New Betfair bet matching system is a step backwards.
Niall O'Connor March 15th, 2008
In fact, I will go so far as to say that it is obscene.
You can not be the exchange and also be a trader on it. The exchange has more information than anybody else, and the whole point of paying for the exchange through transaction costs is that it efficiently and fairly brings all of the market participants together.
Where the exchange, which has more information than anybody else, trades on its own account, it is simply an abuse of trust.
Thankfully, I am aware of advanced plans to counter this sort of behaviour, through the creation of “a punters exchange” that will be a non-profit organisation, and that will take enough profit in the first couple of years to set it up, but will pay all excess profits back in fees later.
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Your opinion is interesting. Thanks, Niall.
[...] While economist Michael Giberson says that the reform is a step in the right direction, trader Ed Murray makes a series of accusations against BetFair. Traders “Paul” and “Dave” have issues, too. [UPDATE: Niall O’Connor is outraged.] [...]
I’m confused by your comment. I thought the
bet matching system found new matches between customers bets. I don’t remember reading that it was an automated trader that took positions by making bets. If its only role is to find new matches between offers made by traders, then it isn’t reasonable to characterize it as the exchange trading on its own account.
Just one point, Betfair have already hired a team of traders to bet into its own markets last year, and are increasing that. Andrew Black has insisted that these traders are betting without looking at who is betting on what. I can’t understand how if 98% of Betfair punters lose overall, how they are paying the hypothetical £25,000-£30,000 a year salaries of these traders. They not only have to break even, but also have to win at least £25k to £30k a year to justify the expense of actually employing them.
I have no idea how anyone could get a straight answer out of Betfair about this. They either mothball and as happened with this new case, not even bother announcing it, or they have a record of press statements which, to be frank, have mostly been the opposite of what has happened. Mark Davies went on Radio 5 at the end of 2007 claiming that they didn’t offer any markets on Davydenko or Arguello, when in fact Betfair had been offering loads on both, after the voided Davydenko v Arguello match. The Radio 5 presenter threw him an unexpected googly live on air, which Davies wasn’t prepared for, saying "well surely if you have deemed that one player (davydenko) is not someone that you see fit to run markets on, surely the other player involved in the suspicious match is also someone you don’t take bets on". Davies stuttered, saw that it seemed completely logical, and said something very close to ‘erm,…. yes,…… we don’t offer markets on arguello either’. It simply wasn’t true.
Betfair are exploiting a total lack of regulation in sports markets to beat the clock, bet into its own pool, take a huge scoop out of the pool unannounced, change their bet matching software unannounced, etcetera. All this would be completely illegal in any financial market. I think sports markets deserve the same level of protection, and its time the FSA were compelled to step in to stop them.
This is all about Betfair’s share price. They still have a massive price/earnings ratio, and they are gambling that if they scoop an extra £15 million from the pool by placing their own robot on the markets, they can boost the value of the company by say £500 million. The people who buy these shares looking solely at the headline growth in profits are going to be gobsmacked in 2 or 3 years time that Betfair is being run as a pyramid scheme, and will wonder why company profits growth actually went into reverse in 2009, 2010 and 2011. The markets cannot sustain this level of front-running, clock-beating, trap bets, and attrition of the userbase. I just pray that the people tempted to buy Betfair shares are able to understand why the headline profits figure is going to be completely misleading for 2008.
[...] market design expert Chris Hibbert is puzzled by Niall O’Connor’s statement mentioning a…, event derivative trader Ed Murray (who made a series of accusations against BetFair) has just [...]
Ed, where did you see that BetFair had hired its own team of traders? I haven’t seen any other discussion of this online (but I don’t follow the BetFair forums closely). If I were a trader on BetFair’s exchange, it would make me a little nervous if the exchange had an in-house trading team.
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But like Chris Hibbert, I’m confused by Niall’s remarks. The new bet matching system appears to just expand the sophistication of BetFair’s system for accepting offers made by users. I could see that the new system could disadvantage some mildly sophisticated traders, who have profited by finding such arbitration matches themselves. But having the exchange automatically make such matches can improve liquidity and prices for other traders.
"Ed, where did you see that BetFair had hired its own team of traders?"  Join http://www.bettingforum.co.uk where Andrew Black posts as "Bert". He himself confirmed on there that there are in-house Betfair traders, but insisted that these traders don\’t look at who is betting on what. The posts he made related to this were in February/March ish 2007. I made it clear that letting in house traders pick off/frontrun winning accounts would be absolutely disastrous for Betfair. What we do know now though is that even a change of the magnitude brought in with the new parasite robot, which may rake in over £10 million a year for Betfair, they won\’t announce it, they\’ll just sneak it in. The same will be the case if they make the decision to allow their in house traders to start looking at who is betting on what. The logic put forward originally was that Betfair started offering "multiples" bets, with prices derived from the main markets.  These are at prices with a very wide spread, and mostly poor value, but still popular nonetheless with Joe Public (fair enough). The in house traders were supposed to hedge these into the exchange to minimise risk. Betfair has a rush to make as much money as possible by whatever means, and I have no idea if the traders are looking at who is betting on what, and placing their \’hedges\’ of the multiples accordingly. I also know someone who has been interviewed and offered one of these (unadvertised) trading positions internally to Betfair. They have kept it pretty quiet. "I haven’t seen any other discussion of this online (but I don’t follow the BetFair forums closely). If I were a trader on BetFair’s exchange, it would make me a little nervous if the exchange had an in-house trading team." Tbh, I think its pathetic. Betfair are haemorrhaging cash again this week to people beating the clock on the tennis by up to 8 seconds. (The delay BF allow users is only 5 seconds, so anyone more than 5 seconds ahead of UK users can mop up huge value). Its like chucking water out of a sinking ship with a spoon, and congratulating yourself on how hard you are working with said spoon. Betfair really need to find a way to extract money from the hooverers, thats where their goldmine is. "But like Chris Hibbert, I’m confused by Niall’s remarks. The new bet matching system appears to just expand the sophistication of BetFair’s system for accepting offers made by users." It works just about ok on stable, non in-running markets, but with in-running markets, with violent swings in the odds, it is scooping out a much greater rake from the pool than was the case previously. One semi-official "whisper" is that its on course already to make £4m a year by mismatching people\’s bets. I\’d say that it would be worth telling people they were going to be raked for £4m more a year personally,….. There are many side effects of the Betfair robot. If you submit a bet to take a price off the screen, that price won\’t be there 5 seconds later, when your bet would have been matched without the robot, if the robot can find a way to arb that bet. Many people that would have been matched now won\’t be, and there orders will be left up on the board instead. With the in-running markets, there are huge swings in probabilities of different teams/players winning throughout a match or game, and these bets being left up are then ripe to be picked off by the people using fast pictures.  If I ask for a price, I am more likely to get it with this robot, BUT I am also more likely not to get it at the time I request it (because Betfair can queue jump in the period users have to wait 5 seconds), and it will often be matched only when the odds have swung against the user who has placed it up. Time is critical.  A back of a player at a price may be at a fair value, but if he goes love 15 down on his service game, and its only then that you get matched instead, because the Betfair robot jumped in the way and took the order you would have taken, you will be shortchanged as a result of the robot.  " I could see that the new system could disadvantage some mildly sophisticated traders, who have profited by finding such arbitration matches themselves." In running markets are really fast. I don\’t think its possible for someone to place arbs on both sides in an inrunning market. It is only possible for a robot that does not have to have the same 5 second delay that everyone else has.  I have no axe to grind at all, I really don\’t think it is possible to sit there with bets going through on both sides, and expect an \’arb\’ to be there, on an inrunning event. " But having the exchange automatically make such matches can improve liquidity and prices for other traders." If a match had £100,000 lost by the people who lost before the robot was activated, Betfair would rake a maximum of £5,000 and the winners would get £95,000 or more.  Now the robot can rake not a maximum of 5% of a transaction, but anything up to and over 99%.  If Betfair are taking £10,000 instead of £5,000, every single match, then there is less money in the pot, the average winner wins less, the rate of attrition is up. The people who lose out the most are the inexperienced users who don\’t really know what they are doing (the sophisticated users will be much more savvy and careful and adapt to the robot), and its these people that Betfair need to keep on the exchange to shuffle money back and forth. Betfair need to give the mugs a run for their money.  The sad thing is there are plenty of ways to rake lots of money from the snides, the courtsiders etcetera, but this robot, which does beat the clock, actually hammers the mugs, and probably actually helps the snides to get on, when they whack through thousands of pounds on out of date prices, and now the betfair robot will look to see if there is a way to help the snides get on not just by letting the sides hoover a back on a selection, but by auto-matching the money on lays on other selections.  Really, really silly.
"Ed, where did you see that BetFair had hired its own team of traders?"
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Join <a href=\"http://www.bettingforum.co.uk/\">www.bettingforum.co.uk</a> where Andrew Black posts as "Bert". He himself confirmed on there that there are in-house Betfair traders, but insisted that these traders don\’t look at who is betting on what. The posts he made related to this were in February/March ish 2007. I made it clear that letting in house traders pick off/frontrun winning accounts would be absolutely disastrous for Betfair. What we do know now though is that even a change of the magnitude brought in with the new parasite robot, which may rake in over £10 million a year for Betfair, they won\’t announce it, they\’ll just sneak it in. The same will be the case if they make the decision to allow their in house traders to start looking at who is betting on what.Â
The logic put forward originally was that Betfair started offering "multiples" bets, with prices derived from the main markets.  These are at prices with a very wide spread, and mostly poor value, but still popular nonetheless with Joe Public (fair enough). The in house traders were supposed to hedge these into the exchange to minimise risk. Betfair has a rush to make as much money as possible by whatever means, and I have no idea if the traders are looking at who is betting on what, and placing their \’hedges\’ of the multiples accordingly. I also know someone who has been interviewed and offered one of these (unadvertised) trading positions internally to Betfair. They have kept it pretty quiet.Â
"I haven’t seen any other discussion of this online (but I don’t follow the BetFair forums closely). If I were a trader on BetFair’s exchange, it would make me a little nervous if the exchange had an in-house trading team."Tbh, I think its pathetic. Betfair are haemorrhaging cash again this week to people beating the clock on the tennis by up to 8 seconds. (The delay BF allow users is only 5 seconds, so anyone more than 5 seconds ahead of UK users can mop up huge value). Its like chucking water out of a sinking ship with a spoon, and congratulating yourself on how hard you are working with said spoon. Betfair really need to find a way to extract money from the hooverers, thats where their goldmine is.
"But like Chris Hibbert, I’m confused by Niall’s remarks. The new bet matching system appears to just expand the sophistication of BetFair’s system for accepting offers made by users."It works just about ok on stable, non in-running markets, but with in-running markets, with violent swings in the odds, it is scooping out a much greater rake from the pool than was the case previously. One semi-official "whisper" is that its on course already to make £4m a year by mismatching people\’s bets. I\’d say that it would be worth telling people they were going to be raked for £4m more a year personally,…..There are many side effects of the Betfair robot. If you submit a bet to take a price off the screen, that price won\’t be there 5 seconds later, when your bet would have been matched without the robot, if the robot can find a way to arb that bet. Many people that would have been matched now won\’t be, and there orders will be left up on the board instead. With the in-running markets, there are huge swings in probabilities of different teams/players winning throughout a match or game, and these bets being left up are then ripe to be picked off by the people using fast pictures.  If I ask for a price, I am more likely to get it with this robot, BUT I am also more likely not to get it at the time I request it (because Betfair can queue jump in the period users have to wait 5 seconds), and it will often be matched only when the odds have swung against the user who has placed it up. Time is critical.  A back of a player at a price may be at a fair value, but if he goes love 15 down on his service game, and its only then that you get matched instead, because the Betfair robot jumped in the way and took the order you would have taken, you will be shortchanged as a result of the robot. Â
" I could see that the new system could disadvantage some mildly sophisticated traders, who have profited by finding such arbitration matches themselves."In running markets are really fast. I don\’t think its possible for someone to place arbs on both sides in an inrunning market. It is only possible for a robot that does not have to have the same 5 second delay that everyone else has.  I have no axe to grind at all, I really don\’t think it is possible to sit there with bets going through on both sides, and expect an \’arb\’ to be there, on an inrunning event.Â
" But having the exchange automatically make such matches can improve liquidity and prices for other traders."If a match had £100,000 lost by the people who lost before the robot was activated, Betfair would rake a maximum of £5,000 and the winners would get £95,000 or more.  Now the robot can rake not a maximum of 5% of a transaction, but anything up to and over 99%.  If Betfair are taking £10,000 instead of £5,000, every single match, then there is less money in the pot, the average winner wins less, the rate of attrition is up. The people who lose out the most are the inexperienced users who don\’t really know what they are doing (the sophisticated users will be much more savvy and careful and adapt to the robot), and its these people that Betfair need to keep on the exchange to shuffle money back and forth. Betfair need to give the mugs a run for their money.  The sad thing is there are plenty of ways to rake lots of money from the snides, the courtsiders etcetera, but this robot, which does beat the clock, actually hammers the mugs, and probably actually helps the snides to get on, when they whack through thousands of pounds on out of date prices, and now the betfair robot will look to see if there is a way to help the snides get on not just by letting the sides hoover a back on a selection, but by auto-matching the money on lays on other selections.  Really, really silly.
"someone is 8 sec in front of sky pictures"
http://site.forum.betfair.com/.....ennis#null
see this thread on the bf forum. The betfair board are just bonkers. This is where they are losing money hand over fist - to the person/people beating the clock who looks to actually be betting from the US.
jme17 Mar 00:52obviously betting is taking place in the USA this week it is 99.99999% a certain. Therefore i ask why do betfair not look at the accounts who r 7 secs ahead of sky and 4 infront of Raw feeds? To my knowledge it is the broadcasters who r responsible - (the company that cover the MASTERS events), they are using 200k per trade and are probably making an absolute killing whilst discouraging new comers and the average joe punter who trades on here.
Now we all know it is illegal to use betfair from the USA so betfair can you go ahead and investigate these crooks and fine them heavily - $2million or more you could make from it and then you can pocket the money meaning you can scrap your silly super cheating bot and the world will be a happier place the guy has it spot on. shame the betfair board just cannot see why losing money hand over fist, wondering why they aren’t making as much money as they would like to, then retaliating by sneaking in a £10million bet mismatching robot, really is just woefully incompetent.
Some anonymous person posting on a betting forum with the "Bert" byline is not necessarily Andrew Black. If BetFair were to hire traders to operate on its own exchange, their P.R. department would have disclosed it. Furthermore, they could be asked whether it’s true. I will ask them, or somebody will ask them. HammerSmith is not the KGB. They are open people.
Dear Chris
I hope you do ask them, and I look forward to seeing their reply….
Rab,
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I have send an e-mail to a PR guy at BetFair, giving him 2 MO links, and asking whether BetFair does employ internal traders to operate on its markets. I have told him that I will republish here the Q&A they will post on their forum. Let’s wait and see.
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To tell you frankly, this info sounds like an unfounded rumor… but we will see…
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Also, it were to be true, we would investigate this issue scientifically and legally… without passion.
Good to hear.
http://wck2.companieshouse.gov.....ompdetails
"If BetFair were to hire traders to operate on its own exchange, their P.R. department would have disclosed it."
They didn’t disclose the new bet matching system, whereby they are taking a significant rake from each market before they charge commission. Their robot has an advantage that no normal user has - it does not have to wait 5 seconds to try to arb any out of date prices.
"Furthermore, they could be asked whether it’s true. I will ask them, or somebody will ask them. HammerSmith is not the KGB. They are open people."
Their record for accuracy with what they say to the press is lamentable. Be careful how you phrase a question to them. They could be employing 100 people to bet into Betfair markets, but if you asked them if they employ traders to bet into Betfair markets, they could easily tell you no they don’t (because the people they employ are given the job title "hedging operatives" rather than traders). Be blunt and say to them "are there any staff who place bets on Betfair’s behalf into the Betfair markets, yes or no".
"I hope you do ask them, and I look forward to seeing their reply…."
Me too
"I have told him that I will republish here the Q&A they will post on their forum. Let’s wait and see."
"To tell you frankly, this info sounds like an unfounded rumor… but we will see…"
"Also, it were to be true, we would investigate this issue scientifically and legally… without passion."
Without looking at who is betting on what it is still bringing in an inefficiency because the cross elasticity of demand for different markets (multiples and single events) vary. If (/when?) they do start peeking at who is betting on what, then not only do winning accounts pay 5% commission, if they leave bets up they can then be undercut by a trader making the decision to undercut them (commission free because its on Betfair’s own account) safe in the knowledge that they are getting a good run for Betfair’s money. A mug punter will find that had they left the same bet up at the same price as the shrewd one did, then instead of being undercut, Betfair might actually take that bet.
I’m not sure that the question of Betfair traiding in its own markets is news;
"19. The Joint Committee will be aware that Betfair sees its business as being no different—other than in the provision of choice, control, and better value—from a traditional bookmaker (who will now fall under the category "general betting operator"). Betfair is concerned that creating a separate licensing category for betting exchanges will merely create a political football which traditional bookmakers will continue to abuse by lobbying for unnecessary regulation in order to impede or undermine betting exchanges in any way possible. Betfair understands however the desire of government to maintain flexibility going forwards in case the betting exchange business model generates regulatory advantages or disadvantages which genuinely do merit differences in treatment. For example, the fact that a "pure" betting exchange operator takes no risk, means that an applicant should not have to prove an ability to manage risk positions. A betting exchange operator who does want to start taking risk will have to obtain a general betting operating licence as well and, as part of the application procedure, prove that it can manage the risk positions it intends to take. Most betting exchanges will no doubt apply for both licences so that they can participate in their markets as and when they see fit. This accords with the principle that betting exchanges should merely be viewed as traditional bookmakers who have taken the decision to minimise risk (as any traditional bookmaker can and often will do) by only taking one bet when they know they can find another punter to take the other side of that bet, locking in a profit by effectively adjusting down the odds offered to each punter by charging a small commission."
Second, what is the purpose of the Malta based Betfair Counterparty Limited?
[...] also this previous Rab Bibater’s comment.) Read the previous blog posts by Chris F. Masse:We will never have a perfect model of risk. — by [...]
Rab,
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Michael Robb advised to submit a question to their "LiveChat". I did e-mail them and ask them whether there are instances where BetFair acts as a bookmaker, besides the multiples.
http://www.midasoracle.org/200.....bookmaker/
http://www.midasoracle.org/200.....les-redux/
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The automatic reply I got:
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Thank you for your contribution to the forum Q&A session.
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via the live Q&A session.
Should you have any queries about the site or your account, please
e-mail our Helpdesk on info@betfair.com.
Kind regards,
The Betfair Team
Betfair
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Ed Murraywrote “They didn’t disclose the new bet matching system, whereby they are taking a significant rake from each market before they charge commission. Their robot has an advantage that no normal user has - it does not have to wait 5 seconds to try to arb any out of date prices.”
If the description of the bet matching robot that was previously provided here was accurate, there is no “advantage” for the robot to take. It’s matching bets among customers. If it takes a bigger commission, that would be a change, but they haven’t said that they are doing anything other than matching bets. Speaking of it as arbitraging is also not called for from this description. They aren’t taking advantage of the matching (perhaps overmatching) bets, they’re settling them against each other.
(The description was repeated in their response to CFM: “Where there is no opposing bet to match on the same selection, rather than just leaving a customer’s bet request unmatched, we will now attempt to match the bet request against unmatched bets on other runners.”)
" I did e-mail them and ask them whether there are instances where BetFair acts as a bookmaker, besides the multiples."
They definitely have traders hedging positions from the multiples into the Betfair exchange. Where this is a serious problem, is if say Betfair’s exposure is heavily towards say Birmingham City winning a football match (a Birmingham victory would be a big win for Betfair, a draw/loss would be bad news for Betfair). They could if they wanted check the match odds, and if they saw that a large number of shrewdies were all backing Birmingham to win, they could steer clear of laying Birmingham in the match odds to offset their risk. However, if they saw that the shrewdies were near uniformly laying Birmingham, they could then decide to lay Birmingham to get rid of their own position. Further to this, they could potentially nip in front of orders already up on the exchange, forcing people who would have been matched at the price requested to either request a lower price, or go unmatched. It isn’t a free exchange market.
Be careful giving Betfair any open ended questions - "are there instances where Betfair acts as a bookmaker, besides multiples" already has big grey areas, as highlighted above. There is a strong reason to run a multiples position if the accounts of shrewdies are all trying to get the same way that Betfair’s multiples position is already pointing. This does distort market dynamics, and there are internal Betfair traders appointed to bet into the Betfair markets. Any chance of wriggling that anyone gives Betfair will be used if they want to. A blunt question - "do you employ a team of inhouse traders to bet into the Betfair pool for whatever reason, yes or no" will leave them forced to either give an honest answer, or try to deflect it.
"If the description of the bet matching robot that was previously provided here was accurate, there is no "advantage" for the robot to take".
It instantly matches overbroke orders risk free to take significant sums of money out of all markets it operates on. If a user spotted an overbroke book, they would have to submit two bets on both sides, in the hope that 5 seconds later, both bets would still be available. That won’t be the case 99% of the time. The robot doesn’t have to wait 5 seconds, it can match one person’s bet against its own, whilst matching another person’s bet also against a 2nd bet from the robot, locking in the spread. This isn’t what Betfair advertises on television - in the UK betfair claims that punters bet against each other, now they bet against the robot, if the robot can find another punter who it can arb with instantly.
If you submit a bet to take an unfilled order on the screen, where previously you would have been able to match it, now the Betfair robot still has 5 seconds during which time it will take the unmatched order already up if it can find a way to arb it, leaving your order unmatched (and vulnerable to be picked off in many cases).
If there is no advantage to being able to fill two orders instantly if there is an overrround, then there are many users who would pay fortunes for said advantage if it was offered to them on a commercial basis.
"It’s matching bets among customers."
Not quite - its scooping a lot more money out of the pot, and increasing the customer churn rate, putting people off in the long term. Your chances of getting a match are reduced in the long term dependent on how big the scoop is. People need to consider that time is a critical factor in in-running markets, and this bot helps hooverers sweep both players/teams in a two way market. If you put in a bet where you would have been matched before, but now you aren’t (which will happen many, many times) you have to leave the bet up to try to get matched, and you are more vulnerable to being picked off as a wicket falls/point is won. There is no point requesting 2.1 on a player, then get picked off as the real probability swings ten clicks against you. That isn’t an improvement.
"If it takes a bigger commission, that would be a change, but they haven\’t said that they are doing anything other than matching bets. Speaking of it as arbitraging is also not called for from this description."
Plenty of examples have been posted on the Betfair forum confirming exactly this. Read this on page 33 of this thread ("Curious about some odd activity at Betfair" on the Betfair general betting forum)
http://site.forum.betfair.com/.....tname=null
Robin Ewe09 Mar 18:19i wasted another £2 on the arsenal match trying this out.
market was:
under 4.5: n/o / 1.01
over 4.5: 3 / n/o
I backed over 4.5 at 5 - matched instantly of course even though there was no money there.
4696736633 2008-03-09
17:43 Fixtures 09 March Wigan v Arsenal / Over/Under 4.5 Goals / Over 4.5 Goals
Back 5.00 2.00 Lost (2.00)
I risked £2 to win £8.
Where is the betfair customer that risked £8 to win £2?
There isnt one.
"They aren\’t taking advantage of the matching (perhaps overmatching) bets, they\’re settling them against each other."
Not true, as shown in the example just quoted.
Ed Murray,
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After I asked my main question, I added that there was that rumor about BetFair having hired traders, and I did put up the Midas Oracle URL where you mentioned this.
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We will see whether the Q&A is satisfying. If it is not, we would ask questions more directly to some higher-ups at BetFair, but there is no need for that at this point.
I know someone who was interviewed for a job as a Betfair internal trader, but who happened not to take the job at that moment in time. Another poster on the BF forum has claimed he was also interviewed for one of these positions, was talked through it all, and came to the conclusion that BF were heavily involved in their own markets. I can put you in touch with the first of these two people via facebook if you would like to chat with him.
http://www.facebook.com/s.php?.....=508629310
that’s my facebook profile - will put you in touch with the first person through there if you want to speak to him.
you may find other people who know about this by posting on the bf general betting forum as well. i don’t know if Betfair will answer any direct question about it.
I don’t comfortably read odds in that style (under/over; back & lay), but if I understood the example correctly, BetFair’s description of their bot’s behavior doesn’t match what they’re doing.
Yes, that would be costly to traders, rather than an advantage to them. While BetFair’s description made it seem that they were adding liquidity to the markets in the way I have described, this sounds like they’re allowing customers to place overmatched bets, and then pocketing the overage as they cross-match the bets.
The customers get the price they asked for, but BetFair knew at the time that they accepted the offers that a better price was available. Brokers in the US often offer "price improvement" as a competitive advantage to their customers in situations like this. This is a trading advantage larger brokerages can offer that smaller ones can’t match because they don’t see the trading volume. Not offering price improvement isn’t stealing–the customer got the price she asked for–but it’s considered better customer service to do it when you can.
Efficient markets work where supply and demand are met at a point most beneficial to both parties. If I buy a CD of my favourite artist for $10, the reality is I may have been happy to pay $15 or $20 for it, but at $10, suppliers and buyers meet up at a common price where there is no deadweight loss. The new Betfair robot ensures that a deadweight loss to Pareto optimality is introduced, and the people that are most disadvantaged by this will be inexperienced users. These are the ones that any company looking at its own long term health would try to nurture over the long run, not shaft in the short run to provide glittering (but fake) headline profits growth.
The most important thing I think is not to think about "traders", but to think about the gormless mugs. If for every dollar they bet on Betfair they used to get back 95 cents, and now they get back only 90 cents, then that’s no good. The Betfair take out from each market they run this robot on is higher, and the ones who are paying this increased takeout will be mostly the inexperienced users. Shame.
I think the robot is fairly close to neutral in markets before the match has started, but during matches there are wild swings in odds throughout the match, and taking a say 5% wedge between two users, plus charging the winner 2 to 5% commission, will reduce long term churn in the markets.
The problems are (1) is this sustainable? (2) is it targetting the right people? (3) did they bother announcing it? (4) what else have they got up their sleeve? (5) would this be legal on any financial market (6) if it indeed would be illegal on established financial markets, what in reality makes sports markets so different that people don’t deserve the same protection? .
Ed Murray,
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The proper way to contact me is by e-mail.
http://www.midasoracle.org/contact/
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As for publishing up comments or posts on Midas Oracle, here are the links to read to get more info:
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Your two guys are welcome to say what they want, here, on Midas Oracle, but don’t expect me to use all those social websites. I am a bit old fashioned. I don’t FaceBook that much, I don’t Twitter, I don’t IM, etc…
Chris , if you have any questions regarding traders on Betfair you’d need to email them direct info@betfair.com or maybe email Michael Robb direct if you have his email. The livechat@betfair.com has only been set up to put forward questions relating directly to the bet matching . Anything else even though the issues may be connected will be ignored.
Dave,
Micheal Robb of BetFair told me to address the "in-house traders" question to the LiveChat. Which I did. He said that BetFair’s market design specialists are gathering all questions, and will try to answer all questions.
If we are not satisfied by the answers provided by this LiveForum, we will ask this question thru other channels, later on.
Here are some facts about what is going on in Betfair for the doubters. These are facts and not supositions.
1. Betfair are skimming a variety of markets which is creating a windfall profit amounting to SEVEN figures per week
2. Betfair are ‘beating the clock’
3. Betfair staff are able to look at clients accounts and bet accordingly
4. It is Betfair’s intention to bring skimming to the horse racing in-running markets effectively killing off the 1.01 merchants
Betfair have recently moved their operations into a murky area and, imo, significantly changing their ethics.
Personally I believe much of what they do now is effectively illegal and they should be reported to the GC and brought to heel. Eventually of course they will shoot themselves in the foot but by then it will be too late. The wider their unethical practices can be broadcast the better as it may make potential investors think twice about future investments.
Deep Throat,
Would you be able to substantiate your accusations with evidence (which you would need if you were go to the Gambling Commission)?
It would seem that the debate is spreading, with a reference to somebody having reported Betfair to the Gambling Commission, and a reference from ED to his postings on here;
http://forums.moneysavingexper.....l?t=784195
Betfair abuses its market dominance.
http://hamishwrites.blogspot.c.....nance.html
" 4. [to Betfair] You state that "most betting exchange operators will no doubt apply for both [betting exchange operator and general betting operator] licences so that they can participate in their markets as and when they see fit". Do you currently participate in your own markets and, if so, is it really true to say that you have "`no interest in the outcome of the event"?
"We do not, and have never participated in any of the markets on mainstream UK sport, such as horseracing, football, cricket, etc. Occasionally we do stand as counterparty to bets in more obscure foreign markets to kick-start them by adding some liquidity. In that instance, the cost is part of our marketing spend and it therefore has no bearing at all on our impartiality in the market or our willingness to give up information to relevant sporting bodies. It is also declared to Customs and Excise in the event that it shows a profit."
"It should be noted that our relative impartiality to results is merely an advantage over traditional bookmakers meaning that we are less inclined to do many of the things which traditional bookmakers are accused of and which infringe regulatory principles. For example, we are less likely to manipulate the betting rules in our favour (infringing the principles of fairness to the punter) because we are less interested in the result. And we are less likely to be interested in hiding information on individuals suspected of skulduggery (infringing the principles of fairness to the punter and keeping crime out of sport) because we do not have information networks to protect. Therefore even if some betting exchanges do decide to take increasingly active roles in their own markets, that should only give rise to the same regulatory concerns applying to traditional bookmakers.February 2004."
Rab,
Would you mind providing a link or a reference?
Thanks a lot.
Sure;
http://www.publications.parlia.....012216.htm
Seems Loki Lab Rat (Betfair employee, not sure if the Rat in the name has any significance) has come out with a partial reply regarding traders and admitted they are active as part of the multipes operation to reduce risks in running taking advantage of the better odds on offer on in running markets
http://site.forum.betfair.com/.....ID=1435122
"Loki Lab Rat 18 Mar 08:20 I can answer this one quickly. There is a trading team based in Malta which manages the risk around the multiples product. They have software which tells them what the risk is associated with a potential result is and suggests what hedge bets can be placed to mitigate that risk at current exchange prices. They then place the hedge bets to manage the risk. They place the bets using the same software as everyone else using the site and respecting any in-play delays. The line about ‘opportunities in-play’ refers to the match situation and is nothing to do with beating the delay. For example, when just about every favourite won their international Euro 2008 qualifiers in early June last year (known as ‘Black Wednesday’ in some quarters), Moldova scored late-ish against Greece to square the match. The multiples team heavily laid the draw as the match drew to a close as it was a much better potential result than a Greek win. That meant that when Greece did score with the last kick of the game, our losses were mitigated to some extent by the hedge bets placed in-running. The multiples product is run under Betfair’s Maltese bookmaking license and is regulated by the LGA there. Therefore the team has to be based in Malta. The operation is an arms-length operation - there is no special access to any functionality or data from the exchange. "
There are always threads on the forums regarding delays in suspension and clock beating on the football markets, whilst there’s no evidence this is due to Betfairs own traders they’ll always be suspicions whilst they’re allowed trade on their own managed markets.
It is also pertinent that this team operates under Maltese jurisdiction; which of course puts it outside the scrutiny of the UK’s Gambling Commission!
However, I think there is also another issue that needs to be explored, and that is the general efficacy of a policy that allows Betfair’s own employees to trade on their exchange. Many people within Betfair have access to historical trading data unavailable to the broader betting public; such as what stables are backed and when; the significance of early money for particular horses etc; some are also able to access the betting records of individual persons. I specifically remember a comment made on Betfair radio concerning the boys in the office and how they had mopped up all the value regarding a particular horse from a gambling yard. The problem for Betfair, and one that is not likely to go away, is that nobody is sure any longer as to who it is they are actually trading against.
BF give out huge credit lines to fat loud mouthed pro punting horse owners whose associates then lay same horses when they are not off. Same individual has knocked plenty in the past so he is effectively BF trading their own markets by proxy. He is the highest profile on there but there must be plenty others.
Dave and Rab,
I will highlight your comments in a Midas Oracle post, later on, today.
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I want to remind the readers and commenters on this page that the best way to consume a blog is to do so within a feed reader, and I recommend Google Reader.
http://www.google.com/reader/
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Here’s how it works. You take the 2 Midas Oracle feeds:
http://www.midasoracle.org/feed/
http://www.midasoracle.org/comments/feed/
and you add them in Google Reader. From there, every morning, you log in Google Reader, and automatically, you will be served the new Midas Oracle posts and comments. So you won’t miss anything. For your information, there are other comment about BetFair made on other posts, which you have probably missed.
http://www.midasoracle.org/archives/comments/
http://www.midasoracle.org/archives/
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If you don’t know what a "feed" is, then go here, and everything is explained to you in plain English, with a geat video:
http://www.midasoracle.org/about/feeds/
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And I have another plug to make.
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I have listed here plenty of links (blogs, exchanges, etc.).
http://www.midasoracle.org/links/
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I would like the British traders to suggest to me some good additional links.
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Do you guys/gals know some good British betting blogs to add in this list?
Thanks a lot.
Send them to me by e-mail, and I’ll add them in the list.
http://www.midasoracle.org/contact/
The new clock beating super trap bet bot from Betfair does break Betfair’s own terms and conditions (which will no doubt be revised imminently), and is very foolish from a business point of view as it hammers the mugs and leaves the shrewdies, the courtside pick-off merchants, and the match fixers, all pretty much untouched. It would be suicidally bad business if this was in anything other than a virgin marketplace, where "growth" either organic or by taking extra cookies unannounced from the cookie jar, can offset quite amusing financial incompetence from the Betfair board.
What is the concern is the "what’s next then?" factor. There is an insatiable demand for more and more and MORE AND MORE money. Any weak line in the sand will be crossed (and has been by the trap bet clock beating bot). I’ve just had an extremely disturbing email about what exactly is next, from someone on the inside track, and its unreal. I’ve asked the person concerned to post on the midas oracle board, if they would be happy to do so. It beggars belief.
I am one of the people who Ed Murray has referred to in this blog. I was interviewed at Hammersmith by Betfair during the summer. For the time being I am going to concentrate on what Betfair has finally admitted from the past,present and future plans that betfair outlined to me.
""Loki Lab Rat 18 Mar 08:20 I can answer this one quickly. There is a trading team based in Malta which manages the risk around the multiples product. They have software which tells them what the risk is associated with a potential result is and suggests what hedge bets can be placed to mitigate that risk at current exchange prices. They then place the hedge bets to manage the risk. They place the bets using the same software as everyone else using the site and respecting any in-play delays."
There is 3 objectives for the "Maltese" trading team, "Maltese" is in quotation marks because betfair were unclear to me about who and what parts of the trading team were still going to be based in London and those who were going to be in Malta.
i) Hedging
ii) Trading
iii) Arbing
All 3 amout to the same thing, Betfair playing their own markets.
On each of the 3 points
i) Hedging, this is what Betfair has admitted to and has been doing to from day 1 of the multiples. Betfair admit to taking the other side of the bet for the mutiples, so i guess like any other bookmaker it is only natural they "hedge" their bets to reduce potential liabilites.
However unlike traditional bookmakers, who will lay off a multiple when one runs up, the bets taken by Betfair multiples are placed directly back into the exchanges before they "run-up".
This is one of the reasons behind the mutliple groups, they look at the back/lays placed on the mutiples for the first match and then the bets are placed into the exchange to reduce the liabilites and to cream off the difference between the price they have offered and that offered on the exchanges.
ii) Trading, this is what betfair are attempting at the moment, albeit unsuccessfully from what I last heard. Betfair have admitted they change their hedging positions, this by definition is trading. however the most serious aspect of their trading, is the in-running trading.
If betfair have accepted liabilities X & Y for events A and B being the outcome of a match, then why would liability X for A or Y for B be no longer acceptable during a match unless there was an advantage to be gained by trading betfair’s position in-running?
Afterall, on betfair’s exchange with a 100% book, whether that 100% book was an efficient or inefficient, the net expectation of betfairs position would remain the same if they were trading hedging positions blindly to "balance" the liabilities.
In the instance of an inefficient market, if betfair were blindly trading (i.e. not using odds compilers, traders or other means to form an opinion on the market) in-running then there would be no net gain as betfair would be equally likely to be on the efficient and inefficient prices and the differences would average out.
iii) Arbing, this is betfairs ultimate goal for the multiples. If this new cross-matching bot is being called a superbot, then this will be the hyperbot. A bot which will perfectly arb the mutiple bets into the exchange so betfair can make money from it’s mutiples operation risk free.
But if betfair are denying that they never form an opinion to a market and place bets accordingly and they have no plans to do this in the future either. Then why are they covertly recruiting academics from universities, odds compilers from the bookmakers and recognised traders from their own customer base ?
If betfair are playing their own markets, then what is to stop them abusing the position they have by owning the exchange. Having worked for several bookmakers in the past, I have yet to know one who would voluntarily wait 5 secs to place their "hedges",wait in the queuelike everyone else, make trading decisions according to the flow of money or not use their "warm sources" wisely.
Jesus.
I wonder how much Betfair’s "value", would be if they weren’t trying to depend on clock-beating, trading their own markets, front-running orders etcetera would be, if the regulators do indeed wake up and see that Betfair’s decision to break their own terms and conditions is a joke.
Every single commercial business in the world relies on extracting the most money from people who can afford to pay the most. Andrew Black and his team are yet again totally failing to do that, and to deliver value to current Betfair investors. It is actually painful how silly all this is. I genuinely believe that if I ran Betfair, I could scrap all this chicanery and grabbing out of the cookie jar, probably at least double profits, and give punters a good run for their money (instead of running a trap bet robot on the exchange etcetera). All this chicanery is incredible incompetence from them, and breathtaking to see.
[...] also Rab Bibater’s comment. “19. The Joint Committee will be aware that Betfair sees its business as being no [...]
[...] Graham “Sharp” Minds, in a comment on Midas Oracle: I am one of the people who Ed Murray has referred to in this blog. I was interviewed at Hammersmith by Betfair during the summer. For the time being I am going to concentrate on what Betfair has finally admitted from the past, present and future plans that betfair outlined to me. “Loki Lab Rat 18 Mar 08:20 I can answer this one quickly. There is a trading team based in Malta which manages the risk around the multiples product. They have software which tells them what the risk is associated with a potential result is and suggests what hedge bets can be placed to mitigate that risk at current exchange prices. They then place the hedge bets to manage the risk. They place the bets using the same software as everyone else using the site and respecting any in-play delays.“ [...]
woo hoo, they’ve stopped the thieving today
official announcement up on the bf site.
its only a matter of time before they launch another hair-brained rip off, but well done everyone who posted across the forums and won the argument.
Ed,
You seem to know a lot about Betfair and notwithstanding making some very strong criticisms of them, you also seemingly would like to work there.
I would have thought that someone like you would be an invaluable resource for them. Have you ever though about approaching them for a job?
Clandestine in-house trading, the scandal of the whole SIS ATR Racetech delayed pics scenario the whole company is asking for GC to kick the doors in.
Roger Duncan - thanks for the post. I genuinely believe that if I had a role within Betfair I could boost their earnings hugely, AND give the little fish a better run for their money. Betfair would never have me though - I’ve gone head to head with the very, very top of the tree people there, and they aren’t interested in the long term sustainability of the exchange or long term profits.
I knew some of the results in advance of evictions on the UK Big Brother television show, because I was a journalist at press conferences at the house. I made the deliberate decision not to bet into the market when I knew the actual result in advance. The weeks I wasn’t at the studios, I could see someone else knew in advance and was smashing everything available on Betfair. Telephone lines would close, and announcement would come live on air maybe 15-20 minutes later of who had been evicted. A market would be evens the pair who went or with what percentage, and that would suddenly be hammered. Betfair told me in 2006 that I was their 2nd biggest player on “specials” markets, so if I’m that far up the food chain, and I know the results after the lines close but before announcement, it seems reasonable for me to request that the markets should be shut once the lines have closed (and the result is known to a few people, but not generally known).
I asked on many levels for the markets to be shut at the time the lines close, but was told no by Betfair key accounts, and the person in charge of Betfair specials. I raised it with Andrew Black and Betfair’s head lawyer Martin Cruddace when I had a meeting with the two of them that these markets needed to be shut once the result was known, as Betfair users were being matched against people who knew the result and were hammering the markets. Mr Cruddace made it clear to me that no law was being broken by telephone vote insiders. My view is that matching people who bet fairly against people who do know the result, is bad business, allowing insiders to scoop tens of thousands of pounds risk free from the Betfair pool. Both betting exchange markets and reality tv are post-millennium recent inventions, and law is only ever a retrospective framework. Just because something isn’t illegal doesn’t make it right. Andrew Black went a step further. He said “there is the saying ‘if you can’t win you can’t lose, but I reject that”. He also said “I have no problem with this, its better to leave the markets open to allow people the choice to bet, even if they have no chance of winning”. He kept stressing the Harry Redknapp to Portsmouth managerial saga, where huge money was gambled on Betfair on Redknapp to move from Southampton to Portsmouth, which caused a bit of a stink when the ‘inspired’ money turned out to be right. I stressed the difference in this case is that the result was definitely known and being bet upon, after the result. It just struck me as wrong, and Betfair punters being ripped off.
There is a financial advantage to current Betfair shareholders allowing insiders to hammer Betfair markets. In the very instant short term, someone whacking through tens of thousands of pounds offering juicy odds will find a lot of takers. (In the long term people will grow wary and cynical, as happened with the number of suspicious betting patterns on Nikolay Davydenko matches). It boosts immediate commission, and makes the headline profit figure bigger. The stock is then sold on, either to a Japanese firm “Softbank”, or in the future to other investors, who will not realise that this inflated profit figure came about at the expense of organic growth (people taking tens of thousands of pounds risk free from the pool don’t then blow the money on say a basketball or football match). Betfair is run on a “give us as much profit as possible NOW” basis. I looked up to Black for years, and felt sick that he, as a member of the Betfair board, was doing this.
About ten months earlier, Mark Davies had created front page headlines in the UK press by saying Betfair was cracking down on phone vote insiders who had swiped £105,000 from the pool. It made the front page of most of the tabloids (who love a big reality tv story). The fact is that Black either solely, or in tandem with others, reversed this policy, on the basis that nothing illegal was being done (the lawyers only found this out after Davies went to the press). I told Black he was wrong, but he just could not understand why. I left that room in disbelief, going to the front entrance of the Betfair offices without Black, but with Mr Cruddace. I was a bit speechless, and I can’t speak for Cruddace, but I think he was as dumbstruck as I was that the guy I had looked up to for years,had just had a two hour rant why he was happy for insiders to bet into the Betfair pool risk free, on a known result. It was unbelievable. I have no tape, no proof, they both know what I’m saying is completely true, but obviously its not exactly something which Black would say in public.
It hurts me because at the start of the meeting Black was cooing about his new kid, how wonderful his new kid was etcetera, that he had spent the weekend (I think somewhere down on the south coast?) with his family etcetera. I’ve used Betfair in good faith for years, and often written or done articles hugely pro-Betfair in the UK press. I don’t want fast cars, helicopters, yachts etcetera. All I want is the chance to bet fairly, on the basis of skill, against other Betfair users, who are also betting fairly. It would be really cool if I ever did have a family to be able to look after them in a way that I didn’t have when I grew up. I perhaps have the same goals as Black - looking after a family if I ever had one, but to hear the guy who invented Betfair launch a fairly savage rant about how he rejected ‘if you can’t win you can’t lose’, and that he had no problem with genuine Betfair users being matched for large money against insiders who knew the result, was a massive blow. I left feeling sick, and feeling that I’d been had.
A few weeks later, I saw some alarming quotes in the News of the World (UK paper) from BF spokesman Tony Calvin saying something very close to “Betfair don’t accept bets once events have been completed, and if this happens we will void them”. I called the NOTW journalist to ask if Calvin had really said that, as it was the complete opposite of what I had been told. I then emailed Tony Calvin saying what I had been told by Black and Mr Cruddace, saying that Betfair’s policy was to allow phone vote insiders to bet after lines had closed, and smash thousands of pounds out of genuine Betfair users risk free. I got no email, no correspondence back from Calvin, but the next day the journalist concerned received an email from Calvin saying how much care Betfair took to protect their clients, and gave the example of how Betfair shut the reality tv markets at the time the lines close, instead of announcement by the presenters later on in the shows. It was history rewritten. They said no at every level, UNTIL they thought there was a chance the media would expose what they were doing. Then they wrote an obsequios email saying how much pride they took in protecting their customers. Isn’t that incredibly sad to see? I had campaigned for months for that change, not bet on the markets when I knew the result, and they didn’t even bother to let me know.
I would love to work at Betfair, but I have fought for a number of changes, all of which have been to Betfair’s long term benefit, but all of which they have resisted and resisted. One person claimed to be making over £10,000 a day from a tennis tournament in Asia on game by game tennis markets, by beating the delay. The match odds had a 5 second delay before a submitted bet hit the screen, but the game by game markets only had a 3 second delay. I and others all spoke to Betfair saying that if users did need 5 seconds protection on the long run markets like the match odds, they definitely needed 5 seconds on the game by game odds, especially when one account, but having a friend on a mobile in that stadium, was credibly claiming to be ripping off over £10,000 a day smashing money through on out of date prices. Betfair resisted, but we were eventually told that on the Thursday of that week (late 2006) it would be changed to 5 seconds. When the Thursday came, someone inside Betfair made the decision to overturn that and put it back to three seconds. The NOTW were conducting a campaign against fast picture players betting on out of date prices on horse racing. I thought it was unacceptable that one account with a friend on the phone from the stadium was credibly claiming to be ripping off so much money risk free. I said to the journalist to have a look at those game by game markets the next day to find the real hornet’s nest. I then called Betfair and said “look, tomorrow the NOTW will be looking at those tennis markets, and you can feel free to keep them at three seconds, which is against what you promised and told us, but don’t be surprised if you do to see this getting massive bad publicity in the NOTW this or next Sunday as a result of your decision to allow a pick off snide to run riot”. Betfair caved in, and reversed back to the 5 seconds.
Everything I do has been to protect Betfair and Betfair users. All I want is for Betfair to make a strong profit, but for all users to be able to bet fairly, and for the winners to be users with skill (not users with fast pictures, users with racing “connections”, match fixers etcetera). The chance to live by the sword and to die by it. There is perhaps a ‘jealousy’ from me towards new Betfair girl Anette Oberstad. She is heavily advertised on Betfair as the WSOPE poker champion, and is sponsored by Betfair. The fact is if you play poker you don’t have the hazards of sports players - Betfair is rife with fast picture players, who in effect bet against you by seeing the flop/turn or river whilst you are a card behind. Betfair also has had a number of markets with the ’suspicion’ (lets use the word suspicion for now) of match fixing, where you bet against people who are deciding what the flop/turn/river are going to be. Now that Betfair has internal traders betting into its own markets, how long until they are placing bets against you knowing what your cards are?
Betfair is run in an extremely cynical manner, and I’ve been attacked time and again. One internet troll was outed who was constantly posting attacking me, on a professional level, and also seemingly fascinated with my sex life, and lo and behold, it was a Betfair lawyer. I’ve spoken to him since he was outed, and told him exactly what I think of his trolling. It is sad that he stopped though once he had been outed, if it was worth posting attacking me whilst I didn’t know who he was, then why wasn’t I worth attacking when I did know who he was?
Betfair is a brilliant company, run by people who don’t care about it. I’ve put my neck on the line time and again fighting for it, and against corruption, and time and again the biggest obstacles have been Betfair staff themselves. Most of the things I have campaigned for - shutting reality tv markets at the time the lines close - changing game by game markets to an identical level of delay as match odds on tennis and snooker - fighting the people betting in-running from the USA (Betfair changed their terms and conditions to make betting from territories where people are not allowed to bet an offence) have all happened, and all these steps will boost Betfair’s growth and profits, but all were fought often quite fiercely against by Betfair staff.
I’ve also received a suspension without warning from posting on the BF forum. I asked for anything I have said wrong, any quote, but they will not release a copy of the thread (I had only saved about half of it), where three people betting from the USA on the US Open tennis had a firefight with each other a few months later on the BF forum. I posted on that thread after one of them made repeated accusations at a number of people - all of them anonymous other than as forumites except me (my real name is widely known, and I have been in the press a lot) - of cheating, saying it wasn’t true (it wasn’t true), and received fierce abuse. I was then permanently banned for “being involved in an exchange”, i.e. not having said anything wrong, but posting on a thread.
Mr Cruddace made it clear to me that in the then current climate, where two people had been arrested (the director of Bet on Sports?) by the US authorities for allowing gambling from the USA, that his job included the remit of protecting Black and the other Betfair board members from facing charges in the USA for allowing gambling from there. All the board members wanted it kept quiet, and a thread on the BF forum by three people all falling out with each other, outing each other as each in turn being people who were betting from the USA (to the tune of millions of pounds of wagers) was obviously something which Black and others would not want in the public domain. Hence two of the people were banned from the BF forum, but I was as well. They don’t trust me to keep my mouth shut, and as you can probably see from this post, they are right about that. The greater good comes first, the needs of the many outweigh the needs of the few, and I will not stand back and let Betfair staff decide to allow huge damage to Betfair from insiders, and from people betting from jurisdictions where it is illegal to do so.
Betfair is an essentially brilliant company, but I don’t think they would ever hire anyone who cares about it, least of all me. I have put my neck on the line many times, and there is a satisfaction in protecting Betfair, and helping people nearly all of whom I will never meet, and nearly all of whom will never know it was me that campaigned fiercely, at significant personal cost, to protect them from insiders and certain members of Betfair staff.
BetFair Q&A:
http://www.midasoracle.org/200.....r-q-and-a/
Thanks for the response Ed! Wow!!
Well, it’s nice to know that there are people like you out there looking out for the little guy.
Good luck.
Also worth giving a mention to Simon Rowlands who when Racing Editor of the The Sportsman did a good expose on the exchange shop at Cardiff. If I can find thelink I will post it.
Hi guys very interesting, i have long thought Betfair do what they want when they want and nobody has any real right of reply.
Feel free to post some comments on here http://www.betfair-sucks.com which i hope will grow into some kind of diary of misdemeanors of Betfair.
Something happened last night which happily came 24 hours too late for the Betfair superbot to profit.
Please look at the following graphic
http://img297.imageshack.us/my.....geryh5.jpg
Sharapova was 5-3 down to Hantuchova in the first set, so Hantuchova’s chances of winning went from about 25% at the start of the match up to about 57%. Sharapova then pulled it back to 5-5, at which point she was 1.54 to 1.55 to win.
Someone submitted probably around £50,000 backing HANTUCHOVA at 1.55.
Had the Betfair robot been in place it would have laid all the 1.55 on Hantuchova, matching it with odds on lays on Sharapova.
The graphic indicates £48,789 was matched at 1.55 (whilst much more was matched by the user taking every higher available price). There was also a large amount still left up on the screen, which the user presumably cancelled in time. You can see the grey spike where volume traded jumped from pennies to £50,000 (lol).
If the Betfair robot had arbed it instantly, then that would have been an instant risk free profit of £15,000 to £20,000.
Luckily that money, even if lost by that punter (the price never recovered, and Sharapova won 2-0) went to other punters, to be recirculated over the long run into the betfair pool.
Betfair’s robot was disgracefully set up to profit risk free from these kind of mistakes, to carve off risk free cheap money.
The Betfair Q&A was much better handled, and more professional, than I was expecting. It didn’t shirk accusations, and admitted culpability in some areas (such as poor customer relations). However, this bit is just wrong:
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“Anything we can do to address that and give them a better chance of getting a bet matched immediately helps the long-term growth of our markets.”
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That is not true. Betfair taking out more from the pot than previously, as is the case with their superbot, increases the rate of attrition of the userbase, and damages the long-term growth of the markets. If they were offering best execution the statement would be ok, but the positives from giving people a price mismatch are outweighed by the bad value being given to them. The following is also at best misleading and probably false:
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“As the process only matches opposing customer bets, and no bet is matched by this process selectively based on anything that happened in the event being bet on the in-play delay isn’t applicable.”
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It helps people smashing through money on one side backing, or the other side laying, to get filled on both sides. Many snides playing will only be whacking money through on the favourite, either backing or laying, so the Betfair superbot magnifies the clock beating money, in effect beating the clock on the opposing selection by proxy.
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“I accept that I did not consider the difference in-running, as it relates to people mistakenly posting the wrong price, which would take the book over-broke by a significant margin.”
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This would have been an obvious ramification of putting the robot on. I do find this hard to believe, even if I am happy to give Mark Davies the benefit of the doubt.
3. If (1) is the case do Betfair guarantee that they will never change the current policy of best execution for bet requests on the same selection? For instance if I put in a request to back a horse at 2.0 and there is someone offering 2.5 on Betfair on that horse will Betfair never back it at 2.5 with that person and lay it back to me at 2.0?
I think that goes very much against the philosophy of the company as we set it up, and I would resist it very strongly myself.
That isn’t what I’d call an overwhelmingly convincing "no" is it ;-). LOL.
As published in The Sportsman:
If you haven?t done so already, you really should pop along to The Sportsman?s forum (http://www.thesportsman.com and click on ?forum?). You can talk about pretty much anything that is permitted elsewhere, as well as one or two things that aren?t, or so it seems.
Take the subject of the speed of feeds of racing pictures. Threads on this have apparently been deleted on other forums, but a healthy debate on the subject has been taking place on The Sportsman?s boards. Check out ?ATR SIS Racetech ? The Truth? on the horse racing forum.?
The main bones of contention are the varying lags between events and their being broadcast, the reputed disappearance of one of those delays earlier this year followed swiftly by its reappearance, and what sometimes seems like reluctance on behalf of the parties involved to discuss the issue in detail.
There is some dispute about the precise time lags involved, but all parties seem to agree on the following: pictures on At The Races (ATR, a free-to-air dedicated racing channel as part of a Sky package) are approximately 1 sec behind those on Racing UK (RUK, a subscription-only dedicated racing channel) and 2 sec behind Satellite Information Services (SIS, which broadcasts largely, but by no means exclusively, to betting shops). ?
SIS pictures in turn are a small but nonetheless significant figure (some give it as 1 sec, some as 2 sec) behind real time.
The time delay between SIS pictures and ATR pictures (double that of between SIS and RUK pictures) in particular is crucial. The two platforms cover the same events many times each day. ATR point out that their service "is not exclusively for people betting in running"?and claim that the lag is necessary in order to deliver pictures of a sufficiently high quality.?
Two seconds might not seem like a lot to be getting hot under the collar about, but in that time a sprinter can have covered as much as 40 yards and a jumper can have fallen at a fence when it appears to others to be about to jump it foot-perfectly. ?
On such differences vast sums can be won and lost. And the thing is that many punters are clearly unaware of the time lags involved.
When the 2 sec gap between ATR and SIS reportedly disappeared one day earlier this year it seemed - to those who believe in everyone having as fair a crack of the whip as possible, at least - to be what is known as ?A Good Thing.?
When the gap was there again shortly after, it was only too easy to imagine that there were hidden agendas at play. ATR maintain that there is ?no real evidence yet that there was a change in the delay.? ?
Conspiracy theories often have no substance, but if allowed to fester they can do nearly as much harm as if they were true. It would be for the good of all punters if the various accusations were answered as fully and as openly as possible by the parties involved. It would be even better if an independent body were allowed to investigate such matters.
It would also be for the good of punters ? and in my view should be made statutory ? for the precise time delay to be displayed on all broadcasts of races. ?
When this was suggested to James Singer, Head of Marketing at ATR, his response was ?We don?t believe we have any obligation to caveat the fact that our pictures are live on screen ? no TV pictures are truly real-time, as you point out. Any obligation to in-running punters specifically would sit more with exchanges or bookmakers offering in-running markets I?d say.?
Matthew Imi, Chief Executive Officer for ATR, later added: ?if all the relevant parties voluntarily got together or if we were compelled by a regulatory body to display such information, then I am sure we would be happy to do it.? ?
There?s nothing like looking after the interests of your own customers.
The powers that be, entirely properly, go out of their way to protect the vulnerable punter through bodies such as GamCare. ?Vulnerable punter? might almost be a term coined to describe any individual who bets in running on an event without being entirely au fait with the degree to which they are at a disadvantage in the market.?
Meanwhile, a whole thriving industry exists on the back of the delays associated with pictures transmitted on the dedicated racing channels. Not only do punters with access to faster pictures ? such as those provided directly by SIS ? have the potential to make considerable sums of cash, but those who provide these faster pictures turn a pretty penny as well. Domestic subscription to SIS pictures weighs in at almost 7,000 per annum for a minimum contract of three years.
It should not be forgotten in all this that SIS provide the pictures for ATR, though it has never been suggested that they would attempt to dictate the length of the delay involved in the broadcasting of those pictures, of course.?
Exchange shops have sprung up, providing high-speed feeds and state-of-the-art technology for their users. The reason for this is clear: most of the punters in them make good money by betting in running. One such shop claimed that it had access to feeds that were ?even quicker than SIS?. I was told that I needed to book a place at the shop ?at least a week in advance?. Business is thriving, then.
There are a lot of people who are doing very well out of the status quo. The status quo is being bank-rolled, directly or indirectly, to a large degree by punters, many of whom are ignorant of precisely what is happening. ?
The least that can be expected is that someone, somewhere cares enough for such people to ensure that the facts are brought out into the open.
Interestingly Simon Rowlands then ended up working for Betfair and all has gone quiet now!!!
http://www.telegraph.co.uk/mon.....ary113.xml
And there it is. Quelle surprise.
Betfair introduce a trap bet robot to artificially inflate short term profit at the expense of long term growth, and three weeks later, Black is revealed as cashing in much of his chips.
Puts the statement from Michael Robb on here saying there are no plans for Betfair shares to be traded into context - Betfair is undergoing a change of ownership in part, and the people that buy these stakes were going to be short changed if the trap bet bot could have been passed off as providing real profits.
Extraordinarily predictable.
Ed Murray, I have edited the formatting of your comment for better readability.
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Fawwon, thanks for the SportsMan Forum link. I will put it up in my list:
http://www.midasoracle.org/links/
Chris
The Sportsman went bust so the link in the piece is redundant. There was another good article which a mate is getting me and which I will post.
OK.
Still no answer from BetFair to that question:
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"Can Tony Clare confirm or deny that Betfair has recruited experienced odds compilers from the betting industry and traders from their own customer base with the purpose of boosting the GP on the bets taken by Betfair Malta?"
http://www.midasoracle.org/200.....ltiples-2/