BetFair is as innocent as a lamb… but their P.R. people can’t tell you that at this time. Here’s why.
Chris F. Masse March 28th, 2008
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Dear Midas Oracle readers,
Besides the facts about BetFair Malta’s combo market maker operating on the multiples (which Midas Oracle informed you about back in January 2007), you may have heard the rumor that BetFair UK (in HammerSmith, London) have been hiring what was described as a team of human market makers, whose task would be to operate on the BetFair betting exchange. That rumor has lead some to think that BetFair is sinisterly evil. Here’s what I hold as a truth at this time.
- Yes, BetFair has been probably hiring people along the first part of the line above —at least in some kind of small ways.
- No, BetFair has never operated and will never operate on its prediction markets —again, other than on the multiples (which is a very special product, and of little importance in term of revenues).
- The rumor has been fueled by the fact that some British event derivative traders haven’t fully digested the fact that The Sporting Exchange operates the BetFair prediction exchange in the U.K…. but it also operates many other operations (e.g., a poker game, a casino game, a set of exchange games, a financial prediction exchange, etc.)… and all that in many other jurisdictions —and all this should be understood in the past, present and future tense (to take into account what they are brewing, which we are not yet aware of). The fact that some people were interviewed in HammerSmith for some task over the last summer does not mean that those people are due to perform that task… on the British betting exchange.
- It would be easy for the BetFair P.R. department to come clean about all that. They would burst that silly rumor in about 2 minutes and 30 seconds. However, if they told the public everything about their present and/or future, non-exchange and/or non-UK operations… by the same token… they would also inform their competitors, which is no good business, as you can fully understand. Which is why the BetFair spin doctors have not answered my question, which was prompted by the conspiracy theorists.
- Overall, BetFair is a good company —legal and ethical. I like that. Overall, they are good people. I like them.
- Nevertheless, I have concluded that their market designers are not competent enough, and that their P.R. managers don’t compute the prediction market approach and the Internet marketing approach. I did blog about that in the past, and will do again in the future.
- Finally, I want to say 2 or 3 words about the status of rumors in the world of digital publishing. As you may know, InTrade-TradeSports and BetFair-TradeFair operate web forums, and do sometimes prune the postings of people critical of them —when they don’t simply close up the forum totally, as it is the case for TradeSports as I’m typing this. On one hand, the democrat (small “D”) in me hates censorship —Voltaire and Benjamin Franklin, be blessed (”I may not agree with what you say, but I will defend to the death your right to say it.“). On the other hand, I have read a lot about the managing of web forums, and all experienced moderators are adamant to say that the trouble makers (or described as such by pushy operators) should be expelled, because a small bunch of them can destroy the spirit of a forum. So, I could partially understand the logic of the exchanges when it comes to expelling critics from forums. That said, Midas Oracle is not a web forum (and is independent from the exchanges); it is a group blog where the comments are open. As such, the blog comments represent published conversations, which means that, on one hand, those conversations should be free and uncensored, but on the other hand, the fact that they are published creates a moral and legal responsibility for the editor and publisher. The difference between a blog (like Midas Oracle) and a forum (like the BetFair forum) is that, in a blog, you have a site lead —(and that’s plural (as in “site leads“), when it’s a group blog). In a blog, the site lead(s) is/are always at the origin of any thread (called a “post”), can moderate the comments, and can publish another post highlighting or correcting something that was said in the recent past in the comments. Plus, keep in mind that, in a blog, the readership of the posts is something like 50 times bigger than the readership of the comments (both on the Web and in feed readers).
- On Midas Oracle, there’s total freedom of speech (as long as there is no insult and defamation), but there’s also the site lead’s duty to pop up and rectify any rumor that would have spread on the blog comments. Which I did in this present post, in an intentionally fuzzy way, for reasons stated above. We are going to continue mixing the total freedom of speech with the respect due to the truth, here. Help me doing that. Thanks.
… And, of course, pro-BetFair and anti-BetFair comments are open on this post, just below.
- Analysis (Industry) , Ethics , Exchanges & Markets , Journalism & Prediction Market Journalism
- Comments(20)
Thank you Chris.
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It is very helpful to get your summary of the various issues that have been discussed on your excellent blog over the last few days!
Thanks, Roger Ducan.
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The "truth" of course comes from multiple sources —and we hear all of them here.
Dear Roger Duncan
Do you think it would be possible for you to discuss what your own relationship with Betfair is?
That’s an interesting post Rab! What exactly are you accusing me of? And more importantly why?
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In answer to your question, I am a customer.
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Perhaps if you took the trouble to read the posts I made here: http://www.midasoracle.org/200.....backwards/ you would have seen that without the need to ask your question in that ‘tone’.
I agree with a lot of the original post, but I wouldn’t describe BF as behaving within a positive ethical framework, in particular their PR department. Gambling as a product has heavy negative externalities on some users (as does alcohol and other products). To be fair I wouldn’t actually class gambling as a "good" at all (I believe society as a whole would have a Pareto improvement if it was banned
), but given that it is legal in the UK, then some duty of care is necessary.
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Betfair’s IT department is very strong, their customer services are pretty good. Their PR department is woeful. If they were on board a sinking Titanic, they would be telling passengers "Iceberg? What Iceberg?". Nikolay Davydenko’s matches saw a huge amount of suspicious betting patterns in 2007, on a violently escalating scale, but by the time of the match against Arguello, with both players reputations in tatters in terms of suspicious betting patterns, threads on the BF forum from well before the match started predicted a fix, and the actual betting proved ever more bizarre. The wall of money laying Davydenko continued, even once he had gone 6-2 up and won the first set. Betfair voided the match, not because of the reported $1.4 million that was won by Russian based accounts, but because every user thought that they ‘knew’ it was fixed. The cat was out of the bag.
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Mark Davies gave a series of interviews across national British tv stations the next day saying that BF had voided it because of suspicious prices (the price at the start of the 2nd set was the same as the 1st), and because BF users "weren’t getting a run for their money". This is all well and good (and true), but he deliberately neglected to mention that this was one of a large number of matches with similar bizarre betting patterns, and that BF had done nothing about the others. Whilst he was giving those interviews, Arguello’s match in the next round saw a wall of money laying Arguello, everyone could see that was dodgy, and BF settled it the instant the market finished, in the quickest tennis match odds settlement I have ever seen. Anybody believing Mark Davies, that suspicious matches were investigated and dealt with, would have had their fingers burned within minutes of him coming off air, and again on other matches.
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Davies then claimed two months later that BF didn’t actually offer markets on Davydenko or Arguello either, which was a complete fib. They had offered a large number of markets on both players since the voided match. Davies I assume meant to say "we only offer Davydenko matches in big tournaments like the US Open, but not the little ones", but that is something completely different. If a player is under investigation for throwing a match, no markets should be offered on him at all, in my opinion. He may be under duress to lose.
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Tony Calvin also has a record for being sneaky - his quotes in the NOTW about BF not accepting bets after events had finished, and bets being voided if they were found to be placed after an event had finished, were laughed at on the BF forum. I lost about £800 on one cricket match after the final wicket went down, and that was how I learned not to leave bets up - you will often be picked off. I have already posted on MO that I asked at every level for reality tv markets to be shut at the times the voting lines closed, to stop the blatant insider trading in the subsequent period before announcement, and was told no at every level of BF. When I sent an email to Calvin asking why he had put those quotes in the NOTW, given BF’s policy of allowing insiders to bet on known results, he wrote a sneaky email to the journalist about how much BF cared about their customers, giving the example of how they close reality tv markets at the time the lines close. The very change I had campaigned for for months. It was totally dishonest of him to try to lead the journalist it was a longstanding policy - it is a policy totally rejected by BF, and then only adopted after a panic that they would be exposed for allowing BF customers to be ripped off by insiders, betting on a known result. The Betfair PR department’s record is lamentable, sadly.
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"Gambling as a product has heavy negative externalities on some users (as does alcohol and other products)."
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Yes, but I’m satisfied with the UK legislation, and BetFair’s pro-active role in deterring this problem (see the Help file on their frontpage). More could be done. More is always better.
http://en.wikipedia.org/wiki/Problem_gambling
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On Midas Oracle, we sometimes publish about problem gambling:
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The last UK Gambling Commission’s survey report says that the Internet has not led to an increase is gambling addictions.
http://www.midasoracle.org/200.....ddictions/
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Spread betting was a problem, if I remember well the study.
I’m not satisfied with UK legislation - I think the FOBT’s in the shops of the traditional bookmakers should be banned. They are a hidden form of regressive taxation.
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As for BF, lots of companies put spin on what they do, but I think I personally would feel incredibly uncomfortable if I was a BF PR spokesman, putting forward most of the stuff that Mark Davies and Tony Calvin have said. I feel that Davies handling of the Davydenko fix (yes it looked suspicious, no it wasn’t the only match that looked suspicious) was poor, and by giving Channel 4 viewers, Sky Sports News viewers and Radio 5 listeners, the impression that BF were fighting match fixing, and that BF was somewhere punters would get a run for their money on these markets, wasn’t an ethical thing to do. The fact is the Davydenko matches had a string of suspicious betting patterns, which nothing was done about, until BF gave up their King Canute impression, and acknowledged that the tide had actually come in.
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In my book, no sugary messages should be sent out about gambling, ever, but seriously, if you are passing off a string of suspicious matches as being fair betting contests, when they quite clearly weren’t, going on national tv to tell everyone you’re on top of it, and that BF is somewhere where people can bet fairly, was wrong. The British public, and BF users abroad, deserve some respect. If you asked Mark Davies to bet his life on whether the people whose bets triggered the void on Davydenko v Arguello, had also profited from previous matches/betting heats run on BF, I would be surprised if he chose ‘no’. I don’t have access to the information he does as to who has bet on what, but when you see Davydenko a set up in a three set match, and being laid at a whisker under 2 to 1 to win by 2 sets to love, its pretty obvious that there is a rat smelling pretty badly. Davydenko v Arguello should never have happened - and it is the fault of the BF integrity team that it did. Neither player should have had markets on them by that point, and it was BF’s appeasement of the funny money which led to the exponential growth and desperation from certain Russian accounts to pluck the golden goose.
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For the record, the void cost me about $1600 in profit on Arguello, but I’d rather the match (and the others) were all voided. It was obvious which way the wind was blowing, despite what Mark Davies and Calvin say to the media.
[...] Prediction market firms should monitor the Blogosphere for rumors, and deal with them in a subtitle …. [...]
[...] has just written a comment bringing in some intriguing (but yet unconfirmed) facts [UPDATE: FOLLOW THIS LINK FOR MORE INFORMATION]: Just one point, Betfair have already hired a team of traders to bet into its own markets last [...]
[...] SOLUTION: Updating that post with the link to the post that debunks that rumor. [...]
Chris F. Masse -
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Did I see a post of yours saying that BF had failed to reply to one of your emails? What was in the email, if that is still the case?
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thanks
Ed Murray,
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The question was:
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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?"
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I was not offered an answer to that question.
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But if you read my post, you understand why, and what is the unofficial answer to that question.
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Ed, I can echo your coments about employees accessing account details. A friend I used to work with a while back, regulary got phones calls from one of the employees advising him of bets from one of the winning accounts. I’m not in touch with him any more and I doubt he’d put his mate on the spot but I had no reason to doubt him and have heard similar stories from other people. I guess as it’s started from a relatively small business the employees have much the same mentality that was prevalant at Sporting Options and we all know what happened there.
I’d be interested on the economists take on the betfair business model as it’s now looking flawed considering they’re the UK (worlds ?) largest online bookmaker and still posting miserly profits compared to the other bookmakers. It’s quite obvious Betfair are looking into branching into the traditional bookmakers role now they’ve such a high customer base. Whether they’ll cherry pick their customers to match we can only guess as they’ll have just as much info now on the losers as the traditional bookmakers have and offer credit facilities to certain customers and they aren’t likely to be the winners are they.
Problem for Betfair is they’ve created a situation with near 100% books which makes it almost impossible for them to ‘market make’ without taking risks. They don’t have the traditional bookmaking skills or mentality. Their own attempts at multiples, even though they were offering poor odds, has only shown up how useless the traders they’ve already employed are. Hardly a week goes by now without them ringing up on the pretence of some customer survey only to end up offering some free cash to try one of their failing products such as binairies or casino products.
Can’t be too long before the likes of Packer and Softbank want to see a healthy return on their investments. My bet is that with the recent Australian rulings they’ll start seeding those markets as another trial for their traders,
Dave -
. My goal has always been to fight for Betfair, and to fight for the chance to bet fairly. I really think that ordering phone vote insiders to be allowed back onto the BF markets, or Mark Davies insisting on numerous TV stations that BF were protecting punters on Arguello v Davydenko, followed by a wall of money laying Arguello in the very next match, and nothing whatsoever done about it, and the quickest settlement I have ever seen of any BF tennis market, when BF key accounts say to me the phones are lit up like a christmas tree with people wondering what on earth is going on, is absolutely ridiculous, and is just spaffing away Betfair’s end of year profits, for no good reason whatsoever.
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Thanks for the post. I remember being at a function in central London hosted by a company. An email from BF had been widely circulated identifying every single one of their top 20 accounts, with names and details of the top 20. BF leaked that list in error apparently. It was widely circulated, and did include someone very famous, (but very unexpected to me - I had no idea he was a heavy gambler).
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I thought it was moderately amusing, and probably not too damaging. I suppose its only when it happens to yourself that you appreciate how irritating BF are with their leaks. The saving grace is that the person concerned who is repeatedly trying to gossip to his drinking pals about me is I believe on a very low run at BF, and I actually don’t believe he has access to people’s accounts. I think he’s a grandiose charlie big potatoes, and the stories he has told his pals about how he is a big cheese at BF etcetera, which are believed by the local knuckle-dragging troglodytes, I have been told by my account manager and Andrew Black that the lovely chap concerned is towards the bottom rungs of BF. Its irritating, but I don’t see what I can do about it. Every person working at nearly every other bookmaker will have some or perhaps a lot of knowledge of high profile accounts, and its sad that BF have a chap who feels the need to impress his buds.
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Softbank and the like will want to see a return on their expensively acquired investment, and they are unlikely to get it whilst this management team are in place, imo. There are so many weak links on the BF board its sad to see. I get tired of saying it, but every business in the world maximises profits by charging the people who are happy to pay the most for a service, the most money to use it. BF works in reverse - the cheats/snides/hooverers etcetera pay a max of 5% and scoop from the pool next to risk free, whilst the BF team fight hand over fist to protect them.
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If I was on the board, for a start I’d get the information out to everyone on how to get the best/fastest pictures. Create a level playing field for everyone to bet on. The feeds showing tennis matches that are on Eurosport are 4.54 seconds ahead of the Eurosport transmission. These can be accessed through a QUALI-TV QS1080IRCI, and a Manhattan Plaza ST 500, with a minimum of 1.2metre dish. The 5 second delay on Eurosport matches is a pish-take. In reality someone is about 6.5 seconds ahead at the moment. BF customers need to be warned, educated etcetera, not just fed the diet of a "BF education" which means that their bets get picked off by hooverers.
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Same with cricket (not by as big a delay as this). I put forward to BF’s head lawyer Mr Cruddace and Andrew Black, that the phone vote insiders smashing through 5 figure lumps at the death of reality tv markets should have their bets voided. People should earn the right to bet on BF. What could be better PR for BF than refunding genuine punters who were ripped off by phone vote insiders. Who cares if you lose the business of the insiders? They can naff right off. And the customer loyalty generated would be huge. Punters would feel that BF is a place they can bet fairly. Same with the 1.01 hooverers on tennis matches.
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I honestly think late suspension costs BF over £1million a year lost on its overall profit figures. Most big tennis matches will have £500 to £1000 won by people whacking through tens of thousands of pounds at 1.01 and upwards. That money has a max of 5% commission taken, and then disappears permanently, instead of normal in play money being recycled between BF users. The internal BF staff who are late to suspend are costing BF (and Softbank), a crippling amount of money. Some games they suspend in time now, but most they still don’t, and the board have no idea that they are dumping money from their yearly profits into the accounts of people who are betting after the event has finished. It ain’t clever.
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Tony Calvin’s performance in his role as BF press officer has been incredibly cynical, and I really liked Mark Davies when I met him at the House of Lords, and I really want to believe that he believes the things he says, but he’s more accident prone than Frank Spencer in Some Mothers Do ‘Ave ‘Em. I know every single time I see or hear Mark Davies on TV or radio that he’s going to come out with another gaffe, like saying that BF didn’t offer markets on Davydenko or Arguello, or the recent trap bet mismatching robot, where he claims he didn’t even realise that it was a trap bet robot. It was painfully obvious that’s what it was, and that was how it would work.
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BF need fresh blood. I’d recruit skilled talent from the old school bookmaking industry. BF need account managers to make commercial decisions on which accounts to restrict. Eventually they will restrict winners - that is inevitable. But first, they really should look at restricting all the snides and insiders. At the end of the day, its costing BF a fortune to nurture them. There were six people courtside feeding scores in the recent womens tennis tournament in Dubai, and one on a PDA. A BF board with intelligence would realise that this is costing BF money, and do something about it. A BF board with high intelligence would ban the hooverers. A BF board with very high intelligence would allow the hooverers to continue to bet, assign a market manager to monitor the accounts, and charge those accounts commission in proportion to their inverse elasticity of demand - i.e. rates of up to 90% or even more. Then you could reduce the commission BF charges to the normal punters - the ones it needs to nurture and look after. The result would be a huge increase in BF profits. They just cannot see it. In any economists’ book, their approach to their business model is banal and plain weird.
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If Graham "Sharp" Minds is correct in his account of his interviews at BF, where they are approaching academics and odds compilers, hoping to price up markets themselves, its a very naive strategy, doomed to failure, if they don’t restrict the accounts which are smarter than the traders they employ. It doesn’t matter if an account wins or loses (some mugs, high or low rolling, will get lucky at times) it matters how they win.
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Andrew Black’s decision to order BF’s integrity team to allow phone vote insiders be allowed back on to the BF markets is just almost completely potty. It has no economic rhyme or reason, and is damaging to BF over all but the immediate short run. I do think BF markets have been run in a "lets boost commission as much as possible by allowing a free for all, and then sell on the stock quickly to Softbank etcetera at the highest price we can possibly get for it" manner.
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I would love a meeting with Softbank and/or James Packer
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For the record, BF are making a mistake recruiting odds compilers etcetera. Their problems lie perhaps almost solely in their commission structure, but also in the boardroom and their integrity team.
[...] may have heard the rumor that BetFair do access customers’ trading details and do use that [...]
Seems hardly a week goes by now without Betfair messing up in some way.
They’re now more than happy to manipulate their Betfair Starting Prices in order to return a 100% book for the Grand National. Although I guess for the world largest online bookmaker it’d hardly look good to advertise the BSP as 4.28 against the industry 8 much better to consider it unfair and return a punter friendly 10.51. Trouble is rather than enhance the price out of their own pocket they decide to void bets and increase layers prices to pay for it.
Does anyone know if th BSP had to be agreed with the Gambling Commission prior to implementation and if there are any online docs relating to this ?
Thanks
Dave -
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That SP fiasco looks horrible. I don’t nominally have a problem with a recalculation of SP towards a nominally ‘fair’ level. The way they have done it - deem the result of a fair market unsatisfactory, and just ignored supply and demand, looks disturbing. Some people on the BF forum are claiming they had real bets, that were matched, with real positions, that were subsequently voided for no good reason. I find this unreal. How can you put a bet on, then later BF decide that you never actually placed that bet?
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Its pretty sick that they have hidden away an announcement that people affected by this have a responsibility to email BF and present their case themselves. Erm, things went wrong, and it was because the SP mechanism was badly designed. As I understand it, it behaved as a Tote system (which is I believe illegal for Bf to do?) and matched supply and demand at a tiny price.
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Those bets and returned SP weren’t voided because it was unfair. It was voided because BF paying out the winner of the Grand National at just over 3 to 1 would have been a PR disaster. People in general don’t understand the pitfalls of using BF, some of which are magnified or even introduced by BF management. However, people do understand “put a tenner on at the bookies, you’d have won £80 on the Grand National winner with the bookies, or £33 with Betfair”. Its a PR gimmick, and its at the expense of people who placed bets in good faith, using the exact mechanism which BF put in place to generate prices. People who did nothing wrong in laying at SP, would have had the bets stand had a huge SP been returned (and BF crowing in the papers about how they paid out 15/1 or 20/1 etc on the Grand National winner) but got stuffed because the price of 4.3 generated by BF’s own system was deemed unsuitable for BF from a PR point of view. My sympathies for the people laying at SP.
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Sad to see the Racing Post so toothless as well. I don’t think the skimming trap bet bot was covered at all, and this has had minimal mention.
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I look at the rubbish coming out in the Zimbabwe election from ZANU-PF & Mugabe, and I just can’t tell the difference between the total nonsense over there spouted to the media by ZANU-PF, and the nonsense spouted by BF. It really is unbelievable. I used to be so proud of BF, and it is sad to see them battered weekly with total incompetence, and an either insipid lack of comprehension from most of the mainstream media, or a weak obsequiosness from the Racing Post towards BF. BF came into being claiming the “death of the bookmaker”, now their CEO is claiming that they are one themselves. Mugabe came into power as the darling of the world media, and brought only suffering and despair.
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A number of BF staff were saying to a number of BF users face to face that their skimming trap bet robot was great, that it was increasing commission by 15-20% on the markets it was on. They decided the media didn’t need to be informed etcetera. How is James Packer going to get a decent return from his investment in BF if this kind of scam is the way put forward to increase profit? It was cruel, stupid and against BF’s long term economic interests. It was a short term raping of the markets. They knew that. The lamentable protestations from Mark Davies that he didn’t realise it was a trap bet robot, are, well, just lamentable.
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At this rate it won’t be long before Andrew Black starts pushing for internal BF traders to be hired to play on BF poker, but with access to which players have what cards before placing bets. If there is no law outlawing something that is immoral and wrong, BF have in the past decided to try a quick cash in to take advantage. Its just sad.
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I really hope its James Packer’s people who are behind these decisions, because if its not, he’s being had. There are so many unfair markets on BF - the recent Hells Kitchen market was evens the pair with 45 minutes to go, and 1.1 vs 11.0, with the price totally collapsed on Barry McGuigan. Somebody knew Barry was set to win/ahead in the vote, and dumped a fortune scooping everything out of the market. Was that “fair”? Why wasn’t that resettled? Why was the insider allowed to be paid out? How was paying out an insider in Betfair’s long term financial interests? The BF board, thanks to Andrew Black, again stood shoulder to shoulder with the insiders, and paid it straight out, no questions asked. Just another in a very long line of sad days for BF, for Softbank and for James Packer. It just beggars belief.
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The people betting fairly on that market had their money put into the account of the insider. However, the people betting fairly, laying the national winner at SP, weren’t paid out. And why? Because BF want to create an illusion of value. Their leaflet sent out to many customers recommended betting at BF SP, as it had returned odds on average 37% higher than bookmaker SP. At the end of the day, people laying at SP, would never have had the SP lowered had BF paid out 20/1 on the national winner, and they weren’t going to be paid out when it turned out the SP was shorter than the bookies. Its depressing, its so sad to see, and jeez, I think BF are taking a gamble that the public are stupid. I pray for the sake of the people introducing trap bet robots, and flawed SP programs, that their luck/fortune that the media are either blind or unwilling to take a long hard look at this.
Ed Murray:
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I assume that your post was made before the following post on the Betfair forum:
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Betfair Customer Services
07 Apr 12:05
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Following our decision to roll-back the initial Betfair SP reconciliation for the Grand National win market, some customers were left in a worse position than had that initial SP stood. We are in the process of assessing which customers were disadvantaged by the roll-back and by how much. All affected customers will receive payments from Betfair to reflect this. In other words, if a customer would have been in a better position had the initial SP reconciliation stood, then a payment will be made by Betfair to the customer to reflect this, irrespective of whether the customer has contacted Betfair. No customer will be left in a worse position following the roll-back than would otherwise have been the case.
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Thank you to those customers who have already emailed the bets@betfair.com address with details of circumstances in which they believe they have been disadvantaged. This has helped us to confirm that our calculations match the expectations of those customers and we will look to respond individually to relevant customers.
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The decision to roll-back the initial SP reconciliation was taken following extremely high level of demand from Betfair SP backers in the Grand National win market. Had the initial SP stood, the prices returned on several horses for those backers would have been much reduced from what they could reasonably have expected. As a result, Betfair made the decision to roll-back after the race, to reflect an SP overround as close as possible to 100%, which is typical of the Betfair SP in the normal course. We believe that this was an exceptional case and don’t anticipate a reoccurrence, but obviously the result of the roll-back was that some other customers were left in a worse position than had the initial SP reconciliation stood.
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We will begin to make account credits today and expect all payments to be made to affected customers within the next 48 hours.
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Or are you saying that the above post is not accurate?
Thanks
Roger Duncan
The whole SP fiasco has come about because of betfairs “risk free” bookmaking model, no amout of fiddling with the calculation would have avoided what happened on Satruday for one simple reason the bookmakers lost.
in other words to support the price of comply or die, the bookies are having to pay from their own pockets, just like betfair are doing. betfair need to learn that if they are going to be a bookie they need to take risk, to use their own words, “there is no such thing as free lunch”.
the more betfair diverts away from it’s P2P model, the more these cases are going to happen.
when I was interviwed by betfair and they explained to me all of the problems with the multiples operation, most importantly the fact that it is a loss making depite the huge overrounds i was asked for my opinion. I told them the simple solution was to take the bets on the chin like a traditional bookmaker and keep away from the markets as the bets they placed were likely to be taken by traders that are shrewder than their own, especially in-running where most of the betfair trading activity actually occurs.
They were horrified at this prospect and were insistant on producing a formula to place the bets into the main betfair market to reduce the risk as close as possible to zero. I was more horrified that they didn’t understand the statistical concept of expectation.
[...] BetFair wouldn’t deny those allegations, out of fear of hinting its competitors. [...]