With the multiples, BetFair takes the role of a bookmaker.
Chris F. Masse March 17th, 2008
What is multiples betting?
Betfair offers multiples betting, also known as accumulator betting. You can combine a number of selections from different markets into one bet. Betfair allows multiples of between two and eight legs. A leg is an outcome of a single market. You can select one or more runners from a market to form a leg. The odds for each leg are determined by the available odds of the runners in the equivalent singles markets. The odds for the multiple are determined by multiplying the odds for each leg together. [...]
Who takes the other side of my bet?
Multiple bets, unlike single bets, are struck directly with Betfair. However, the odds offered are based on the odds available on the singles exchange at the time of bet placement. You cannot ask for your own odds for multiple bets and multiple bets are never unmatched.
What do you know - a major betting operation now offers combinatorial betting. They say “The odds for the multiple are determined by multiplying the odds for each leg together.” If they are not careful to only allow such trading on events that are almost all independent, they can be taken advantage of. If they wanted to offer such trades on events that were dependent, they would need to use a full combinatorial technology under the hood, such as my combinatorial market scoring rule.
See also Rab Bibater’s comment.
“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.”
The excerpt about, I believe, is part of a BetFair response to the UK Gambling Commission. I had re-published this document on Midas Oracle, months ago.
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