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Old 06-17-2011, 07:43 PM   #1
rwwupl
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Betting Exchanges and Hype

This is the Offshore Gaming Association View (OSGA)

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http://www.osga.com/artman/publish/article_9212.shtml

Excerpt:

Betting Exchanges Haven’t Lived Up to the Early Hype
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By Hartley Henderson - Exclusive to OSGA
Jun 17, 2011, 11:13



In 2000 Betfair started operations and the concept was expected to revolutionalize the way bettors wagered online. Unlike traditional bookmakers who would offer lines, Betfair allowed bettors to set lines and wager against each other. Bettors could either take the line offered to them by other bettors or they could offer odds themselves which other bettors could take. Moreover betting was allowed while events were occurring which was unique since bookmakers always close bets at the start of the event. Since bettors are wagering against each other, theoretically there is no vig incorporated into the bets and thus the odds to both sides of the bet are better than they can get with a traditional bookie. According to Betfair, odds are generally 20% higher than traditional bookmaker lines. The exchanges take a commission on winning bets and thus assume no risk themselves.

While Betfair is the largest betting exchange it wasn’t the first to offer a product where bettors could back or lay odds. World Sports Exchange (WSEX) put up markets where teams/contestants would have a buy and ask associated with them. Each bet was for $100 so if a team was listed at say 20-25 bettors could buy the team for $25 and if it won they would collect $100, so essentially they were getting 3/1 odds. Alternatively bettors could take the other side and risk $100 to win $20 so essentially bettors laying 1/4 odds. Most sporting events where the markets were offered were adjusted throughout the game/contest so bettors always had a chance to hedge. Naturally the difference in the bid and ask is WSEX’s commission. The concept came to the company’s founders while working on the Pacific Stock Exchange. The product was very successful and still is somewhat although WSEX has been affected greatly by the UIGEA. Volume for most markets has definitely decreased and WSEX will be the first to admit that fixed odds betting was still more popular than the markets on the site at any point.

More at website...
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Old 06-17-2011, 08:08 PM   #2
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i agree with these guys writing the story. betfair is a bunch of malarchy. it will ruin whatever horseracing we have here. there is no such thing as one us players ever getting the best out of it in betfair. the guys on the otherside of the computer punching away are as pro as pro can be. they are making no mistakes.

i know this because when they first started i had a friend that lived in england bet first time starters that i gave him that i knew were good. when he first started betting he gpt a very big market for his money, he got down for 7 or 8 hundred pounds. 3 weeks later they wouldn't match 10 pounds for him. not only that the money seemed to find its way back to the track. i know that because i had him bet 10 pounds on a horse i knew was no good and the horse went off less than half of what it should have.

they should tell betfair to take a hiike and go scam the rest of the world.
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Old 06-17-2011, 08:13 PM   #3
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Quote:
Originally Posted by lamboguy

they should tell betfair to take a hiike and go scam the rest of the world.



AMEN.
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Old 06-18-2011, 11:25 AM   #4
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Quote:
Originally Posted by lamboguy
there is no such thing as one us players ever getting the best out of it in betfair. the guys on the otherside of the computer punching away are as pro as pro can be. they are making no mistakes.

i know this because when they first started i had a friend that lived in england bet first time starters that i gave him that i knew were good. when he first started betting he gpt a very big market for his money, he got down for 7 or 8 hundred pounds. 3 weeks later they wouldn't match 10 pounds for him. not only that the money seemed to find its way back to the track. i know that because i had him bet 10 pounds on a horse i knew was no good and the horse went off less than half of what it should have.

they should tell betfair to take a hiike and go scam the rest of the world.
I can't agree with any of this.

If I place a bet at the exchange it's always because I am getting a better price than I could get at the track (sometimes much better). If even one of those horses wins (and many do), I made extra money.

If my money sometimes makes it back to the track and lowers the odds on the horse (which in big markets won't happen often), I am in an even better position than if I bet it straight into that pool to begin with because I am already locked in at the higher price.

If the other players are sharp and there's no extra value to be had on a lot of races, so be it. Then bet straight into the pools. But when extra value is available, it's a great thing and can make the difference between winning or losing or winning a little and winning a lot.

What you have to be careful about is booking bets. Some sharp players with inside information may put up large sums at odds slightly below track odds hoping to tempt players into booking large sums of bets. They could then get down a large bet on the horse at odds that are HIGHER than if they had bet straight into the pool.
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Old 06-18-2011, 11:32 AM   #5
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this is the connect that needs to be made


betting exchange is not bad at all. in fact it's great

what's bad is the track isn't getting any money

why can't the track itself offer some form of this. everyone wins.
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Old 06-18-2011, 11:58 AM   #6
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if i want to bet my horse running in the 5th race at belmont today i walk up to the window and plunk down my $1000 and walk away with a ticket and then i am at the mercy of the parimutual system. if i go to betfair and try to bet $100 i might not get faded for my bet. some guy on the otherside of the computer might think i have the right horse and he is not interested in booking my action at the price he put up. he might take $5 of my bet or even less.

this is not anything new to the world of horseracing. if you are an idiot and lose all the time you can bet as much as you want until you run out of money. in the old days of non-parimutual racing in nevada the same thing happened all the time. you walk up to the window and you can bet on any horse in the race except the one you want.

how many people remember the days that the bookmakers in vegas put up out prices on championship fights. meaning you can bet against marvin hagler on fulgenito obelmejes and get 3-1 odds for your money, but you cannot bet on marvelous marvin hagler because he is going to knock the other guy out. but there is no problem if you want to bet the loser in this case, they will take all you want and rob you. its the very same thing with bet fair. the horseracing game don't need betfair for nothing.
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Old 06-18-2011, 12:17 PM   #7
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IMHO, the Betfair approach will fail in the U.S. because there is no effective way to bet exotics.
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Old 06-18-2011, 12:34 PM   #8
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Quote:
Originally Posted by Dave Schwartz
IMHO, the Betfair approach will fail in the U.S. because there is no effective way to bet exotics.
It greatly compliments exotic betting.

I don't understand this anti-Betfair attitude. I've never met anybody who's ever used it that dislikes it. It's just way better than the tote or the bookmakers.
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Old 06-18-2011, 01:38 PM   #9
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A poorly research article in my opinion.

Quote:
Often someone will put in an offer of say 100/1 on a 2/1 favorite not understanding fully how the exchange works and when it’s matched they are on the hook for a massive liability.
Firstly, in a liquid market, the offer (lay) will hit the highest bids (back) until the lay is fully exercised, if possible. It would be truly illiquid market that the 100/1 lay would be match at that price. Also, your account would have to contain funds greater than the liability been entered into (100 times the staked amount). Secondly, there are plenty of options in the interface that show what liability you are entering in to before the bet is placed. Thirdly, by the default the web interface to Betfair asks you to confirm before you place the bet. Lastly, arguing there is a weakness in the product when the user doesn't understand what they are doing is a bizarre argument.

Quote:
Consequently if they bet at 10/1 and it goes off at 3/1 they still get the 10/1 odds honored. There is no way Betfair, eHorse or any exchange can offer
While Betfair doesn't have a best odds guarantee, you can choose to accept the Betfair calculated starting price (SP), so if the market moves in your favor you will receive the larger price. It's certainly not the flexibility that a best odds guarantee provides, but those bookmaker prices are almost always shorter than the Betfair SP and certainly on longshots.

Betfair's premium commission rate is certainly a hindrance to the large players, but the liquidity and flexibility the platform offers is of course a major attraction to many.

As to the performance of the stock, gambling is still a heavily-regulated market with a distinct lack of governmental and indeed popular support. With the recent online poker crackdown, the future still doesn't look too rosy for online betting services. Betfair still has significant fixed costs keeping the platform running.

This last point is the main reason I think an industry-led (and built) exchange is not possible. While the technology to get a basic exchange up and running would cost a few million, acquiring, keeping and rewarding the technical talent with the knowledge to scale the platform to the level required for a US-wide betting exchange to be completely stable is something I don't believe the industry has a stomach for. As shown through takeout increases, with so many competing interests scrambling for whatever part of the pie they can get, I can't see the exchange getting the funds required to operate with the low commission rates being touted.
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Old 06-18-2011, 01:50 PM   #10
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Quote:
Originally Posted by lamboguy
if i want to bet my horse running in the 5th race at belmont today i walk up to the window and plunk down my $1000 and walk away with a ticket and then i am at the mercy of the parimutual system. if i go to betfair and try to bet $100 i might not get faded for my bet. some guy on the otherside of the computer might think i have the right horse and he is not interested in booking my action at the price he put up. he might take $5 of my bet or even less.

this is not anything new to the world of horseracing. if you are an idiot and lose all the time you can bet as much as you want until you run out of money. in the old days of non-parimutual racing in nevada the same thing happened all the time. you walk up to the window and you can bet on any horse in the race except the one you want.

how many people remember the days that the bookmakers in vegas put up out prices on championship fights. meaning you can bet against marvin hagler on fulgenito obelmejes and get 3-1 odds for your money, but you cannot bet on marvelous marvin hagler because he is going to knock the other guy out. but there is no problem if you want to bet the loser in this case, they will take all you want and rob you. its the very same thing with bet fair. the horseracing game don't need betfair for nothing.

RIGHT ON!! LAMBO
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Old 06-18-2011, 07:13 PM   #11
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I primarily bet during the winter on steeplechasing in the UK,i use Betfair and find it brilliant,you put up the odds u want and hopefully get matched!!!!
There are alot of sharks out there...and they do use Betfair,but as a working model i cant see it working in the USA
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Old 06-18-2011, 08:27 PM   #12
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The article states that the Betfair concept never took off in the United States...eventhough several companies have presented this product to U.S. residents in the past.

Who were those companies...and why didn't they do a better job advertising this product?

If a horse racing degenerate like me never heard of these companies...how could the NORMAL people be expected to know of their existence?
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Old 06-18-2011, 08:38 PM   #13
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Quote:
Originally Posted by Dave Schwartz
IMHO, the Betfair approach will fail in the U.S. because there is no effective way to bet exotics.
Who said Betfair must provide everything? It's clear that their bread and butter is the win/place markets, and the tracks can still keep their moneymaking 30% takeout super exotics.
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Old 06-18-2011, 08:42 PM   #14
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Quote:
Originally Posted by lamboguy
if i want to bet my horse running in the 5th race at belmont today i walk up to the window and plunk down my $1000 and walk away with a ticket and then i am at the mercy of the parimutual system. if i go to betfair and try to bet $100 i might not get faded for my bet. some guy on the otherside of the computer might think i have the right horse and he is not interested in booking my action at the price he put up. he might take $5 of my bet or even less.
With all due respect this is all nonsense.

Have you ever even made a bet on an exchange?

If you want to bet $1000 and $1000 and it's available at the price you want you can get down your bet no matter who you are. If it's not available at the price you want, so be it.

I want to buy stocks all the time for $5 a share less than the current price but no one wants my action there either.

That's the way markets work.

You look at the market and make a decision. If something is attractive, you bet. If nothing is attractive, you don't bet. That's no different than looking at the price on a tote board and deciding if you want to bet or not, but you have the added advantage of occasionally getting a better price and locking in that price without the risk of the odds falling on the last flash.

If you are so anxious to get a bet in at any price or if the price at the track is superior, you still have the option of participating in the regular pools.

Exchange wagering may never totally replace pari mutual wagering because of exotics, but it's a great incremental option for players that play WIN, PLACE, and SHOW right now.

The main issue is how to keep the business model viable, attractive to players, and still be able to share some money with the tracks.
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Old 06-18-2011, 09:39 PM   #15
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Quote:
Originally Posted by classhandicapper
With all due respect this is all nonsense.

Have you ever even made a bet on an exchange?

If you want to bet $1000 and $1000 and it's available at the price you want you can get down your bet no matter who you are. If it's not available at the price you want, so be it.

I want to buy stocks all the time for $5 a share less than the current price but no one wants my action there either.

That's the way markets work.

You look at the market and make a decision. If something is attractive, you bet. If nothing is attractive, you don't bet. That's no different than looking at the price on a tote board and deciding if you want to bet or not, but you have the added advantage of occasionally getting a better price and locking in that price without the risk of the odds falling on the last flash.

If you are so anxious to get a bet in at any price or if the price at the track is superior, you still have the option of participating in the regular pools.

Exchange wagering may never totally replace pari mutual wagering because of exotics, but it's a great incremental option for players that play WIN, PLACE, and SHOW right now.

The main issue is how to keep the business model viable, attractive to players, and still be able to share some money with the tracks.
please, i have been wagering on horses for 40 years. its not legal for me being a resident of the united states to personally make a wager on betfair. i explained on this thread what happened with a friend of mine that is 100% square guy in england. let me explain this to you so you might understand this perfectly clear, betfair did not spend all this time and money to put up a platform for anyone to take money out of their system that is not tied in with betfair itself. i would not doubt for one minute that if i were to get matched with betfair that its not one of their own personal computers there to take my money.

if i were to play stake races i am sure i would never have a problem with betfair. i play maiden races full of first time starters. whatever i could get matched in those races aren't worth the time and effort to bother with them.

the question i have for you since you think you know so much about betfarir is have you ever got down for a $200 bet on a first time starter running in any nyra track?
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