- how will the pay for the staff required to set up and manage markets?  Where will they base those staff, if they want to stay out of the reach of national laws?

Surely the major stumbling block would be the volatility of Bitcoin. In the past it has had drawdowns of 75% and 10-20% is not unusual.

This would likely lead to volatility of liquidity on the exchange too – When Bitcoin goes into a downward trend people would withdraw money out of fear of it continuing.

In a number of sports, notably cricket, markets aren't managed and set up of match odds is trivial.

Do they actually need retail punters? At least the small stakes ones. Big hitters will find their way there if it is advantageous. As will what I call wholesale. Which we already see a lot of in cricket markets. I predict Indian bookies will love it.

The volatility of bitcoin would be part of the gamble.

I'll certainly give it a try. Not least because it allows Australians to bet inplay.

And it's crowd funded. People crowd projects they would want to use, which will give an initial core of users.

The main issue I see is slow settlement with the blockchain technology, but that won't bother the big guys too much.

It doesn't appear to be making any pretense at legality and I'm sure anyone who uses it will be breaking all kinds of laws. Even if you don't mind breaking the law that's a problem if you intend to win because you'd have to go through a whole laundering thing to get your hands on your money so - as they say "there's that...."

sadly, this sounds dead before it even starts...

Plenty told Wray and Black the same about Betfair when they were looking for start up backing

That's true doubled, but at least BF always worked on a familiar currency (and money processing system), not sure this does.

Not sure when BF actually launched but Flutter.com was already around - BF bought them out some time later. Flutter didn't have the exchange format as such but did allow peer-to-peer betting.

Interesting comments. (I put the same thread on Horse racing and it was a waste of time).

I didn't realise Bitcoin was hard to cash out. Maybe that would ease in the long term.

I like the idea of an exchange without BF's arbitrary meddling - you never know which rule
they are going to employ or when. It would be OK if they had some decent customer support,
but that's finished since the PP takeover, as far as I've seen.

If I did get into this would probably dabble very small stakes to see how it goes. Test the water first.

And cricket markets are insanely profitable for bf. Operational profit margin must be over 90%. And probably the majority of the money originates in transactions that are illegal in South Asia mostly.

Selling bitcoin is problematic because of scammers; stolen CCs etc. A bitcoin betting exchange could also function as a trusted bc exchange. Reading their whitepaper, it appears they will.

The only place I can see, relevant to cricket betting, where bitcoin is currently illegal is Bangladesh. Although moves to make it illegal in other places would certainly be a risk.

There's certainly a perception of shadiness around bitcoin. The recent malware file encryption attack demanded payment in bitcoin. Sure you could argue that's no more bitcoin's fault than the association between brown envelopes and the payment of corrupt Tory MPs for asking parliamentary questions but like the brown envelopes of cash, the anonymity that bitcoin allows means you could easily be sailing close to the wind trying to invest a decent amount in it. As I said earlier though, a speculative few hundred quid does appeal.

Bitcoin is already widely used in the gambling industry.

https://themerkle.com/how-bitcoin-is-revolutionizing-the-u-s-sportsbook-industry/

There's certainly a perception of shadiness around bitcoin.

As a cricket trader like me, a significant proportion of your profit will have originated as illegal bets in S Asia. I don't expect it bothers you any more than it bothers me. That is, not at all.

Ditto for bitcoin.

The idea that your funds could suddenly get devalued (based on bitcoin) surely bothers you?

Nah. I see my AUD funds get devalued (and revalued) all the time on bf.

Is bitcoin as stable as AUD (I'm not a currency expert, as you can tell)??

Pxb

While its easy to be blasé about the value of Bitcoins going up or down, in the last year alone it has dropped in value against AUD by approx. 30% three times (once in the space of a week). Of course it has increased in value by 300% over the year as a whole which is great but it doesn’t always work like that. For example in the calendar year of 2014 it dropped by 55%.

I just can’t see most people being able to stomach that sort of volatility. I would imagine that the sort of players that would get involved would be relatively large players who are attracted to a non-PC platform – the sort of players who keep thousands or tens of thousands in their account. Unless they are prepared to take a long-term bet on Bitcoin increasing they may be reluctant to deposit that sort of money given the likely volatility?

On the other hand I can’t see small players be willing to go through the hassle of opening a Bitcoin denominated account to place bets in the tens/hundreds (why bother when you can just stick with BF/Purple/Sm@rkets etc.?

Stu

By comparison, the biggest drop over the last year of AUD v USD was approx. 7.5%.

The point is though, if you earn and spend Aussie Dollars then that doesn't really matter too much. Unless you spend a large amount of Bitcoins online then the volatility of Bitcoins is going to affect you a lot more when you redeem them for your local currency.

It's not really that bitcoin is hard to cash out - it's just that because you inevitably have to transform it into some kind of 'conventional' currency before you can actually buy anything with it there's always some kind of electronic end-point where you're going to have to answer for where you got the money from. Much as you do if you deposit large amounts of cash in the bank. One of the things I like about Betfair is that it's so well documented and provably legit. Should the tax man ever come knocking I can easily show where my funds come from. I could end up a bit-coin billionaire and still not be able to buy anything with it. It wouldn't be terribly difficult to set up a little business selling e-books and buy them from yourself, but then you'd be paying taxes and doing all of that - do I really need the bother?

On the other hand I'd love to be taking on more markets and a bigger pool of gamblers, betting against inexperienced players on US racing....! Yes please!

I can’t see small players be willing to go through the hassle of opening a Bitcoin denominated account to place bets in the tens/hundreds (why bother when you can just stick with BF/Purple/Sm@rkets etc.?

I can - they'll do it because they live in countries where gambling is illegal - like the 'Land of the Free' where you're free to buy a machine gun but not play poker on your computer (or even cross the road like a grown up.)

It's interesting to hear how people are prisoners of their preconceptions.

Thanks for that info Gin - that was the worry I must admit for this.

Aye robot

Good point re: gambling in illegal countries. This obviously gives people from those countries an extra incentive despite the possible drawbacks and it is a pretty big pool of people!

Pxb

I’m not sure who your “preconceptions” comment is aimed at but people are pointing out valid drawbacks.

The fact is, people would equate their Bitcoin balance with the equivalent home currency and not knowing what your balance is going to be worth from week to week will put a lot of people off.

Of course bitcoin will probably become a lot less volatile at some point in the future which would lessen the problem. As for when that might happen – who knows? Even if it stabilised for a year or two, I would always be wary of a possible big move around the corner.

It's only got to start showing any signs of taking off and it will force Betfair to raise their game. So that alone is a positive.

Thanks, longbridge btw

The AUD GBP exchange rate has been volatile over the last year. Falling by 40% at one stage. No 300% gain sadly.

TBH, I am not sure bitcoin won't crash and not recover at some stage. I read today that bitcoin is declining rather rapidly compared to other cryptocurrencies (or if you prefer other CCs are rising much faster than bitcoin). But note the article I posted earlier where as much as 30% of existing betting site's volumes are already in bitcoin.

As I said earlier in the thread, I don't see this platform attracting the small time retail punter,at least not initially. I think a lot of the Indian money will go there fairly quickly.

May 18, 2017 -- 8:12AM, pxb wrote:

There's certainly a perception of shadiness around bitcoin. As a cricket trader like me, a significant proportion of your profit will have originated as illegal bets in S Asia. I don't expect it bothers you any more than it bothers me. That is, not at all.Ditto for bitcoin.

You're quite right in thinking that I'm not troubled by that, I was more vaguely alluding to how governments and tax men might view it.

Gambling winnings are not taxed in Aus. I don't know about the UK.

As long as bitcoin is legal and I can prove I made the money thru gambling, I doubt there will be any issue.

It's possible the government will try and block the site, but VPN's will get around that.

This might be a deal breaker for some...

IF YOU LOSE YOUR PASSWORD, YOU WILL LOSE ALL OF YOUR FUNDS!
KEEP YOUR PASSWORD SAFE!

As long as bitcoin is legal and I can prove I made the money thru gambling, I doubt there will be any issue.

The question will be whether the exchange itself is legal and has the necessary licences in whatever jurisdiction you're in. In the uk Gambling is legal and winnings are not taxed - but I think it's only legal if you're a retail bettor betting through licensed providers.

As the time approached I'll be brushing up on the legalities......

My initial thought is that this is good for Betfair. What we have here is a platform that potentially makes Betfair look like a cooperating fully paid up member of the establishment (which I am sure they will argue that they are). The reason it is good is that governments have a new and strong reason to stop leaning on the betting industry and the same can be said for the horse racing industry V bookmakers. They know that a real non tax paying no levy paying alternative is breathing down their necks so hopefully you can stop worrying about Betfair putting their commissions up to pay extra tax and levy. You might even see a regression of the scandalous Premium tax.

As for Betfair v bitcoin well do you really think that Betfair would not go Blockchain if they have to ?. Also will punters really embrace Bitcoing anonymous betting given that the average forum member on here still cannot get it through their thick skulls that they have a more prosperous future betting on here than they do with bookmakers

My initial thought is that this is good for Betfair. What we have here is a platform that potentially makes Betfair look like a cooperating fully paid up member of the establishment (which I am sure they will argue that they are). The reason it is good is that governments have a new and strong reason to stop leaning on the betting industry and the same can be said for the horse racing industry V bookmakers. They know that a real non tax paying no levy paying alternative is breathing down their necks so hopefully you can stop worrying about Betfair putting their commissions up to pay extra tax and levy. You might even see a regression of the scandalous Premium tax.

As for Betfair v bitcoin well do you really think that Betfair would not go Blockchain if they have to ?. Also will punters really embrace Bitcoing anonymous betting given that the average forum member on here still cannot get it through their thick skulls that they have a more prosperous future betting on here than they do with bookmakers

Betfair became a member of the establishment the other day. The Hong Kong Jockey Club - haters of Betfair traidtionally - virtually described Betfair as a shining beacon!

Although this was when discussing illegal Asian exchanges!!!

It's not illegal for an Australian to bet with an offshore gambling operator. I just checked.

By the number of people on this thread I would say this is real competition to Betfair at long last.

Bitcoin has hit USD 2,000.