Betting Exchange Does It Again

[usedtolovetvg]

http://www.racingpost.com/news/horse-racing/george-prodromou-charlotte-kerton-prodromou-warned-off-for-eight-years/991432/

Our guys are so much more devious over here. Bring in Betfair! The crooks are licking there licks.

[David-LV]

You will read about a betting scam a week if they ever let this type of betting come to the United States.


__________
David-LV

[hencicleva]

You will read about a betting scam a week if they ever let this type of betting come to the United States.


__________
David-LV

Much better to hide the corruption within the parimutuel so we don't have to read about it I guess.

[cj]

Exactly, Betfair actually does a good job and assists in catching the crooks.

[AndyC]

Most people can't even recall the last time a trainer was caught in a scam when the tote was involved. Why? because it is so darn easy to cheat through the tote and not get caught. The fact that a trainer got caught proves that the exchanges work and provide an audit trail to catch the cheaters.

[PhantomOnTour]

So the cheaters will continue to do it through the tote, right?
How is exchange wagering going to expose them?

[JBmadera]

Most people can't even recall the last time a trainer was caught in a scam when the tote was involved. Why? because it is so darn easy to cheat through the tote and not get caught. The fact that a trainer got caught proves that the exchanges work and provide an audit trail to catch the cheaters.


can you expound upon this a bit more, I'm confused....... :eek:

thank you!

[cj]

So the cheaters will continue to do it through the tote, right?
How is exchange wagering going to expose them?

The same way it did here. When things look funny on the exchange, it is investigated. It is a bit easier than it is with parimutuel betting to identify who profited. I'm not saying that it is perfect, of course not, but it isn't as easy to cheat as some would have you believe. People are watching.

[PhantomOnTour]

The same way it did here. When things look funny on the exchange, it is investigated. It is a bit easier than it is with parimutuel betting to identify who profited. I'm not saying that it is perfect, of course not, but it isn't as easy to cheat as some would have you believe. People are watching.
But if the cheaters stay in the pari mutuel pools what is gonna look funny on the exchange?
Nothing.

Stay out of the exchanges and it's biz as usual right?

[cj]

But if the cheaters stay in the pari mutuel pools what is gonna look funny on the exchange?
Nothing.

Stay out of the exchanges and it's biz as usual right?

Of course the difference is you can bet horses to lose in the exchange, that is where people get caught.

[classhandicapper]

I'm sure this kind of stuff happens all the time in the parimutuel pools also. Instead of laying the horse, they just bet on someone else, leave him off in the multi race tickets, or box some of the other contenders. It's not as neat as booking a bet on a horse you know will lose (potentially at a higher price to tempt more people to bet him), but the end result is the same and there's not much evidence of wrong doing. On the exchange, they can at least see if there was a lot of extra money available on that specific horse.

[pondman]

There are a hundred ways to intentionally lose a race. But you aren't going to know. It's a daily thing at mountaineer.

There are fewer ways to win. Occasionally there is cooperation in the U.S.-- passing the hat around to pay the electric bill. Excluding drug testing, this is difficult to catch.

Don't know what this has to do with exchange betting, unless the connections are actively betting on the exchange. It's not going to clean up the game any.

[AndyC]

can you expound upon this a bit more, I'm confused....... :eek:

thank you!

How does a trainer use the exchange to make a score? He can't bet himself because that is illegal. He can't use a friend because that would be too obvious. He can't use a person who doesn't have a history of betting large amounts on the exchange. So he must have a co-conspirator who he doesn't have a clear link with. Sounds easy, huh?

As I pointed out previously, give me one race per week where I knew that a favorite would run out of the money and I would be retiring to my own island in the Caribbean. All because of the tote.

[Robert Goren]

I don't why anybody would think that parimutuel pools and exchange betting can co-exist. I am pretty sure one or the other would die off pretty quick.

[usedtolovetvg]

Of course the difference is you can bet horses to lose in the exchange, that is where people get caught.

The question is whether or not Betfair chooses to expose all those races that appear questionable. I have read that some on the European boards wonder whether or not they do this. Also since Betfair has their own bots on their own exchange, is there anyone naive enough to believe that Betfair would expose a crooked race if it worked to their advantage.

[AndyC]

The question is whether or not Betfair chooses to expose all those races that appear questionable. I have read that some on the European boards wonder whether or not they do this. Also since Betfair has their own bots on their own exchange, is there anyone naive enough to believe that Betfair would expose a crooked race if it worked to their advantage.

If Betfair would be operating under the rules of California racing why would California sign any agreement that didn't allow for full disclosure of any betting info? I don't think Betfair holds the cards on this one.

[AndyC]

I don't why anybody would think that parimutuel pools and exchange betting can co-exist. I am pretty sure one or the other would die off pretty quick.

Currently roughly 25% of the handle is W-P-S in California. The exchanges cannot currently provide for any other of the types of bets that make up the other 75% of the handle so the tote will live on. As for W-P-S betting the vast majority of bettors will not want to go into the marketplace and hunt for a price. For them it will be $20 to win on the 5 horse and get me another cold one. The tote and exchange will actually work in a synergistic manner.

[edmond1]

I don't why anybody would think that parimutuel pools and exchange betting can co-exist. I am pretty sure one or the other would die off pretty quick.

You are absolutely correct. Before I joined Betfair in 2005 I was a die hard pari-mutual bettor for 30 years. Now 99.9 % of my betting takes place on betting exchanges. I have very little interest in getting robbed - 28 % takeouts ???????? Other people like myself that I referred to Betfair are in the same boat. A couple even quit betting horses altogether.

[Fager Fan]

Most people can't even recall the last time a trainer was caught in a scam when the tote was involved. Why? because it is so darn easy to cheat through the tote and not get caught. The fact that a trainer got caught proves that the exchanges work and provide an audit trail to catch the cheaters.

What horse to lose are they betting?

[AndyC]

What horse to lose are they betting?

You don't need to bet a horse to lose as would be required using an exchange. It is sufficient enough to know that a favorite will not win or run in the money. It is much easier and cheaper to make a score using the tote than trying to run a large lay bet through the exchange.

[AndyC]

You are absolutely correct. Before I joined Betfair in 2005 I was a die hard pari-mutual bettor for 30 years. Now 99.9 % of my betting takes place on betting exchanges. I have very little interest in getting robbed - 28 % takeouts ???????? Other people like myself that I referred to Betfair are in the same boat. A couple even quit betting horses altogether.

Of course tote betting would die out if the W-P-S takeout rate was 28% but that simply isn't the case in the US.

[highnote]

Here is a problem I have with betfair.

Let's say you make a mistake on a lay bet. You meant to lay 100 dollars on an extreme favorite and offer odds of 0.1 to 1. If your horse loses you win $100. If it wins, you lose $10. By mistake, you actually lay at 10-1. So now you have a liability of $1000 if the horse wins. If it loses, you still make $100.

So the horse wins and you are out $1000. You try to tell betfair you made a mistake. They do nothing to help you. Too bad. You are responsible.

Now, put the shoe on the other foot. This actually happened.

http://community.betfair.com/horse_racing/go/thread/view/94102/28810977/betfair-will-not-reveal-technical-glitch-details

You can google "betfair computer glitch leopardstown" for more info.

http://www.mirror.co.uk/sport/horse-racing/betting-firm-refuses-to-pay-out-188226

Betfair claim they had a glitch in their software and backers could get something like 30-1 on a big favorite to win. This meant layers had a major liability on their hands. Well, the horse won. Backers of the horse stood to make something like 20 million dollars. Betfair would not pay off on the bet because they said their computers malfunctioned.

I say they should pay off the wager. It's only a fraction of what they claim to make per day.

If they can decide not to honor a bet they have offered and accepted after the outcome is known then they have no credibility.

If everytime they have a bad outcome they can blame it on a computer glitch then they have no credibility.

Would it be prudent for them to insure against this type of bad outcome the way Floridians insure against hurricane damage?

One theory is that a betting bot gone awry caused the problem. The glitch may have been in a bot operated by betfair. This may be the reason they will not detail the nature of the glitch.

If the horse had lost would betfair have returned the money? Would they have even known about the alleged "error"?

Caveat emptor.

[usedtolovetvg]

this is the transparency or lack thereof that is a major concern. they claim the bet was made by a minor player who had less than 1000 pounds in his account. betfair has readily admitted that they have their own 'bots' operating to add liquidity. if a betfair 'bot' decided that voler de vedette would be a great lay bet and took on all comers betfair should have paid. betfair claimed it was a computer glitch with an unidentified minor player. so much for transparency. one has to wonder how many times the 'bot' made the right decision and betfair kept the money. how in the world can betfair be operating as facilitator and player? that's screams of conflict of interest regardless of what caused the leopardstown fiasco. if you do a little research on these guys you find scandal after scandal. i guess these are the kind of people that we love here in america. c'mon, how can you not trust a company that operates out of gibraltar and is licensed in malta?

[highnote]

http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/6074153/Betfair-ponders-1.5bn-flotation-after-shareholders-call-in-bankers-for-talks.html

David Yu, Betfair's chief executive, said some two billion bets were placed on the exchange last year, an average of 6.4m trades a day, more than on all European stock exchanges.

Two BILLION bets made on the betfair exchange. Seems like 20 mil should be a drop in the bucket for the company.




this is the transparency or lack thereof that is a major concern. they claim the bet was made by a minor player who had less than 1000 pounds in his account. betfair has readily admitted that they have their own 'bots' operating to add liquidity. if a betfair 'bot' decided that voler de vedette would be a great lay bet and took on all comers betfair should have paid. betfair claimed it was a computer glitch with an unidentified minor player. so much for transparency. one has to wonder how many times the 'bot' made the right decision and betfair kept the money. how in the world can betfair be operating as facilitator and player? that's screams of conflict of interest regardless of what caused the leopardstown fiasco. if you do a little research on these guys you find scandal after scandal. i guess these are the kind of people that we love here in america. c'mon, how can you not trust a company that operates out of gibraltar and is licensed in malta?

[usedtolovetvg]

that should be david yu ex-ceo, along with edward wray ex-chairman, along with andrew twaits ex-ceo australia. something about rats and a sinking ship. oh yeah, the stock price is down about 40% from its ipo. like i said, how can you not love a company that operates out of gibraltar and is licensed in malta? just do a a tiny bit of research on a company before you hop into bed with it.

[Canarsie]

that should be david yu ex-ceo, along with edward wray ex-chairman, along with andrew twaits ex-ceo australia. something about rats and a sinking ship. oh yeah, the stock price is down about 40% from its ipo. like i said, how can you not love a company that operates out of gibraltar and is licensed in malta? just do a a tiny bit of research on a company before you hop into bed with it.

To be fair many other companies have done the same thing involving UK taxes.

http://www.guardian.co.uk/business/2011/mar/08/betfair-to-use-gibraltar-licence-avoid-uk-tax

It's no different from here getting tax breaks if your based outside the U.S. There's also a reason a majority of U.S. corporations base themselves in Delaware.

If you ran a company and could take advantage of a tax break or loophole you would be nuts not to use it.

[cj]

Plenty of HUGE US companies do the same thing.

[usedtolovetvg]

To be fair many other companies have done the same thing involving UK taxes.

http://www.guardian.co.uk/business/2011/mar/08/betfair-to-use-gibraltar-licence-avoid-uk-tax

It's no different from here getting tax breaks if your based outside the U.S. There's also a reason a majority of U.S. corporations base themselves in Delaware.

If you ran a company and could take advantage of a tax break or loophole you would be nuts not to use it.

ok, i might buy that but the departure of any company's 3 top execs would be a huge red flag.

[cj]

ok, i might buy that but the departure of any company's 3 top execs would be a huge red flag.

Between your user name and your posts, I have to ask, what association have you had with TVG/Betfair in the past. You sure don't sound like a horseplayer, but rather someone with an axe to grind.

I'm not saying it makes you right or wrong, for the record.

[usedtolovetvg]

i don't believe betfair has been good for racing anywhere they have set up shop; good for the punter, for sure, but bad for the industry. the laying off of all the, let us say, mature employees saddened me. that, i believe, has not been good for either the industry or fan. btw, i fire away with both fists.

[cj]

i don't believe betfair has been good for racing anywhere they have set up shop; good for the punter, for sure, but bad for the industry. the laying off of all the, let us say, mature employees saddened me. that, i believe, has not been good for either the industry or fan. btw, i fire away with both fists.

That is fine, and I'll take that as I deflection of my question.

[usedtolovetvg]

i will tell you that i may be privy to certain facts that would require 3rd party corroboration from someone much more respected than me. so, i limit my posts to statements of fact. i challenge anyone to prove that what i say is not true. i also separate what is my opinion from that which is factual information.

[thaskalos]

i don't believe betfair has been good for racing anywhere they have set up shop; good for the punter, for sure, but bad for the industry.
I think it's about time the industry stopped concerning themselves solely with what is good for them...and started thinking a little bit about what is good for the "punter".

The way this game is spread right now, the horseplayer is an afterthought...and if that doesn't change soon, thoroughbred racing will end up in the same place with its harness racing cousin.

When is horse racing going to realize what all the other businesses know from the start; that the customer is a business's most valuable commodity?

[usedtolovetvg]

I think it's about time the industry stopped concerning themselves solely with what is good for them...and started thinking a little bit about what is good for the "punter".

The way this game is spread right now, the horseplayer is an afterthought...and if that doesn't change soon, thoroughbred racing will end up in the same place with its harness racing cousin.

When is horse racing going to realize what all the other businesses know from the start; that the customer is a business's most valuable commodity?

the question is whether or not the industry can survive given the low margins ew currently demands? if it costs you $10 to make a pair of jeans you cannot sell them at $5. you would go broke. as the margins go up, the difference between the tote and the odds offered on the exchange would go down. maybe,the consumer is not willing to pay the price that it takes to put on the races. the exchange currently has no vested interest in putting on this product. it is like they are getting those jeans for free. then anything they make is profit. given the lower margins offered by other forms of gambling, maybe the consumer will not pay the price. if racing can't lower its costs, i don't see how it can survive in an exchange environment.

[thaskalos]

the question is whether or not the industry can survive given the low margins ew currently demands?.

I disagree!

There is another question which begs to be answered, and that is:

How long can the average horseplayer be expected to survive under today's unfriendly (for him) wagering landscape?

If not EW...then what?

Will this industry wait until the mutuel pools are reduced to nothing before they provide some much-needed relief to the long-suffering player?

[usedtolovetvg]

I disagree!

There is another question which begs to be answered, and that is:

How long can the average horseplayer be expected to survive under today's unfriendly (for him) wagering landscape?

If not EW...then what?

Will this industry wait until the mutuel pools are reduced to nothing before they provide some much-needed relief to the long-suffering player?

i think the game just may be too expensive in this day and age. as someone who takes a flutter now and then, i am all for ew, the problem is i cannot see where it has helped the sport in the jurisdictions it has been allowed. i would love to be proven wrong.

[Native Texan III]

i think the game just may be too expensive in this day and age. as someone who takes a flutter now and then, i am all for ew, the problem is i cannot see where it has helped the sport in the jurisdictions it has been allowed. i would love to be proven wrong.

Betfair in UK voluntarily pay horseracing levy on UK racing, even though registered in Gibraltar. They sponsor major UK races. They have taken over Timeform and provide free race card data and stats. Only Betfair have memorandas of understanding to release betting data to cooperate with officials trying to stamp out corruption - bookmakers will not cooperate at all. Public can generally get bets on at agreed and better prices with minimal takeout. That keeps more people in the game. It is not their job to fund the sport but they certainly have a track record of helping where they can.

[highnote]

My opinion has always been that racetracks need to run their own exchanges. They used to have control over their own betting. Why should they let an outside entity take bets for them?

If a racetrack keeps the exchange in-house it keeps more profits. It doesn't take much to run an exchange for one track. The cost of the software is negligible. I can't imagine it takes more than a half-dozen employees to run it.

The biggest problem I can see is that people who offer odds on horses to other bettors are bookmakers. NY banned bookmakers many years ago. The law would need to be changed.

Also, NY has a history of not allowing big winning bettors to bet on their product. This policy goes all the way back to Pittsburgh Phil.

Now NY has slots. What incentive do they have to be progressive?

[cj]

My opinion has always been that racetracks need to run their own exchanges. They used to have control over their own betting. Why should they let an outside entity take bets for them?

If a racetrack keeps the exchange in-house it keeps more profits. It doesn't take much to run an exchange for one track. The cost of the software is negligible. I can't imagine it takes more than a half-dozen employees to run it.

The biggest problem I can see is that people who offer odds on horses to other bettors are bookmakers. NY banned bookmakers many years ago. The law would need to be changed.

Also, NY has a history of not allowing big winning bettors to bet on their product. This policy goes all the way back to Pittsburgh Phil.

Now NY has slots. What incentive do they have to be progressive?

The problem with tracks taking bets is that they would have to cooperate with each other. Nobody is going to open and fund 40 different accounts to play all the tracks available. Of course it is what they SHOULD do, I am just not they it is something they CAN do.

[highnote]

The problem with tracks taking bets is that they would have to cooperate with each other. Nobody is going to open and fund 40 different accounts to play all the tracks available. Of course it is what they SHOULD do, I am just not they it is something they CAN do.


Why do tracks need to cooperate with each other? NYRA would run their own exchange, Churchill would run their own, Keeneland their own, Gulfstream their own.

It might be the case that there would never be enough liquidity on the U.S. exchanges to make exchange betting worthwhile -- especially at the minor tracks. Hard to say. Maybe the opposite is true -- the liquidity would be high?

If people want to bet badly enough then they will open an exchange account with more than one track.

Betting syndicates and whales would be willing to jump through hoops to open multiple accounts if it was profitable for them.

[cj]

Why do tracks need to cooperate with each other? NYRA would run their own exchange, Churchill would run their own, Keeneland their own, Gulfstream their own.

It might be the case that there would never be enough liquidity on the U.S. exchanges to make exchange betting worthwhile -- especially at the minor tracks. Hard to say. Maybe the opposite is true -- the liquidity would be high?

If people want to bet badly enough then they will open an exchange account with more than one track.

Betting syndicates and whales would be willing to jump through hoops to open multiple accounts if it was profitable for them.

As I said, people aren't going to open 40 accounts, one for each circuit or track. That is the reason we have ADWs already. Keeneland, without cooperation, can only offer exchange betting on Keeneland races, right? Who is going to open an account for a few weeks in April and a few in October? Maybe a some "whales" will, but are they just going to be against each other? I can tell you now not many Joe Average types are going to do it.

[davew]

The problem with tracks taking bets is that they would have to cooperate with each other. Nobody is going to open and fund 40 different accounts to play all the tracks available. Of course it is what they SHOULD do, I am just not they it is something they CAN do.

They somehow passed that hurdle allowing ADWs and each other to bet into their mutual pools. I remember 25 years ago or so, tracks would 'buy' the satelite feed and have their own pool on that race.

Remember Winning Colors and the various pay-offs around the world on the derby win?

[highnote]

As I said, people aren't going to open 40 accounts, one for each circuit or track. That is the reason we have ADWs already. Keeneland, without cooperation, can only offer exchange betting on Keeneland races, right? Who is going to open an account for a few weeks in April and a few in October? Maybe a some "whales" will, but are they just going to be against each other? I can tell you now not many Joe Average types are going to do it.


Maybe cooperation is the only way.

It sure is taking a long time to get exchange wagering in place in the U.S. What's it been -- 14 or 15 years since the concept was devised?

If I was serious about making exchange-type bets on Keeneland I'd open an account with just them. I may have a Connecticut OTB account that offers 100 different tracks, but I'm only going to bet a handful of them and probably only 2 or 3 to any meaningful extent. It wouldn't be much of an inconvenience to open three or four accounts with different tracks. The biggest challenge is that ADWs don't make it easy to open accounts. There is a lot of red tape. Maybe what is needed is something similar to multi-jurisdiction owner licenses where various jurisdiction streamline the process of getting licensed if you are already licensed somewhere else.

The same thing could work in opening accounts. If you've got an account with Belmont then you just send your credentials to Santa Anita and your account is quickly opened.

Then the tracks need to make it easy to get money into and out of an account so the money can be shuffled around quickly from place to place.

This isn't rocket science. It only requires motivation on the part of track management. That's the hard part.

[Robert Goren]

People bitch like Hell when their ADW doesn't carry a track and they have open another account someplace else. Anybody that thinks people are going open up 40 accounts to bet the ponies has been smoking some funny smelling hay. There has to be national clearing house of some sort for exchange betting to work. Besides that I doubt any track will want to set the exchange. It will be a lot easier to have some else run it for them, at least in the beginning.

[highnote]

Anybody that thinks people are going open up 40 accounts to bet the ponies has been smoking some funny smelling hay.


I don't think you will find many people who disagree with your point. However, a lot of people don't want to bet 40 different tracks. They only want to bet 2 or 3. I would open an exchange account with three different tracks if they all offered exchange wagering. Hell, I can count off the top of my head more than 10 different accounts I've had to open over the years. I'm more than 25% of the way to 40!

[usedtolovetvg]

Betfair in UK voluntarily pay horseracing levy on UK racing, even though registered in Gibraltar. They sponsor major UK races. They have taken over Timeform and provide free race card data and stats. Only Betfair have memorandas of understanding to release betting data to cooperate with officials trying to stamp out corruption - bookmakers will not cooperate at all. Public can generally get bets on at agreed and better prices with minimal takeout. That keeps more people in the game. It is not their job to fund the sport but they certainly have a track record of helping where they can.

So how do you propose that the business can survive?

[Native Texan III]

My opinion has always been that racetracks need to run their own exchanges. They used to have control over their own betting. Why should they let an outside entity take bets for them?

If a racetrack keeps the exchange in-house it keeps more profits. It doesn't take much to run an exchange for one track. The cost of the software is negligible. I can't imagine it takes more than a half-dozen employees to run it.

The biggest problem I can see is that people who offer odds on horses to other bettors are bookmakers. NY banned bookmakers many years ago. The law would need to be changed.

Also, NY has a history of not allowing big winning bettors to bet on their product. This policy goes all the way back to Pittsburgh Phil.

Now NY has slots. What incentive do they have to be progressive?

The cost of the software and maintaining Betfair hardware is astronomic - about $45M per annum.

Betfair had 150 staff in 2005 just to start off. They now have 2000 and that is growing 20% a year. It is a very complex business and no serious competitors have arisen in the last 6 years.

Private individuals can lay odds but in USA that would likely be very foreign to them and goes against the American ego trip way of winning at all costs rather than winning by others losing. The law has to be changed and already has in California and New Jersey. Probably not many will follow as vested interests rule over that of competition and customer choice. USA in betting is not a free market economy.

[Native Texan III]

So how do you propose that the business can survive?

What has the survival of the business got to do with me?

As far as the effect of Betfair is known as it operates in UK then Betfair has only about a static 6% of the market and now the PMU has been sold to a bookmaker the bookmakers have a 94% market share. They pay 15% of turnover to Government and about $100M dollars a year to racing for use of the product. Prizemoney is low but track attendances are at record highs despite very high prices. Most owners lose money and do not expect anything different. So money = survival is not the whole story. The majority of backers there still find Betfair too complex to use and use bookmakers in shops or over the internet - take out and tax free, even though the odds are generally worse.

[highnote]

The cost of the software and maintaining Betfair hardware is astronomic - about $45M per annum.


No way it would cost a racetrack $45 million per year to start a betting exchange. I've seen companies that sell or lease betting exchange software for only tens of thousands of dollars. A track only has to monitor betting for 8 to 10 races per day at their own track. It wouldn't take more than a few employees to do this.

[usedtolovetvg]

What has the survival of the business got to do with me?

So horse racing to you is a charity for BF to make money and you to punt?