Exchange wagering

[Vengeance of Rain]

Does anyone have a strong opinion either way?

[cj]

It will be great, but only if the takeout is 10% or even less.

[Vengeance of Rain]

I don't understand the strong opinions against it but I don't know much about it either way.
People are arguing about "integrity problems" and if it will leave the industry better or worse off. What am I missing? Why are the people opposed to it so extreme in their opinions?

[cj]

I don't understand the strong opinions against it but I don't know much about it either way.
People are arguing about "integrity problems" and if it will leave the industry better or worse off. What am I missing? Why are the people opposed to it so extreme in their opinions?

The biggest downside is that you can bet against yourself...i.e. lose on purpose. If regulated properly, it isn't much different than other betting. However, I can understand having little faith in the "regulated properly" part of the argument.

[Vengeance of Rain]

What do you think of the comments made by Gary Stevens? Are they over the top?

http://www.bloodhorse.com/horse-racing/articles/67397/exchange-wagering-grilled-at-chrb-meeting

[thaskalos]

The success of exchange wagering in this country will be dependant upon who will be in charge of its supervision.

If it's an independent agency...then there is a hope that there will be proper policing of the process...and that there will be timely investigations to expose the thieving offenders who try to take advantage of the unsuspecting public.

If, on the other hand, it is run by the same people who run the game today...then expect these improprieties to be swept under the rug -- like so many other things are today -- in an effort to protect the reputation of the game.

[Vengeance of Rain]

For anyone who wants to listen.

I could only handle a few minutes of it.

http://www.selectstreaming.com/live/chrb/archives.php

[AndyC]

It will be great, but only if the takeout is 10% or even less.

What is so special about 10%? Remember that the exchange takeout is only levied on the winnings whereas the tote take is on the entire pool.

Simple example. Assume the takeout rate is 15%. If 2 bettors made up the entire win pool with one bettor betting $5,000 on the #1 horse and the second bettor betting $5,000 on the 2 horse. Under the tote system the winner would have net winnings of $3,500. Under exchange wagering using a 15% take one of the bettors would be laying $5,000 against the other horse at 1/1 odds and the winner would net $4,250. So the tote take would need to be 7.5% to be equivalent to a 15% exchange wagering take-out.

So the bottom line is that even if the exchange wagering take-out rate was equal to the current tote take-out rate it would still be a huge benefit.

[cj]

So the bottom line is that even if the exchange wagering take-out rate was equal to the current tote take-out rate it would still be a huge benefit.

It will fail dismally if tried at current rates in my opinion. It can only work if people have a reason to bet it. However you spell it out, winners pay the takeout in the parimutuel system, not losers. If I bet $100 and lose, it costs me $100. If I "should" win $100 before takeout, I'm only getting $85 back after at the best of tracks.

The flaw I see in your example is that people are not going to offer even money on true even money shots.

[shots]

Does anybody know what the average bet on an exchange for a horse race is? Just curious.

[AndyC]

The flaw I see in your example is that people are not going to offer even money on true even money shots.

The horse might be 4/5 to the bettor but 7/5 to the person laying the bet. That's what makes an exchange. The perception of value differs.

What should also happen is that the tote will set a floor for the acceptable price. If you can get 8/5 through the tote you certainly wouldn't take 6/5 on the exchange.

[cj]

The horse might be 4/5 to the bettor but 7/5 to the person laying the bet. That's what makes an exchange. The perception of value differs.

What should also happen is that the tote will set a floor for the acceptable price. If you can get 8/5 through the tote you certainly wouldn't take 6/5 on the exchange.

I know, I get that, but it still won't work at a 15% (or higher) rake in my opinion. Anybody thinking they are getting 8 to 5 on the tote probably won't once the gate opens. There are a lot of good reasons to bet via an exchange, but they will all be canceled out if the takeout is like the tote.

[davew]

Gary Stevens quote/opinion almost makes me think he feels jockeys are not very intelligent ->

Former jockey Gary Stevens, also representing the Guild, was adamantly opposed to exchange wagering. He said that it would change how jockeys ride a race. In a turf race, Stevens said, he was always taught to save ground and hope for an opening along the rail because most horses aren’t good enough to win if they have to go around the field. He said that if exchange wagering were allowed, jockeys would always go around so that they couldn’t be accused of getting the horse stopped.

“Jockeys will consciously go five or six wide,” said Stevens. “You’re penalizing people who bet the horse to win.”


Read more: http://www.bloodhorse.com/horse-racing/articles/67397/exchange-wagering-grilled-at-chrb-meeting#ixzz1m162ZQH4

[Charli125]

Gary Stevens quote/opinion almost makes me think he feels jockeys are not very intelligent ->

Former jockey Gary Stevens, also representing the Guild, was adamantly opposed to exchange wagering. He said that it would change how jockeys ride a race. In a turf race, Stevens said, he was always taught to save ground and hope for an opening along the rail because most horses aren’t good enough to win if they have to go around the field. He said that if exchange wagering were allowed, jockeys would always go around so that they couldn’t be accused of getting the horse stopped.

“Jockeys will consciously go five or six wide,” said Stevens. “You’re penalizing people who bet the horse to win.”


Read more: http://www.bloodhorse.com/horse-racing/articles/67397/exchange-wagering-grilled-at-chrb-meeting#ixzz1m162ZQH4

I agree. I thought his statement was just ignorant. To paraphrase, he's saying that because they might be accused of riding to lose intentionally, they're going to ride to lose intentionally. It's a dumb statement.

[Vengeance of Rain]

That's why I had asked about his comments. I thought they were bizarre and wasn't sure if I was the one who needed a reality check.

[Horseplayersbet.com]

I agree. I thought his statement was just ignorant. To paraphrase, he's saying that because they might be accused of riding to lose intentionally, they're going to ride to lose intentionally. It's a dumb statement.
The reality is that I've never heard of riding styles changing in the UK, etc. because of Betfair.
I think every seasoned handicapper knows that saving ground carries tremendous risk that the horse will get into trouble, but the fact that many horses on the turf win because they travel the least distance, makes the risk worth it.
If jockeys start playing games because of Betfair, it won't take long before they are found out because every wager is tracked. And it is doubtful that a corrupt jockey (if there are any), will cheat only once.
There are good arguments for and against Betfair, but changing a jockeys style isn't a very good one.

[Robert Goren]

I agree. I thought his statement was just ignorant. To paraphrase, he's saying that because they might be accused of riding to lose intentionally, they're going to ride to lose intentionally. It's a dumb statement. I think what he was saying that that some jockeys will change the way they ride to avoid the appearance of stiffing a horse.

[Robert Fischer]

Pari-mutuel wagering is the best.


Exchange wagering is a great supplement and option to have.

[bob60566]

I think what he was saying that that some jockeys will change the way they ride to avoid the appearance of stiffing a horse..
My opinion that jocks are told how they ride a horse by the trainer.
They follow instructions or else.

Mac:)

[mannyberrios]

If you are a jockey, how are you going to know that I bet you to win, or lose?

[bob60566]

If you are a jockey, how are you going to know that I bet you to win, or lose?

Because the the trainer told you so and follow my instructions to the letter.

Mac:)

[Dave Schwartz]

How do you bet an exacta?

[bob60566]

How do you bet an exacta?

1% of all bets and that is being conservative

Mac:)

[BIG49010]

How do you bet an exacta?

Win or show is the way it is in Europe. It's great for the serious win people, with 5% take. I loved it until they kicked us out in 2005.

[bob60566]

]Win or show is the way it is in Europe. It's great for the serious win people, with 5% take[/b]. I loved it until they kicked us out in 2005.

Dave
Any comment on this with Betfair making its entrance to North America tracks
My thought bring it on
Mac:ThmbUp:

[Some_One]

How do you bet an exacta?

You don't

[Some_One]

It will fail dismally if tried at current rates in my opinion. It can only work if people have a reason to bet it. However you spell it out, winners pay the takeout in the parimutuel system, not losers. If I bet $100 and lose, it costs me $100. If I "should" win $100 before takeout, I'm only getting $85 back after at the best of tracks.

The flaw I see in your example is that people are not going to offer even money on true even money shots.

But if on track that win bet would only yield $50, you're +35 on the exchanges.

[toussaud]

it depends on your bankroll.

the more money you wager per race the more you tend to like exchange wagering.

[cj]

But if on track that win bet would only yield $50, you're +35 on the exchanges.

How so? I'd love to see actual math on some of this stuff you guys are posting. Takeout is takeout. If exchange wagering has the same as straight bets in the US, the only two advantages to exchange wagering will be that you can lay a horse to lose, and even bigger, you are betting at fixed odds. That is the bigger advantage by far.

Still, I think at current takeout rates, it would flop.

[Robert Goren]

.
My opinion that jocks are told how they ride a horse by the trainer.
They follow instructions or else.

Mac:)Most of the time the trainer tells the jockey "Don't fall off"

[bob60566]

Most of the time the trainer tells the jockey "Don't fall off"
I would like to think that was the very first instruction.

Mac:)

[Some_One]

How so? I'd love to see actual math on some of this stuff you guys are posting. Takeout is takeout. If exchange wagering has the same as straight bets in the US, the only two advantages to exchange wagering will be that you can lay a horse to lose, and even bigger, you are betting at fixed odds. That is the bigger advantage by far.

Still, I think at current takeout rates, it would flop.

The Betfair form site does a great job showing the winner, tote odds and betfair SP and then a percentage showing how much better off you were if you took the SP which factors in a base 5% rate (so take out another 5% if Cali gets approved).

The link below is from yesterday's 2nd at Aqu where you were 29% better off (factoring in a 5% commission) on the winner.

http://form.horseracing.betfair.com/horse-racing/100212/Aqueduct-US-AQU/1252

[cj]

The Betfair form site does a great job showing the winner, tote odds and betfair SP and then a percentage showing how much better off you were if you took the SP which factors in a base 5% rate (so take out another 5% if Cali gets approved).

The link below is from yesterday's 2nd at Aqu where you were 29% better off (factoring in a 5% commission) on the winner.

http://form.horseracing.betfair.com/horse-racing/100212/Aqueduct-US-AQU/1252

I do understand all this, but given that we don't ever know the true odds until about the 1/4 pole makes the point moot. As I mentioned, the big advantage is you get fixed odds, right? Of course the disadvantage is you may not be able to bet as much as you like.

[Vengeance of Rain]

I do understand all this, but given that we don't ever know the true odds until about the 1/4 pole makes the point moot. As I mentioned, the big advantage is you get fixed odds, right? Of course the disadvantage is you may not be able to bet as much as you like.
I don't understand this part about possibly not being able to bet as much as you'd like. Why would that be so?

[cj]

I don't understand this part about possibly not being able to bet as much as you'd like. Why would that be so?

You can only bet against what people offer. If you want to bet $100 on a horse at 5 to 1, but only 50 is offered at that price, you can only bet $50.

[Vengeance of Rain]

You can only bet against what people offer. If you want to bet $100 on a horse at 5 to 1, but only 50 is offered at that price, you can only bet $50.
I get it now. Thank you.

[Dave Schwartz]

MY point about exactas is that a huge part of N.A. handle is exacta wagering. What will those exacta players do?

1. Stay with parimutuel as long as it is available and then switch to win bets

or

2. Stay with parimutuel as long as it is available and then quit altogether.


Americans have been pushed in the direction of exotics. Payoffs are larger. Without exotics will many players lose interest?

I think they will.

[Jeff P]

Link to a write up about exchange wagering that I'm currently working on for HANA:
http://www.jcapper.com/HANA/ExchangeWagering_CHRB.pdf

Exchange wagering offers variations of win bets only. It does not offer
variations of exotic wagers.

Exchange Wagering will not cannibalize or replace the pari-mutuel
tote. It will supplement it.


-jp

.

[cj]

MY point about exactas is that a huge part of N.A. handle is exacta wagering. What will those exacta players do?

1. Stay with parimutuel as long as it is available and then switch to win bets

or

2. Stay with parimutuel as long as it is available and then quit altogether.


Americans have been pushed in the direction of exotics. Payoffs are larger. Without exotics will many players lose interest?

I think they will.

I don't think anyone is saying you can't have both. They certainly do in Europe.

[AndyC]

MY point about exactas is that a huge part of N.A. handle is exacta wagering. What will those exacta players do?

1. Stay with parimutuel as long as it is available and then switch to win bets

or

2. Stay with parimutuel as long as it is available and then quit altogether.


Americans have been pushed in the direction of exotics. Payoffs are larger. Without exotics will many players lose interest?

I think they will.

Dave,

You miss the point. Exchanges won't replace the tote they will be in addition to the tote. A player can bet through either one. The tote will in effect act as a floor for the exchanges in that the price offered needs to be higher than what is offered on the tote.

Yesterday at Santa Anita 26.7% of the handle was from W-P-S betting so the amount handle switching from tote to exchanges will probably less than 10% of the total handle. But in my view the upside for expansion of win bets through the exchanges is enormous.

[Some_One]

I do understand all this, but given that we don't ever know the true odds until about the 1/4 pole makes the point moot. As I mentioned, the big advantage is you get fixed odds, right? Of course the disadvantage is you may not be able to bet as much as you like.

If you bet <$100, you'll be able to get matched on anything based on the current liquidity on BF

[classhandicapper]

I played on an exchange for several years. From a gamblers perspective, IMO it's the greatest thing to ever happen to racing.

The prices are often not a bargain relative to track prices (both for and against) because of the spread and the sharpness of the players, but they don't always have to be.

When I'm playing a horse I look at both the parimutuel price and the exchange price and take the better one.

When I hate a horse I look at what I can construct betting against him in the parimutuel pools, what price it is to book a bet on him, and take the better option.

Over the course of a few years I was MASSIVELY better off with the exchange option.

If you eliminate parimutuel wagering altogether and it's not an "either or" option, things may change a little. But if the exchange markets are much more liquid (and they will be in that event) the spreads will narrow very sharply, the amounts available to bet will increase dramatically, and the only thing you will be paying is the commission (which will be lower than the track take).

None of this even addresses the advantage of locking in a price and not having to worry about the price changing on the last couple of flashes.

I have no understanding why people are resistant to this. I was getting massively better results on the exchange despite the spread and liquidity issues and those things will only improve as they are accepted and the handle increases.

[cj]

CH, don't you think a lot of that would go away if the commission, i.e. takeout, was 17 or 18 percent? Surely a lot of this perceived value comes from that difference alone, right?

[Some_One]

CH, don't you think a lot of that would go away if the commission, i.e. takeout, was 17 or 18 percent? Surely a lot of this perceived value comes from that difference alone, right?

Of course, but that supports the opinion that lower takeouts increase wagering which results in higher profits for the track.

[Dave Schwartz]

Don't misunderstand - I am all for it. I LOVE the idea of taking a stance AGAINST a low-priced horse. It is truly what I do best.

And I see the advantage of arbitrage - playing the parimutuel against the Exchange.

Does anyone really believe that this opportunity will not quickly be snapped up by the technology?

[cj]

Of course, but that supports the opinion that lower takeouts increase wagering which results in higher profits for the track.
I bring this up because the other poster seems to think exchanges will work at the takeout rates on straight pools. I just don't see it. The low commission is what makes exchange betting attractive in the first place.

[classhandicapper]

CH, don't you think a lot of that would go away if the commission, i.e. takeout, was 17 or 18 percent? Surely a lot of this perceived value comes from that difference alone, right?

Yes.

I also see some totally ridiculous differences in prices at times.

Some mid range and longer priced horses that I think are live are WAY longer on the exchange than at the track. It's as if the bias in the betting where long shots tend to be very over bet at the track is more efficient on the exchange, but sometimes it extends to the good long shots too.

A bad horse that's 25-1 at the track might be 50-1 on the exchange, but if you find a live 15-1 shot, sometimes he might be 25-1.

[classhandicapper]

And I see the advantage of arbitrage - playing the parimutuel against the Exchange.

Does anyone really believe that this opportunity will not quickly be snapped up by the technology?

It might.

Before things got so "hot" offshore, I was crushing on arbitrage opportunities in NY because the exchange was so inefficient. I was getting 2 races a day in NY where I could book a horse at one price on the exchange and bet the same horse to win with a rebate at another site.

No matter what happened I'd make money. It was so ridiculous, I was initially cautious because I was sure something bad was going to happen that I didn't think of. The margins weren't even narrow. I would book at 3-1 and get 6-1 (stuff like that) :lol:

Eventually those opportunities evaporated as the beginners washed out and other more sophisticated players joined the exchange (I joined on the first week). But there are still differences between the pools, just not crazy stuff like that anymore. So maybe eventually most of it will go away.

[Dave Schwartz]

Classie,

Exactly my point. Eventually it will match the parimutuel very closely. As CJ said, ultimately it will have to, even if they have to raise the takeout to match.

[classhandicapper]

Classie,

Exactly my point. Eventually it will match the parimutuel very closely. As CJ said, ultimately it will have to, even if they have to raise the takeout to match.

I'm not sure why they would "have to" raise the takeout. It might develop into a situation where WPS is done on the exchange and exotics are done in the parimutuel pool.

All I can tell you is that there are still inefficiencies between the pools. They are mostly found on mid priced and longer priced horses. The prices are often much higher on the exchange than at the track, but you occasionally see one on a short priced horse also.

[AndyC]

I bring this up because the other poster seems to think exchanges will work at the takeout rates on straight pools. I just don't see it. The low commission is what makes exchange betting attractive in the first place.

A rate taken against just the winnings is NOT the same as a rate taken against the entire pool, hence the exchange take out rate charged would still be lower. What makes exchange betting attractive is the ability to get a fixed rate.

[AndyC]

Don't misunderstand - I am all for it. I LOVE the idea of taking a stance AGAINST a low-priced horse. It is truly what I do best.

And I see the advantage of arbitrage - playing the parimutuel against the Exchange.

Does anyone really believe that this opportunity will not quickly be snapped up by the technology?

How about the opportunity to just make a bet and actually know what your price will be? It certainly helps when one factor in the gambling equation is fixed.

[cj]

A rate taken against just the winnings is NOT the same as a rate taken against the entire pool, hence the exchange take out rate charged would still be lower. What makes exchange betting attractive is the ability to get a fixed rate.
I mentioned the fixed price already. However, winners pay the takeout no matter how you slice it. I already addressed that. Your argument that it is somehow different makes no sense.

[bob60566]

Having been used to using Bookmakers in my past I like the choice to use both Betfair and my ADW the individual gambler will go to one or the other as he pleases. My Question having Betfair to wager from my ADW will it increase the handle or decrease???.

Mac:confused:

[AndyC]

I mentioned the fixed price already. However, winners pay the takeout no matter how you slice it. I already addressed that. Your argument that it is somehow different makes no sense.

15% of 100% = 15

15% of 80% = 12

The tote not only takes from the winnings it also takes from the winners original bet! That's why it is different. The rate of 15% can be the same but the effective rate is always different.

[cj]

15% of 100% = 15

15% of 80% = 12

The tote not only takes from the winnings it also takes from the winners original bet! That's why it is different. The rate of 15% can be the same but the effective rate is always different.

That isn't how it works.

[lamboguy]

I bring this up because the other poster seems to think exchanges will work at the takeout rates on straight pools. I just don't see it. The low commission is what makes exchange betting attractive in the first place.what i really don't understand is for a place like penn national the w-p-s show takeout is only 7 1/2% after rebate for bigger players. even smaller ones will pay something like 10%. the only places that you might get a better deal with exchange wagering might be the larger tracks that don't have the bigger rebates, and that is a big MIGHT.

[AndyC]

That isn't how it works.

So you think that:

I am incorrect believing that if a person lays a $50,000 bet against a horse at 1/1 and another person accepts the bet for $50,000 that there has been a total of $100,000 bet? And I am also incorrect that the total commission or take-out from such a bet using a 15% rate is $7,500?

And I am incorrect that if the 2 bettors made their bets through the tote using a 15% rate that the take-out would be $15,000 based on $100,000 of bets?

So enlighten me.

If you don't see that scenario 1 using an exchange is significantly better despite using the same take-out rate then you and I will just have to agree to disagree.

[AndyC]

what i really don't understand is for a place like penn national the w-p-s show takeout is only 7 1/2% after rebate for bigger players. even smaller ones will pay something like 10%. the only places that you might get a better deal with exchange wagering might be the larger tracks that don't have the bigger rebates, and that is a big MIGHT.

When you consider the effect of the player's bet in the pools exchange wagering would still be better despite the low take-out.

[Dave Schwartz]

How about the opportunity to just make a bet and actually know what your price will be? It certainly helps when one factor in the gambling equation is fixed.

That is a good thing as well.

But how about you make a bet and nobody takes it so you don't get a bet.

Still, I am all for it.

[Some_One]

Classie,

Exactly my point. Eventually it will match the parimutuel very closely. As CJ said, ultimately it will have to, even if they have to raise the takeout to match.

I doubt that, looking at the first at Tampa, on track win pool was 60K, Betfair matched was 49K and you still got 3/2 (before commission) on the winning fav who was 4/5 on track. Markets are usually <103% overround which should mean before commission, most of the horses will be at a premium versus the totes.

[AndyC]

That is a good thing as well.

But how about you make a bet and nobody takes it so you don't get a bet.

Still, I am all for it.

99% of the players will be takers of bets and not layers of bets. If your bet isn't taken then your price was not acceptable.

[Robert Goren]

99% of the players will be takers of bets and not layers of bets. If your bet isn't taken then your price was not acceptable.On that we agree. The odds will be controlled by very few people.

[cj]

So you think that:

I am incorrect believing that if a person lays a $50,000 bet against a horse at 1/1 and another person accepts the bet for $50,000 that there has been a total of $100,000 bet? And I am also incorrect that the total commission or take-out from such a bet using a 15% rate is $7,500?

And I am incorrect that if the 2 bettors made their bets through the tote using a 15% rate that the take-out would be $15,000 based on $100,000 of bets?

So enlighten me.

If you don't see that scenario 1 using an exchange is significantly better despite using the same take-out rate then you and I will just have to agree to disagree.

I misunderstood what you were trying to say, which is why I asked for detail the first time. For the record, I'm all for exchanges.

[Horseplayersbet.com]

It is a little complicated when it comes to what the actual takeout is wrt Betfair.
Lets assume a very illiquid race (this happens occasionally when a few races go off close to the same time). Also, lets assume that both players have to pay 4% on what they win.

Now lets say the only match for this race was $10 at 6-1. Player A is wagering $10 to win $60 (gross before commissions) and player B is wagering $60 to win $10 (gross before commission).
If the horse wins, Betfair takes in $2.40 in commissions. If the horse loses, Betfair takes in 40 cents from the person who won $10.

Now lets say the horse wins, but Player A also bets $15 on another horse at 10-1 booked by someone else. Player A only pays commission on the $45 ($1.80) he won in the race, while the person on the other end of the $15 bet pays 60 cents to Betfair.

[usedtolovetvg]

It is a little complicated when it comes to what the actual takeout is wrt Betfair.
Lets assume a very illiquid race (this happens occasionally when a few races go off close to the same time). Also, lets assume that both players have to pay 4% on what they win.

Now lets say the only match for this race was $10 at 6-1. Player A is wagering $10 to win $60 (gross before commissions) and player B is wagering $60 to win $10 (gross before commission).
If the horse wins, Betfair takes in $2.40 in commissions. If the horse loses, Betfair takes in 40 cents from the person who won $10.

Now lets say the horse wins, but Player A also bets $15 on another horse at 10-1 booked by someone else. Player A only pays commission on the $45 ($1.80) he won in the race, while the person on the other end of the $15 bet pays 60 cents to Betfair.

Good work HP.com. We are getting to the real heart of what exchange wagering is all about. It is a market, like the stock market. The successful players will not care whether their horses win or lose. They are not horse players they are playing the market. To oversimplify, take at high odds and lay at low odds and not care about the outcome. Some have been so successful that Betfair charges them a 60% premium in Europe, http://www.guardian.co.uk/sport/blog/2011/jul/04/betfair-charge-hike-coin-flip. The fear is that the Market Makers will have the horseplayers for lunch, just like they do in the stock exchanges. And, of course, do little to help the industry.

[cj]

One thing to keep in mind, however, is that the spread isn't what it appears. If a horse is 5 to 1 on the exchange, and 4 to 1 on the tote, you will get paid 4 to 1 through the tote. On the exchange, if you bet $20 on offered odds of 5 to 1, you are not getting back 5 to 1 if you win. If the takeout was 15%, you are getting back $105. (I'm assuming the commission is on winnings, not the total return, correct me if I'm wrong) You might very well get $106 or $108 if you bet through the tote.

I'm just saying this isn't as clear cut as many believe.

[davew]

One thing to keep in mind, however, is that the spread isn't what it appears. If a horse is 5 to 1 on the exchange, and 4 to 1 on the tote, you will get paid 4 to 1 through the tote. On the exchange, if you bet $20 on offered odds of 5 to 1, you are not getting back 5 to 1 if you win. If the takeout was 15%, you are getting back $105. (I'm assuming the commission is on winnings, not the total return, correct me if I'm wrong) You might very well get $106 or $108 if you bet through the tote.

I'm just saying this isn't as clear cut as many believe.


4/1 on the tote would get you $10.00, $10.20, $10.40, $10.60, or $10.80 assuming dime breakage and 9/2 shown as next odds level

the exchange close may be 6.2 or 6.4 but could of had matched bets ranging from 4.0 through 8.8 (typical range for this level close) , but could have even more extreme bets or narrow window of bets placed. One thing for sure, they were not placed at one point.

The market for each horse moves up and down, depending on size of bids/asks is how I see it. If a favorite is way overbet, then the rest of the horses have higher pays than they should. The market remains open until the gate opens - then possibly an inplay market takes over.

The exchange numbers are not odds, but returns for 1 - similar to europe/australia.

The win pool for a race is 1 market - the profit (total all wins - all losses) for that market gets the tax. Many people are 'traders' playing the pre-race market movement. They may back a favorite at 2.60 and lay it when it gets down to 2.40. These people would be called scalpers in other markets. When it gets to race time, some people 'green up', which is balancing their books to guarantee a profit /or loss on that market.

It will be interesting to see if/when Betfair/TVG get this started as many people in the industry have been working on new 'exotics' - so that some average newby can go to the track - lose their roll in a couple races with the PK3, PK4, Place 9, whatever that first 5 finishers thing is called, whatever that 3 race show horse, last race winner thing is called........

What I do not understand, is why so many people have such strong opinions about something that they have little or no experience with.

[bob60566]

They intoduced decades ago and still in effect in the UK tax on betting where you had to pay the tax up front on your Wager or pay tax on the winnings go figure.
I paid up front
:) .
Mac

[BreadandButter]

. Some have been so successful that Betfair charges them a 60% premium in Europe, http://www.guardian.co.uk/sport/blog/2011/jul/04/betfair-charge-hike-coin-flip.


That is very concerning if the same premium charges were installed in the US. I believe currently anyone that shows a profit in their account is subjected to at least a 20% premium charge based upon weekly winnings (i.e., if you were up $100 for the week and only paid $5 in commissions your account would be debited an extra $15 to bring the commissions paid that week to equal 20% of your profit). Then once you hit a certain profit over the lifetime of your account your commission charge can be 40% to 60% on a weekly basis.

It's been discussed on other threads that Betfair appears to be nothing more than a "book" where winners are "discouraged" from playing.

[FenceBored]

Stephen Burn of Betfair/TVG was a guest on Roger Stein's Saturday show (http://www.rogerstein.com/archives/120211.wma) along with Justin7 (http://www.youtube.com/user/SbrJustin?feature=watch) of SportsBookReview.com (http://www.sportsbookreview.com/) to talk about exchange wagering and Betfair's dispute resolution procedures (warning: multiple references to Malta).

[usedtolovetvg]

Anyone who wants to get into bed with Betfair should take a long hard look at the way they conduct their business. There have been too many scandals and disgruntled account holders. All their top execs have jumped ship or forced to walk the plank (maybe Burn will be next). Their lack of transparency has been disheartening. If it wants Exchange Wagering, the industry should implement it itself.

[elhelmete]

I have a real (probably) simpleton question about exchange betting.

What's the real-world likelihood I won't get a bet in due to nobody wanting the opposite side, even in a market (like NYRA, Fla, or Cali) with lots of handle?

I feel like I'd primarily be a lay bettor if I got involved in exchanges, and I could envision being 'shut out' a lot, even with aggressive pricing.

[usedtolovetvg]

Just like the stock exchange, the big traders will have bots that will be scouring the markets for the best price and gobble them up before you even get your hand on the mouse.

[lamboguy]

BETFAIR operates no different than the way the horse books operated in nevada 25 years ago. if you are going to win, you are not going to get down for anything but peanuts. if you are a loser you can bet what you want.

in the old days in VEGAS, i would walk into CHURHILL DOWNS RACE AND SPORTS BOOK. i went up to the window and asked them if there were any restrictions on race 6 at PIMLICO. if they said no I asked them how much i could bet, they always said $20. i never gave them the horse until they allowed me the bet. i would start to walk away from the window and the manager would yell to me you can have $200 win, i wound up making a deal with him and wound up with a $300 ticket.

when i left the place and went down the strip to the ROSE BOWL and went to bet the same horse, they would never take it from me. they already got pounded on it. they said that was horse was the steam and they had enough on it already.

the same thing happens on BETFAIR. unlike other countries that most of the wagering is on straight bets, in this country straight bets at major tracks is less than the combined exotic wagers. that is precisely why BETFAIR will hurt the horse race betting game here.

[cj]

BETFAIR operates no different than the way the horse books operated in nevada 25 years ago. if you are going to win, you are not going to get down for anything but peanuts. if you are a loser you can bet what you want.



Betfair is not like Vegas race books. Those were player against house, Betfair is player against player with Betfair getting a rake off the top. It is more like poker.

They can charge whatever commission they want, people don't have to play. They are providing the market and therefore can make winners pay more to play, or the player can go elsewhere. I think they realize that a few people winning a bunch of money is going to discourage others from playing. A guy that keeps losing over and over is going to give up while the big winner is just going to keep the profit at Betfair's expense.

[classhandicapper]

That is very concerning if the same premium charges were installed in the US. I believe currently anyone that shows a profit in their account is subjected to at least a 20% premium charge based upon weekly winnings (i.e., if you were up $100 for the week and only paid $5 in commissions your account would be debited an extra $15 to bring the commissions paid that week to equal 20% of your profit). Then once you hit a certain profit over the lifetime of your account your commission charge can be 40% to 60% on a weekly basis.

It's been discussed on other threads that Betfair appears to be nothing more than a "book" where winners are "discouraged" from playing.

I never reviewed those premium charges, but that would be a legitimate concern if they weren't constructed properly.

If you have a few hot months and get charged and then have a few equally bad months to net out to zero, you'll be in the hole the premium charges - which of course is preposterous.

[lamboguy]

on BETFAIR you never see the face of the person that is accepting your bet. for all you know it might be BETFAIR themselves!

i had a friend in CANADA that was betting with BETFAIR, the first day he had no problem, the second day he could not bet half as much, and on the third day he bet the horse and the money wound up in the mutuel window.

[Canarsie]

Wasn't there a guy from Canada who posted within the past year that Betfair charged him a surcharge for winning? I wonder if that principle will be the same in this great country of ours.

[cj]

on BETFAIR you never see the face of the person that is accepting your bet. for all you know it might be BETFAIR themselves!

i had a friend in CANADA that was betting with BETFAIR, the first day he had no problem, the second day he could not bet half as much, and on the third day he bet the horse and the money wound up in the mutuel window.

I'd love to hear how you know the money was in the pools? Do you really think Betfair isn't regulated?

[usedtolovetvg]

Many Euro blogs on Betfair speculate that BF operates their own bots on their own website. That smacks of conflict of interest to me. They would thereby be both facilitator and player. It allows them to control who gets what or nothing at all. The further you deep the curiouser it gets.

[lamboguy]

I'd love to hear how you know the money was in the pools? Do you really think Betfair isn't regulated?we hit them with the wrong horse!

i have no idea if they are or were regulated back when this happened.

[usedtolovetvg]

Do you really think Betfair isn't regulated?

They are operating out of Gibralter and licensed by Malta. Nuff said.

[lamboguy]

They are operating out of Gibralter and licensed by Malta. Nuff said.why don't you explain to us about the regulations that the gambling commissions in those countries have in case they do have them!

[Robert Goren]

They are operating out of Gibralter and licensed by Malta. Nuff said. As a poker player , I can tell you that is code for bet at your own risk.

[Some_One]

Wasn't there a guy from Canada who posted within the past year that Betfair charged him a surcharge for winning? I wonder if that principle will be the same in this great country of ours.

The Premium Charge only applies if you have a profit of greater than 250K lifetime and in a quarter, your commission paid is less than 20% of your profits.

[Some_One]

One thing to keep in mind, however, is that the spread isn't what it appears. If a horse is 5 to 1 on the exchange, and 4 to 1 on the tote, you will get paid 4 to 1 through the tote. On the exchange, if you bet $20 on offered odds of 5 to 1, you are not getting back 5 to 1 if you win. If the takeout was 15%, you are getting back $105. (I'm assuming the commission is on winnings, not the total return, correct me if I'm wrong) You might very well get $106 or $108 if you bet through the tote.

I'm just saying this isn't as clear cut as many believe.

Commission is paid on net profits in a race, so say you had $20 bucks on two horses, both 5-1, and one of them won, you're net profit was 80 bucks, so you would pay the commission on that, and not 100 dollars.

[cj]

Commission is paid on net profits in a race, so say you had $20 bucks on two horses, both 5-1, and one of them won, you're net profit was 80 bucks, so you would pay the commission on that, and not 100 dollars.

Yes, I thought that is what I posted. Good to know it is on net profit on the race, not on each individual bet.

[cj]

The Premium Charge only applies if you have a profit of greater than 250K lifetime and in a quarter, your commission paid is less than 20% of your profits.

I think it is tough to complain about the increased commission at those rates of profit.

[bob60566]

Maybe Exchange betting will clean up the industry, bring in larger fields and reduce the takeout at all tracks with increase in attendance at the tracks there will be less hot dog beer incentives.

Mac:ThmbDown: :ThmbDown: :ThmbDown:

[duncan04]

Exchange wagering cleaning up the industry? Are you serious

[edmond1]

Quote:
Originally Posted by Canarsie
Wasn't there a guy from Canada who posted within the past year that Betfair charged him a surcharge for winning? I wonder if that principle will be the same in this great country of ours.



Some One replies: "The Premium Charge only applies if you have a profit of greater than 250K lifetime and in a quarter, your commission paid is less than 20% of your profits."

I am the one that is in that club. What Some One is saying is inaccurate. The rules are as follows

"Premium Charge Summary

You will only be considered for the Premium Charge if, over the lifetime of your account, you satisfy the following criteria:

Your account is in profit;
Your total charges generated are less than 20%† of gross profits; and
You bet in more than 250 markets.
Two further conditions reduce the likelihood that you will be required to pay the Premium Charge:

Any single win that constitutes more than 50% of your gross profits over the lifetime of your account will be excluded from the calculation; and
Each customer will have a lifetime allowance of £1,000 against the Premium Charge.
Each week the customers who meet all the conditions set out above will be charged the lesser of:

The difference between 20%† of the previous week’s gross profits and the total charges generated during the week; and
The difference between 20%† of gross profits and the total charges generated during the lifetime of the account."

I would know. I was not up over 250K(pounds) and was docked thousands in premium charges. That's why most of my bets now are on BetDaq and Betmaker. Liquidity not as good but suits my needs.







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[bob60566]

Exchange wagering cleaning up the industry? Are you serious
On the Hot Dogs and beer.

Mac:) :) :)

[BreadandButter]

Quote:

You will only be considered for the Premium Charge if, over the lifetime of your account, you satisfy the following criteria:

Your account is in profit;
Your total charges generated are less than 20%† of gross profits; and
You bet in more than 250 markets.
Two further conditions reduce the likelihood that you will be required to pay the Premium Charge:

Any single win that constitutes more than 50% of your gross profits over the lifetime of your account will be excluded from the calculation; and
Each customer will have a lifetime allowance of £1,000 against the Premium Charge.
Each week the customers who meet all the conditions set out above will be charged the lesser of:

The difference between 20%† of the previous week’s gross profits and the total charges generated during the week; and
The difference between 20%† of gross profits and the total charges generated during the lifetime of the account."



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Anyone who's account shows a profit and has made more than 250 bets over the lifetime of the account would then be paying 20% commissions. Therefore does it really matter what the initial commission charges are? So what if it starts out at 5%, 10%, 15% anyone that wins will end up paying 20% with these rules.

[BreadandButter]

I think it is tough to complain about the increased commission at those rates of profit.

$250k lifetime?

Betfair has been around appx 10 years - so someone that has been grinding out a profit of $25k a year would be hit with commission rate of 40 to 60%?

Starting to sound more and more like an old Vegas book.

This is suppose to grow the game?

[usedtolovetvg]

Anyone who's account shows a profit and has made more than 250 bets over the lifetime of the account would then be paying 20% commissions. Therefore does it really matter what the initial commission charges are? So what if it starts out at 5%, 10%, 15% anyone that wins will end up paying 20% with these rules.

And what % of these premium charges are returned to the tracks?

[bob60566]

And what % of these premium charges are returned to the tracks?

Hot Dog and beer sales for those that show up.
With free admission and $4 DRF enjoy

Mac:ThmbDown: :ThmbDown: :ThmbDown:

[Some_One]

Anyone who's account shows a profit and has made more than 250 bets over the lifetime of the account would then be paying 20% commissions. Therefore does it really matter what the initial commission charges are? So what if it starts out at 5%, 10%, 15% anyone that wins will end up paying 20% with these rules.

I'm sorry, the 250K in my head comes from this section
†Premium Charges at higher rates

Higher rates of Premium Charge will apply to the very small number of customers (less than 0.1%) that satisfy the following conditions over the lifetime of their account:
Lifetime net profits*** exceed £250,000
Commission generated less than 40% of lifetime gross profits
Bet in more than 1,000 markets

[Dave Schwartz]

Betfair has been around appx 10 years - so someone that has been grinding out a profit of $25k a year would be hit with commission rate of 40 to 60%?

Starting to sound more and more like an old Vegas book.

This is suppose to grow the game?

No, it is supposed to make BetFair money.

[AndyC]

No, it is supposed to make BetFair money.

Aren't you in business to make money? It would ridiculous for Betfair or any other exchange not to want to grow business.

It will grow the game simply because it will offer a superior alternative to betting the tote.

[duncan04]

Aren't you in business to make money? It would ridiculous for Betfair or any other exchange not to want to grow business.

It will grow the game simply because it will offer a superior alternative to betting the tote.

I don't think it will grow the game as much as people predict

[cj]

$250k lifetime?

Betfair has been around appx 10 years - so someone that has been grinding out a profit of $25k a year would be hit with commission rate of 40 to 60%?

Starting to sound more and more like an old Vegas book.

This is suppose to grow the game?

I'm pretty sure 250,000 pounds is at least 400,000 dollars, but I haven't looked lately. I'm not sure how strict they are or the exact rules, but I'd be willing to find out.

I don't think anyone is talking about having betting exchanges in the US that are set up exactly like Betfair. The tracks would surely get a cut. I don't know what they pay to tracks right now overseas, but I'm sure someone can fill us in.

[horses4courses]

I'm pretty sure 250,000 pounds is at least 400,000 dollars

Not quite, but you're right in the ballpark.
Current rate is around $1.58 to the pound, which would make that $395k.

[usedtolovetvg]

I don't think anyone is talking about having betting exchanges in the US that are set up exactly like Betfair. The tracks would surely get a cut. I don't know what they pay to tracks right now overseas, but I'm sure someone can fill us in.

I believe the business model is BF gives the tracks .5% out of their 5% commission.

[cj]

I believe the business model is BF gives the tracks .5% out of their 5% commission.

Tracks here would certainly need a better deal than that. Hopefully they are a lot smarter than they were when simulcasting first came to be.

[classhandicapper]

Tracks here would certainly need a better deal than that. Hopefully they are a lot smarter than they were when simulcasting first came to be.

Perhaps the tracks should set up their own national exchange.

[cj]

Perhaps the tracks should set up their own national exchange.

They certainly should, but I have very little faith they can do it, and if somehow it happens I have even less faith it would be done right.

[AndyC]

I believe the business model is BF gives the tracks .5% out of their 5% commission.

I don't believe that is the model suggested for California by Betfair.

[AndyC]

I don't think it will grow the game as much as people predict

I know what won't grow the game, the status quo.

Trying and failing is better than doing nothing.

[FenceBored]

I don't believe that is the model suggested for California by Betfair.

Correct.

A recent article in the San Francisco Chronicle said TVG Betfair is proposing a 10% commission, two-thirds of which would go to racing and one-third to Betfair. Racetracks, horsemen, and others would then split the two-thirds according to regulations and contracts.
Read more: http://www.bloodhorse.com/horse-racing/articles/66473/tvg-betfair-to-demonstrate-exchange-bet-model#ixzz1mNOxaWiw

[usedtolovetvg]

I don't believe that is the model suggested for California by Betfair.

I was responding to the question about overseas. The U.S. model is being worked out. Having read what I have about the Betfair Euro business and knowing what I know about Betfair/TVG, I would say we should tread carefully with these guys.