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Mr Magoo
12 Jan 13 22:43
Date Joined: 28 Mar 05
| Topic/replies: 1,883 | Blogger: Mr Magoo's blog
Could Betfair please publish details about how they 'manually reconcile' Betfair starting price markets when there is a problem with the site? As far as I can tell, there is no adequate documentation anywhere about this.

For example, in today's outage, several markets have been manually reconciled. What I don't get is this: When BSP bets are matched, they are matched against:
1) Other, opposing BSP bets (i.e. the 'Far price' in the projected SP)
2) Unmatched 'normal' bets in the exchange (the 'near price')

During a Betfair outage, does the BSP get calculated just by the far price? Or do unmatched bets on the exchange get matched as part of the SP? If so, this would be very confusing. When the site goes down, I might have unmatched bets on markets that start while the Betfair site is being glued back together. Then when the site comes back up, I'd suddenly have bets magically matched on markets that weren't available due to the outage. This would surely be unfair.

On the other hand, if BSP is calculated just on the 'far price' (only matching against other SP bets), a mismatch between backers & layer would result in widely out of the normal SP prices, resulting in shoddy odds to your customers. Also unfair, especially when the site defaults to showing predicted 'near price' SPs and customers assuming that they can safely expect reasonable and sane odds.

Or, do Betfair manually tweak the BSPs to make them look sane, even if the mechanics would have resulted in dumb, obviously crazy odds?

In short, what is the Betfair policy, could someone authoritatively state it please?
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Report Betfair Community Manager 4 January 13, 2013 9:35 AM GMT
I've passed this enquiry on to the helpdesk Mr Magoo, someone will contact you shortly.
Report Betfair Community Manager 4 January 13, 2013 10:35 AM GMT
I have received this reply from our Market Operations team:

"If for whatever reason the site is unavailable when an event starts or the SP cannot otherwise be reconciled at the 'off', Betfair will determine the SP using all available information. For the avoidance of doubt this information will not be limited to betting activity on the relevant Betfair market(s). Also in these circumstances, a licensed betting operator within the Betfair group may act as risk counterparty to SP bets if necessary to ensure a fair SP. The Betfair personnel involved in determining the SP in such circumstances will have no undeclared personal or other interest in the SP in question."
Report Mr Magoo January 13, 2013 2:47 PM GMT
Hi BCM3, and thanks for chasing this up with market operations.

However, their answer doesn't really explain matters much further, and doesn't answer some of my questions. I was hoping for an explanation where it would be possible for a user to figure out the SPs by following through the method that Betfair uses. The answer gives no clue as to the method Betfair may use.

Betfair will determine the SP using all available information

But I would like to know how Betfair will determine the SP using all this available information. ensure a fair SP

Could you define what a fair SP is, please?

And, from my initial post, is it possible that an unmatched (non-SP) bet of mine, sitting in the market at the time the Betfair site goes down, could be used as part of the manually-reconciled BSP process, meaning that when the site comes back up my bet will now have been 'matched' ?
Report Mr Magoo January 13, 2013 3:03 PM GMT
Also, one more point. I'm probably sounding picky here, but I really would just like some clarity about the process and the decisions about setting the SP during Betfair outages:

The Betfair personnel involved in determining the SP in such circumstances will have no undeclared personal or other interest in the SP in question

They may not have undeclared personal interests, but do they act under Betfair's own interests?

For example, let's say I foolishly place a BSP bet on the favourite in a horse race, £1000 at no minimum odds. The bet is placed early in the morning. On a normal market, I might expect that come the start of the race, there would be enough liquidity that my bet will get a fair market price from SP layers and exchange layers, and won't get swallowed up at 1.01 or similar.

But, disaster strikes, an hour before the off, the intern spills his coffee over Betfair's server and the site goes down.  Shaking the coffee out takes a few hours and by the time the site is up and running, the race is long over. The favourite, a 3/1 shot (industry SP) has gone and won the race.

Now, what odds will the Betfair SP get reconciled at? Because the site was down long before the race, I'd guess that there probably wasn't much in the way of BSP bets lying around to match up, and if these were solely used, my £1000 SP bet would get settled at atrocious low odds. From Market Op's statement above, I can infer that won't happen and Betfair will try to adjust things so as to give a 'fair' SP (by some measure). Their statement mentions using a Betfair group counterparty, aka Betfair standing some or all of the bets. But at what odds? How can Betfair fairly pick the odds if they are the ones paying out - and, at the time they pick the odds, they know that the horse has won and the higher the odds, the bigger the liability. Do Betfair act by picking a fair SP in this case without consideration for their own liability, or will they take it into account? What if my bet was £1,000,000 instead? How would Betfair act, and in whose interest?

This isnt mean to be a rant against Betfair, I just think the actions taken when the site fails need to clearly explained.
Report Mr Magoo January 23, 2013 5:36 PM GMT
BCM, Any chance of an update from the powers that be, please?
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