Betfair the Masonic Lodge

The relationship between William Hill and the betting exchanges has not been a good one. On January 29, 2003, David Harding on the subject of Betfair’s impact on the the over-round said- “Some racecourse markets now return overrounds of only 1.2 to 1.3 per cent per runner. That is not sustainable. I cannot have a price mechanism for 50% of my business being desecrated.

In a recent interview with Betview magazine Ralph Topping, Hills’ current head had this to say of Betfair-

“‘I call Betfair the choirboys of the betting industry – “look at us we’re so innocent” – actually the exchanges are the biggest Masonic lodge there is.   They’re a massive secret society where illegal gambling is taking place. What would throw a spanner in the works is if William Hill came up with an exchange model which could be offered in our betting shops or through our telephone business.”

A fascinating portrayal of one of the most transparent betting companies in the world.

EDITOR&#8217-S NOTE: BetFair&#8217-s Mark Davies has his own take on the Topping statement.

BetFairs Mark Davies, the last man standing

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Andrew Black:

Most of the original [BetFair] team have moved on now. Ed Wray is now Chairman, Mark Davies is still there and I’m still on the board and going in from time to time – I have three [BetFair] days this coming week but it’s normally much less than that. The other four members of the foundation team (such as it was) have moved on, but I’m in regular touch with all of them.

Two of them work full time for charities. One isn’t working at all at the moment. John, who had his 40th on Saturday, tried working in a couple of startups after Betfair, but after a fair bit of soul searching he recently decided to become a maths teacher. I had a chat with him about it.

He said that Betfair had been an amazing experience, but it had ruined him for anything else in business. Other ventures had been disappointing by comparison and just weren’t satisfying, so he had moved on to the next stage in life – giving it back.

He was very happy and very positive, just as he was during all the years I worked with him. The early years of Betfair were tough and very stressful, but it was exhilirating and also great fun at times.

BetFair – Live Chat Session – Tuesday, January 27th, 2009

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BetFair &#8211- Live Chat Session &#8211- Tuesday, January 27th, 2009 &#8211- [This link is only available to the BetFair registered users, alas. In the future, BetFair should make the transcripts of all chat sessions available to the public at large, in my view.]

Here is a transcript, transmitted to me by Mike Robb of BetFair &#8212-many thanks to him.

&#8212-

Betfair Customer Services
27 Jan 10:30

We&#8217-ll be hosting a Q&amp-A session on the forum this evening (27th Jan) between 6pm and 7pm (UK Time). We&#8217-d welcome questions on any topic of interest to Betfair customers.

To help us get through as many questions as possible you can send them in advance to livechat@betfair.com. Unfortunately it is not possible for us to respond to each email individually but we will attempt to answer all questions raised via the live Q&amp-A session.

Betfair Customer Services
27 Jan 18:00

Welcome to the Betfair Live Q&amp-A session.

We have received a number of questions in advance which we will start to answer now. If you have any questions which you have not already submitted, please email livechat@betfair.com or post a response to this thread and we will attempt to answer between now and 7pm (UK time), when the session ends.

We look forward to your emails and question in the coming hour and hope you again find this session helpful and informative.

gerard
27 Jan 18:00

Do you have any concerns about the upcoming GC report on In Running, or are you confident that the status quo will remain?

We don&#8217-t believe there is any compelling reasons for the Gambling Commission to introduce changes following their in-running betting consultation exercise. Our betting data (for example, the percentage of people who are profitable pre-event v those profitable in-running), together with the results of a survey in relation to in-running betting we undertook among customers in early 2008, suggested that many of the claims of unfairness about in-running betting are not borne out by the evidence. We shared this evidence with the Commission as part of a submission we made to them last Summer.

For anyone who is interested, when the Commission has published its findings, we will make available (on the Betfair Developers Program site) our submission to the Commission as part of the in-running consultation exercise.

Stow_judge
27 Jan 18:01

Who is representing Betfair on here today?

Mark Davies and Tony Clare will be answering your questions.

Betfair Customer Services
27 Jan 18:02

The Magician (6)

Several questions regarding tipsters a) What would Betfair&#8217-s response be if it was found out that a known tipster, was laying horser he tipped publically b) do Betfair monitor the accounts of know tipsters for this activity c) if not are you intending too in the future and are you likely to back check their tips against their lays.

Betfair has no involvement in the regulation of tipsters and it&#8217-s not clear that this would be possible even if we wished to do so. If someone places bets that would be at odds with recommendations they publish, it&#8217-s really not the betting that is the problem, but the fact that they are publishing recommendations they aren&#8217-t following themselves.

While there&#8217-s a case that someone publishing tips should take steps to ensure that the tipster&#8217-s claims are honest and not misleading, it&#8217-s hard to see on what basis Betfair could have any involvement in this process. Tipsters distribute their tips through all manner of media: in print, via telephone, text messages and via websites, and it would be impractical to even attempt to monitor, let alone then link that activity back to individual Betfair accounts.

Finally even if we were made aware of a specific instance of a tipster tipping a selection, then betting to profit from a conflicting outcome, it&#8217-s not clear what you would expect Betfair to do. Customer confidentiality would prevent us from sharing any information about that customer&#8217-s betting activity with anyone other than the relevant regulator, and there is no regulator of tipping services.

Betfair Customer Services
27 Jan 18:05

The Magician (6)

Under the BHA rules of racing it is clearly a breach for an owner to lay his own horse and there has been at least one high profile case in the last couple of years. It is a breach of the rules even if the owner is a &#8220-net&#8221- backer and is laying the horse to try and inflate the price. However, the BHA&#8217-s rules allow owners to back the entire field to beat their own runner or (more likely) back obvious dangers to their own horse. Despite suggestions that the BHA would look into this, nothing has been done. Given the BHA are unable or unwilling to change the rule and address this issue &#8211- is it not time that Betfair made their own policy and stated categorically that an owner can only bet in a race where they has a runner if they are BACKING their own horse?&#8221-

Betfair has always argued that backing and laying are two sides of the same coin. Backing a horse is no different to laying the field and likewise laying a horse is no different to backing the field.

Intellectually we don&#8217-t see how this cannot be the case. We believe that if an owner was to back the field instead of laying his/her own horse, that the BHA would take the common sense view that this was &#8220-laying&#8221- by another means. Obviously if an owner of (say) a favourite, backed the second and third favourites, that might not be so straightforward.

The BHA does have more general rules dealing with the &#8220-commitment of a corrupt practice&#8221- etc, which could perhaps be invoked in such circumstances, but we agree that a more general rule encompassing something like &#8220-betting against&#8221- a horse by the owner might be more appropriate. It is something we are happy to discuss with the BHA.

Other customers have suggested we take unilateral action in other cases of suspected cheating &#8211- for example removing a horse from the Betfair market (so effectively treating as a non-runner) a horse in relation to which there has been suspicious betting patterns &#8211- but we have to remember that the BHA is the policeman of the sport. In this specific case we would rather take the matter up with the BHA before embarking on a course such as you suggest.

Stow_judge
27 Jan 18:05

I am suprised at the lack of liquidity on the horses AvB markets. Do Betfair have any plans to promote awareness of these markets?

To be honest, so are we. We believe that these offer excellent betting opportunities, and we will be pushing them at the Cheltenham Festival once again.

Perhaps this will give them the showcase and sprinboard they warrant.

Stow_judge
27 Jan 18:08

Are Betfair planning to stream any Greyhound racing on their website in the near future?
What are Betfairs plans with regard to Greyhound racing sponsorship this year?

We have no current plans to stream greyhound racing although would always consider doing so if the right opportunity arose.

On sponsorship, we are committed to repeating our sponsorship of the trainers championship and one or two other events. If new opportunitiers arise we will look at each on its merits.

Betfair Customer Services
27 Jan 18:12

Forum name: Muqbil

I have some questions about Betfair&#8217-s trading team in Malta:

How many are there?

It&#8217-s a team of about 10.

What is their scope / remit?

They perform two distinct functions:

1. Hedge liabilities that arise as a result of customers placing multiples: the software continuously updates Betfair&#8217-s position as customers place bets, and it shows what Betfair&#8217-s exposure is and what single bets to place into the exchange to reduce that. The traders have no remit to take positions based on their own opinions, nor can they place transactions that would increase Betfair&#8217-s exposure, even if they thought that doing so would be &#8220-good value&#8221-.

One fallacy we&#8217-ve heard in this respect is that &#8220-this description can&#8217-t be true, because they place bets in-play&#8221-. They do indeed hedge in-play, simply because anyone competent in betting maths would appreciate that their liability on each result changes continuously based on the likely outcomes of the other games. For instance if Chelsea play Liverpool, and at the same time Man Utd play Arsenal, and customers have placed doubles on Chelsea/Man Utd and Liverpool/Arsenal, then the correct hedge for the Man Utd vs. Arsenal game is entirely dependent on what&#8217-s happening in the other game. If Chelsea are 3-0 up then to be hedged we need to be backers of Man Utd and layers of Arsenal. If Liverpool lead 3-0 it&#8217-s the other way round: to be hedged we need to be backers of Arsenal and layers of Man Utd.

The traders in Malta have no access to data about customer activity on the exchange, and their bets are placed via a regular Betfair account, i.e. they&#8217-re subject to the same in-play delays etc. as any other customer.

2. Price up the Italian sportsbook.

It&#8217-s Betfair&#8217-s long-standing policy not to accept bets from territories where it&#8217-s prohibited (e.g. Japan), but to look to get licensed in any territory where betting licences are available. At the moment in Italy the only licence you can have as a betting operator is to run a sportsbook (i.e. be a regular bookie). They haven&#8217-t defined a betting exchange licence yet, although we&#8217-re hopeful that they&#8217-ll complete the work soon so we can apply for one and then market the exchange in Italy, but in the meantime we either sit on the sidelines or we offer a sportsbook to build awareness of the Betfair brand and customer base there, so we&#8217-ve got a better platform for the exchange if and when we obtain an exchange licence. We decided to launch a stand alone sportsbook which you can see at www.betfair.it. It&#8217-s actually a licence condition that there is no connection to Betfair&#8217-s betting exchange (otherwise it would be a bit pointless for the regulator to draft regulations for betting exchanges if we operated an exchange under the sportsbook licence). So the sportsbook is completely stand alone, the prices don&#8217-t reference the exchange, nor can we hedge liabilities on the exchange. Because we stand all bets taken without being able to hedge we need a trading team to continually manage the prices that we offer.

So if you&#8217-ve heard that Betfair&#8217-s hired people in Malta to price up sporting events that&#8217-s completely true. If you&#8217-ve heard Betfair&#8217-s hired people in Malta to put prices up on the exchange or engage in proprietary trading activities on the exchange then that&#8217-s not true.

What markets do they operate in?

WRT to multiples, the markets that we offer multiples in. They can&#8217-t hedge a position in a market we haven&#8217-t laid a multiple bet in, and they&#8217-re not allowed to place a bet that would increase Betfair&#8217-s exposure, even if they think that bet is &#8220-good value&#8221-. WRT Italian Sportsbook they operate in no exchange markets, as explained in answer to the previous question.

Presumably they trade commission &amp- premium charge free?

No that would be incorrect. Betfair&#8217-s Malta entity pays commission to Betfair in the UK at the same rate as any customer, and if it met the premium charge criteria it would pay that too, although obviously hedging multiples is never going to be systematically profitable enough to meet the premium charge criteria (when hedging is profitable it will still be at nothing like the kind of strike rate required to pay the charge, so like 98% of the winning accounts on Betfair they&#8217-re unlikely ever to pay it). A number of taxation, transfer pricing and competition laws prohibit the exchange in the UK from dealing with Betfair Malta on any terms other than those available to all customers.

Is there any audit trail of the betting activities of the trading team made available to the gambling commission, or indeed any requirement to have such information available to the GC?

Every operator licensed by the GC is required under the Gambling Act to provide details of betting transactions if so requested by the GC. The GC can request access to every single transaction involving Betfair entities which are regulated by it, should it have a regulatory concern, although it&#8217-s not clear what sort of concern you think they should have.
For instance, although Betfair doesn&#8217-t, there is no aspect of the Gambling Act that prohibits an operator from taking a position for its own account based on knowledge of customer activity. To the best of my knowledge Betfair is the only major betting operator that doesn&#8217-t engage in proprietary activity (taking positions for its own account that it believes to be profitable, rather than simply hedging exposure resulting from accepting customer bets). In addition Betfair employees are strictly prohibited from accessing customer records unless required to do so in the normal course of their duties (for example answering a customer query about their account). This is monitored and employees are informed when they first join Betfair that any such activity would be considered gross misconduct and would result in instant dismissal.

In addition the regulator in Malta, the LGA, regulates our Maltese entity and it too has access to each and every bet entered into by Betfair Malta. The details of each and every single bet laid by the Italian Sportsbook is relayed in real time to the Italian regulator.
That&#8217-s a licence condition for any sportsbook operator in Italy.

Now that Betfair have offered some guaranteed starting prices (as per recent promotional email), would this make the horse racing markets fair game for the trading team to prevent notable Betfair liabilities?
(This presumes they don&#8217-t already operate in the horse racing markets.)

As mentioned above there is no Betfair activity in any horse racing markets simply because we have not as yet offered multiples on horse racing. We&#8217-ve offered guaranteed starting prices simply because the reality is that our SPs, even after 5% commission, are usually bigger prices than the &#8220-official&#8221- SP, and when they&#8217-re not it&#8217-s usually so close that the difference is negligible. It simply removes a potential worry for a customer who is concerned that they may be on that one horse that returns a &#8220-poor&#8221- price. As we know how rare that is we think it&#8217-s a good way for us to put a potential SP customer&#8217-s mind at rest.

Stow_judge
27 Jan 18:14

After the demise of channel 425/854, the Greyhound racing digital tv channel, Greyhound racing fans are left with racing on Sky ca 2-4 times per month.
The liquidity on the live televised Greyhound product is very good. Would Betfair consider sharing sponsorship of a Greyhound racing digital tv channel that was part subscription based and part funded by multiple bookmaker contributions and advertising? Do Betfair have any plans in this area?

We would welcome any industry-wide initiative in this area, and it is clearly beneficial for all bookmakers to get daily greyhound racing back on our screens.

Betfair Customer Services
27 Jan 18:16

Anon via Email –

On betting exchanges, owners are not allowed to lay their own horses.

Victor Chandler owns the 4-1 favourite for the Triumph Hurdle Zaynar, so wouldn&#8217-t a natural extension of the above would mean that he should not be offering prices on the Triumph Hurdle.

Or if so, only betting without the favourite on the race?

I think it&#8217-s a very interesting point but it&#8217-s a question for the BHA really, rather than for us.

The rule in question is Rule 247, and it does actually have a specific carve-out for this. It states that it is valid, &#8220-provided that this Rule shall not apply to the laying of any horse owned by a Betting Organisation in the ordinary course of business of that Betting Organisation&#8221-. Whether that is right or wrong could doubtless be a matter of debate &#8211- but that is what the rule states.

Betfair Customer Services
27 Jan 18:17

The Magician (6)

Following the recent case of Dean McKeown and his co-corrupt &#8216-winning&#8217- at least 61,909 pounds from legitimate Betfair punters, Disappointingly Betfair made no effort to recover that money on behalf of its customers and claimed they had no real means to do so. Does Betfair feel the BHA&#8217-s approach of letting the corrupt keep the money , when the BHA have the power to fine them the comparative amount, Morally or ethically correct. I know you will say legislation has changed since then &#8211- but will Betfair (under the new legislation) categorically state that you will help rather than hinder customers attempts to recover defrauded money &#8211- and will you do everything reasonable to recover it on our behalves.

We would have no issue with the BHA imposing fines to match the amounts won by corrupt gamblers and we can see the moral arguments supporting this. However, enforcing any such fines might not always be straightforward and the BHA has limited powers in this regard. Would the stigma of owing an unpaid fine to the BHA be an embarrassment to a person already carrying the stigma of a &#8220-warning off&#8221-?

Separately, (though we are not sure you are implying this) we don&#8217-t agree that Betfair has ever hindered any attempt for aggrieved customers to pursue corrupt gamblers against whom they may have matched bets. Logically, why would we want to prevent a genuine customer pursuing a cheat? There would be clear upside for Betfair (the deterrent effect) but no downside that we can see.

It is in Betfair&#8217-s interests that betting on the platform is fair, cheats are deterred and customers can bet with confidence. If pursuing those who had won money unfairly were straightforward, it would therefore stand to reason that it is something we would be keen to achieve. It is far from straightforward, but it doesn&#8217-t mean it is something we have filed in the &#8220-too difficult&#8221- category. We are actively considering our options and responsibilities in this respect. As a related point it would be wrong to assume that Betfair simply allows suspected corruptors or suspected cheats to withdraw what may be ill-gotten gains without any questions asked. Our policy is to suspend accounts and freeze the funds within those accounts, pending investigation by the relevant regulator and/or the Gambling Commission. Should the consequence of any such investigation be a decision to void bets (whether of our own volition or by order of the Gambling Commission), such a course of action is clearly appropriate.

The Magician (6)
27 Jan 18:20

Follow-up to my question on tippers potentially laying or betting against their public tips.

You attempt to avoid the question nicely but let me pin you down on a few issues. Perhaps it is not your job BUT&#8230- monitoring of &#8216-advertising tipsters&#8217- would be simple as their tips need to be proof by a legitimate body under ASA rules. If there was skulduggery these proofed tips could probably be obtained.
Ignoring finding the incidents for the moment &#8211- If you where made aware of such activity surely 1) it is BLATANTLY against clause 9 of section 2 &#8220-YOUR REPRESENTATIONS&#8221- of your own T&amp-Cs and 2) Probably in breach of numerous wider reaching regulatory rules about disrepute etc

So more specifically 1) what action would you take under clause 9) 2) would you inform the authorities?

I assume you are referring to the section of our terms regarding &#8220-betting in bad faith&#8221-. We&#8217-re not trying to avoid the question at all: quite simply in the kind of example you cite, the act of bad faith is not the placement of the bet, it would be the provision of misinformation to the tipsters customers. We don&#8217-t proof tips, and if tips are being given to customers in bad faith we have no visibility of that, nor means to take any action, and as you rightly say the validity of tipsters&#8217- adverts is something regulated by the ASA.

Betfair Customer Services
27 Jan 18:23

The Magician (6)

Do you feel IR delays shorter than the delay of the pictures used by the majority of users is fair on those users? I don&#8217-t mean legally I mean morally?

The answer to your question will depend on the makeup of the customers betting on that market. Obviously the choice of delay on newly placed in-play bets can&#8217-t affect which people are actually watching live at the event, nor the transmission delay on coverage for those watching on television.

If a single customer (or a very small number of customers) are able to see events unfold at a significant advantage to others then it&#8217-s necessary to put in a significant delay on new bets, otherwise those customers would be able to exploit that advantage unfairly.

If, on the other hand, there are a large number of customers participating in a market with a shorter delay than the majority of customers then typically that doesn&#8217-t result in unfairness, simply because of competition. Offer an &#8220-unfair&#8221- price and, as long as there is plenty of competition, you&#8217-ll find it difficult to match anyone because others will be prepared to offer a better price. You can be watching the action in an event half an hour behind live, and as long as there are enough customers competing to offer prices you will get matched at a price that&#8217-s fair.

That&#8217-s borne out by the data: tens of thousands of customers win, before commission, on in-play horseracing markets on Betfair- far, far more than could possibly be watching &#8220-fast pictures&#8221-.

Betfair Customer Services
27 Jan 18:29

Innocent Bystander

On behalf of the cricket community may I thank you for adding the Australian Big Bash 2020 Cricket tournament to your betfair live video service. I hope the increase in liquidity in these markets (over half a million being traded per game) has made the decision worthwhile

Is there any opportunity to add further tournaments / series to this offering? For example, the Standard Bank Pro 20 series from South Africa, or maybe one day series between lesser nations &#8211- in the last week there has been one day series between Bangladesh and Zimbabwe, plus Sri Lanka and Pakistan that were not being shown on any channel in the UK. Also the Womens World Cup is being played in Australia in March, is there an opportunity for Betfair video to show these games?

Many thanks

Innocent Bystander

Thanks for your comments &#8211- we&#8217-re glad you&#8217-ve enjoyed the Big Bash Twenty20 tournament. Although we don&#8217-t currently have any additional Cricket events scheduled we are working closely with our providers to look for opportunities to increase the volume of content we stream, from a number of various sports, to improve our offering.

We now stream over 3000 events per year including leading international football (inc. Serie A, Internationals and UEFA Cup), top class tennis including the Australian Open, ATP Masters Series and 50 other tournaments, the best European Basketball, International Volleyball, Championship League Snooker, Darts and now Cricket. In addition to this, we also now stream all UK and Irish horseracing, and we are looking to expand our horseracing offering further in the not too distant future.

Thanks again for the feedback and keep checking the live video service, we&#8217-re confident there will be more live cricket soon.

The Magician (6)
27 Jan 18:31

Follow-up to the 18:17 post

Regarding Betfair&#8217-s help or hindrance of legitimate customer trying to recover ill gotten gains from corrupt layers. In the case where a Mr Nicholls laid 37 horses, 5 of which were found to be non-triers that he laid on behalf of the jockeys. I ask Betfair to confirm or deny if my back bets on those 5 and 37 horses where indeed matched by Mr Nicholls &#8211- as I already had anecdotal evidence they where. Betfairs official response was to say they would not tell me due to Mr Nicholls customer confidentiality (which I don&#8217-t see he deserves) &#8211- but if I got a court request/order Betfair would comply

I would class that as hindering rather than helping? Would you agree?

Ultimately your queston makes a moral judgment when we are by necessity making a legal judgment. Data Protection laws prevent us from giving up that sort of information in that type of circumstance. So to answer your question directly &#8211- does it help or does it hinder &#8211- it does neither: it clearly doesn&#8217-t help because we were in no position to help- but it is certainly not our intention to hinder either. We therefore advised you how you could access that information in line with the law of the land.

Betfair Customer Services
27 Jan 18:34

The Magician (6)

Regarding the ongoing GC Issues Paper into the fairness of IR betting. The GC very briefly discuss and draw conclusions (in paragraph 3.8 ) from data provided by someone presumable an exchange. I have asked the GC commission to publish this data so we can all see if the conclusions they were probably directed to and then agreed to are indeed the correct interpretation given the data. I have asked the commission to publish this data (in August 2008) but to date they have not agreed to my request. Assuming it is Betfair data can you please publish it, or agree that they do.

Betfair made a submission to the Gambling Commission last Summer as part of the Commission&#8217-s in-running betting consultation exercise. If this submission is not published by the Commission when they announce their findings (we understand that they will be publishing their findings imminently), then we will post it on the Betfair Developers Program site (http://bdp.betfair.com/).

There is certain data (including the results of a customer survey which we undertook in early 2008) that we used as part of our submission (and provided to the Commission) which is clearly commercially sensitive, so we cannot make that publicly available. However, our submission does provide details of some headline figures which we believe justifies the conclusions we reached in the submission.

praf974
27 Jan 18:35

Are there any plans to improve your Soccer inplay markets and the data published?

For instance adding score and minutes played into the main market display (and API). One of my major gripes is not being able to tell from betfair alone when the second half has kicked off , The second half kickoff is just as important as the match kickoff which in contrast is highlighted by suspension of all markets and the inplay markets being flagged as inplay. An inplay first half result and second half result would be good (where the second half result doesnt go inplay until the second half kicks off).

On a general point we are happy with the way we manage our soccer markets, but you raise an excellent point about the second-half kick off.

We will raise this with the soccer team.

[x] These checkboxes suck
27 Jan 18:38

Is there any chance that trap numbers could be used instead of names in greyhound markets? This would prevent unnecessary voiding of markets when a reserve comes in. (obviously all bets prior to the reserve coming in would be void)

No. When our customers place a greyhound bet, they are backing a specific greyhound, not a trap number.

Innocent Bystander
27 Jan 18:43

In a previous session I asked whether it would be possible to split the Football section of the forum into &#8216-Football Banter&#8217- and &#8216-Football Betting&#8217-. Seeing as there are 5 Horse Racing sections and even 2 Greyhound sections, is there any chance of providing another Football section so that those who wish to discuss betting (rather than whose fans are the most rancid / which footballer will be burgled tonight) can do so?

It is a possibility and we will consider it, but it is highly doubtful whether the division will be respected. After all, how many times have you seen soccer updates in the horseracing forum?

Innocent Bystander
27 Jan 18:45

How close are you to providing a facility to check whether accounts will be liable for the Premium Charge in real time BEFORE we are charged ?

We expect to have further information for those customers who might incur the Premium Charge in the near future, within the My Account section of the site.

Betfair Customer Services
27 Jan 18:48

Durham Edition

Are betfair staff allowed to bet at work? If so, what measures are in place to ensure that staff do not abuse their access to customer data?

Betfair&#8217-s general philosophy on this issue is that:

– we want our employees to understand how the product works- and
– we do not want to drive betting at work underground.

With that in mind, we allow employees to bet at work, subject to various conditions. Those conditions include that:

– all Betfair betting is undertaken through a single declared Betfair account-
– betting must never interfere with an employee&#8217-s duties at work- and
– employees can never misuse customer data, in relation to their own betting.

Separate teams within Betfair have further restrictions in place to ensure that they are able to do their jobs without the distraction of betting &#8211- for example our telephone betting operators cannot bet on horse or greyhound racing, after midday, when they are likely to be most busy.

In relation to any misuse of customer data, it is worth pointing out that only a limited number of employees have access to such data. All betting undertaken through a customer&#8217-s Betfair account is auditable and any abuse here would be viewed as an extremely serious disciplinary matter.

There was a period several years ago when for regulatory reasons betting at work was completely prohibited at Betfair. This was a period during which our ability to recruit staff with knowledge/interest in our product was almost non-existent. In short, we do not have an issue with staff betting at work, providing it is done in a sensible, controlled and responsible manner.

Betfair Customer Services
27 Jan 18:54

Forum name: One Giant Leap

When you announced the premium charge you said it would affect less than 1% of your customers. How can that be true when so many people on the forum have said they&#8217-ve been charged? What&#8217-s the real figure?

Since we announced the charge just over 1,000 customers have incurred it. That&#8217-s about 0.3% of customers who&#8217-ve been active on the exchange in the same period, which is almost exactly what we envisaged beforehand.

Mr Magoo
27 Jan 18:57

Why does Betfair not do more to protect users from making simple betting errors, like typing in the wrong odds or mistyping a bet? Every day there are clearly bets going through that no-one would have deliberately chosen to do (e.g. someone backing a non-favourite horse pre-race at odds down to 1.03 today!)

Would it be sensible to add in (optional?) checks like:
1) Warn or refuse a bet if the liability (just for that one bet) is above a fixed size. This would save people who have accidentally put an extra 0 into the stake
2) Warn if the odds you are asking for are far away from the currently traded price.

It&#8217-s very difficult to put in place foolproof &#8220-protection&#8221- to prevent customers from placing bets with stakes or at prices in error, simply because there&#8217-s no foolproof way of determining a customer&#8217-s intentions when placing bets. We&#8217-ll consider both your suggestions, although I&#8217-d say that I prefer the first one to the second, just because the markets where you&#8217-re most likely to want to place a bet away from the last traded price are the fastest moving and where you&#8217-d least want us slowing down your bet placement with warnings. Thank you for the suggestions.

delboy25
27 Jan 19:03

with the credit crunch are our funds safe in a betfair account

Yes &#8211- arguably more so than if you just have them in your bank, for the simple reason that by having them with us you immediately split them between a large number of banks. We also have our own company funds similarly dispersed across banks, so there is added protection in that regard as well.

propunter07
27 Jan 19:08

RE &#8211- GOLF PLACE BETTING

with a number of firms betting to 6 places, would it not be common sense to make the place part first 6 instead of 5

We offer place terms that we feel attract the optimum trade from both our backers and layers, and in the case of weekly tournaments this is the first 5.

However, when high profile events such as Majors come around, we do offer Top 5, 6 and 10 markets too, as liquidity is not an issue here.

zeeny
27 Jan 19:11

Are you aware that the current Premium Charge implementation puts Betfair International Customers at a huge disadvantage if the currency of their account is different from GBP?
Could you elaborate on the specific technological reason for having to calculate Premium Charges only in GBP?

We have to have a &#8220-base&#8221- currency on Betfair in which all transactions are revalued. Because we net activity across all accounts for the benefit of those customers who have accounts in more than one currency, we need to bring all those transactions into one base currency. There&#8217-s no reason why this would disadvantage any non-GBP customer, as any variation will be small in magnitude and as likely to be in the customer&#8217-s favour as against them.

Betfair Customer Services
27 Jan 19:17

The forum Q&amp-A is now closed to further questions but we are in the process of answering questions in the queue

Thanks for your participation.

Betfair Customer Services
27 Jan 19:19

My question is:

Do bookmakers with accounts with Betfair keep early morning prices artificially low to attract customers to their own sites?

We think you might be suggesting that bookmakers are backing horses on Betfair to artificially low prices, so that they can then offer marginally better prices to their own customers separately. We don&#8217-t have any evidence suggesting this to be the case, but in any event, if horses (or any other outcomes) are trading at artificially short prices on Betfair, it is likely that the market would react to what would be an obvious opportunity for Betfair layers. In other words, pretty quickly layers would push the price of the selection back out to a more realistic price.

Betfair Customer Services
27 Jan 19:21

Magician (6)

On many occasions (perhaps not in the last 3-4 months, but prior) back bets on slow starters have been &#8216-hovered&#8217- by fast picture or on course layers after the start of the race &#8211- as Betfair was suspending the race to put it in play 1-2-3-4 seconds after the real off. Despite several requests to have these bets cancelled Betfair declined (which I do not agree would stand up if challenged via the GC). Anyway It now seems that Betfair suspend the races at the real time off and as such cut the &#8216-dubious people&#8217- out of this lucrative trade. Given as a user I now have confidence ( through your implied protection) to leave bigger bets in the market approaching the off, will you categorically state that if you miss the start of a race, and I (or others) get hovered that you will facility the repatriations of money &#8211- rather than declining and blocking my requests to get the bet cancelled.

We&#8217-re are continually looking to improve the management of our markets, and we&#8217-re pleased if you believe you&#8217-ve noticed an improvement. However we wouldn&#8217-t agree with your opening assertion. In the vast majority of races nothing will have occurred in the first second of a race that would result in a bet matched at the prevailing market price being unfair, and were we to systematically void any such bets the medicine would be worse than the illness it&#8217-s supposed to cure. A customer who leaves a back bet request up, which is then matched half a second after the off at a fair price will see that he or she is on. It would hard to argue that subsequently voiding that bet is fair.

Equally there are instances where price-changing events happen close to, but before the off, for example a NH race starting with one runner facing the wrong way, or a horse &#8220-playing up&#8221- in the stalls in a flat race. Such instances are cited from time-to-time as examples of Betfair &#8220-missing the off&#8221- when the race has actually been suspended on time. Details of how we deal with those very rare occurrences where we are unable to suspend a market on time can be found in our Rules and Regs.

VIDEO – BetFairs Mark Davies croaks like a frog.

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To watch Mark Davies speaking French:

  1. Internet Explorer &#8212-no FireFox.
  2. Latest Flash.
  3. Go to M6 Replay.
  4. Select &#8220-magazines&#8221-.
  5. Scroll on the right to go to &#8220-Enquete Exclusive&#8221-.
  6. Select Sunday, May 1, 2008 &#8212- Paris sportifs: Quand la Mafia s&#8217-en mele&#8230-
  7. Windows Media.
  8. 9:00 into, they talk about Davydenko.
  9. 11:00 into, they show the BetFair HQ.
  10. Mark Davies is introduced as &#8220-the #2&#8243-. And, later on, they mis-translate &#8220-Managing Director&#8221- into &#8220-Directeur General&#8221-, which means &#8220-CEO&#8221- in French. Let&#8217-s hope David Yu won&#8217-t watch that tape. :-D
  11. His French is not superb&#8230- but quite close to. :-D
  12. Explains that, in the Davydenko match, it was the bets that lead the game &#8212-not the other way around. So, BetFair voided all bets.
  13. I am realizing that the phrase &#8220-the prices of the bets&#8221- (&#8221-les prix des paris&#8220-) is not usable. Better to talk about probabilities to the public.
  14. The rest of that news report is devoted to demonstrating, thru innuendos, rumors, unfounded pseudo facts, and mis-reported true facts, that the Mafia is in control of all world sports &#8212-thru world-wide betting.
  15. At the very end, though, one official (from the tennis federation, the ATP, if my memory is correct) says that they cooperate with some betting operators to stop corruption.

M6 – Enquete Exclusive – Sunday, June 1, 2008 &#8212- Paris sportifs: Quand la Mafia s&#8217-en mele&#8230- &#8211- [Sports bets: When the Mafia gets involved…]

1.6 million French people watched that TV show.

Towards an anti-drugs and anti-corruption body for all sports? – BetFairs proposal…

No GravatarPlay The Game [I like that website title :-D ]:

Betting industry leader calls for sport world anti-corruption agency

8 April 2008

by Michael Herborn

Mark Davies, managing director of global betting giant Betfair, has called for a world anti-corruption agency for sport. He envisions that the anti-corruption agency would operate along the same lines as the World Anti-Doping Agency (WADA), perhaps encompassing the role as both global watchdog for financial as well as pharmaceutical corruption of sport. “There isn&#8217-t a body that sits at the top of sport that&#8217-s something we&#8217-d love to see, a world integrity agency that encompasses both drugs and betting and any other form of corruption,” Davies told New Zealand newspaper the Sunday Star Times at the Leaders in Sport conference in Auckland on 4 April 2008. “For me it should be the same body. If a sportsman is trying to corrupt by enhancing his performance by drugs or trying to corrupt by minimising his performance and make money off the back of it, I don&#8217-t see a distinction.” [&#8230-]

Previous blog posts by Chris F. Masse:

  • 50% of our prediction market luminaries have a MacBook.
  • STRAIGHT FROM OUR TRUISM DEPARTMENT: Money buys happiness.
  • Ron Paul (R) and Barney Frank (D) ally together to attack “the practical hurdles of the federal law, known as the Unlawful Internet Gambling Enforcement Act, rather than its legitimacy”.
  • Clicking on the “SPHERE: RELATED CONTENT” button, at the bottom of each Midas Oracle post, will bring you a list of external webspots.
  • FRIGHTENING: Jed Christiansen’s prediction market blog was briefly overtaken by web spammers, who inserted invisible links to their commercial sites so as to game the Google PageRank system.
  • InTrade ditch market-leader Bloomberg for low-cost, second-tier data provider eSignal.
  • Drawing a parallel between our reluctance to seek advice and the experts’ reluctance to take the market-generated probabilistic predictions in an un-discriminating, un-critical fashion

BetFair’s new bet-matching logic + BetFair Maltas trading on the multiples

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BetFair:

Bet Matching Forum Q&amp-A Session 19/03/08

Betfair Customer Services 17 Mar 11:50

As announced last week we’ll be hosting a Q&amp-A session on the forum this Wednesday evening (19th March) between 6pm and 7pm (UK Time). The purpose of this Q&amp-A session is to answer questions regarding BetFair’s new bet matching logic. To help us get through as many questions as possible you can send them in advance to livechat@betfair.com. Unfortunately it is not possible for us to respond to each Email individually but we will attempt to answer all questions raised via the live Q&amp-A session.

We realise that customers would appreciate the chance to have questions answered on other topics too, but we want to focus this initial session on just the new bet matching logic to ensure that we answer as many questions as possible. For those customers who have questions for Betfair that aren’t related to this topic we’ll be reintroducing regular forum Q&amp-A sessions over the coming weeks. We’ll post more information about those sessions nearer the time.

We hope you find this session helpful and informative

Betfair Customer Services 19 Mar 18:00

Welcome to the Betfair livechat.

Answering the questions this evening are Mathias Entenmann (MD of Betfair&#8217-s UK and Ireland business)- Mark Davies (Betfair&#8217-s MD Corporate Affairs) and members of their teams.

We have received a number of questions in advance which we will start to answer now. If you have any questions which you have not already submitted, please email livechat@betfair.com and we will attempt to answer between now and 7pm (UK time), when the session ends. Please note that you will not be able to post in the relevant forum section.

Betfair Customer Services 19 Mar 18:02
Chatname – Lee (Genuine Scouser)

Do Betfair employ traders to bet in their markets?

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 multiples product is run under Betfair&#8217-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 &#8211- there is no special access to any functionality or data from the exchange. Betfair Malta is charged commission on winning bets in the same way as any other customer in order to comply with relevant regulation and law.

Betfair Customer Services 19 Mar 18:05
Chatname – NB

– Why did you choose not to announce this significant change to your clients? Was it in the hope that we just wouldn&#8217-t notice?

Betfair frequently makes changes to it’s software and we always have to weigh up the balance between keeping customers informed against inundating them with information. In this particular case we’d agree that we’ve done a poor job of assessing the reaction of some customers and communicating appropriately, for which we can only apologise. We’re committed to doing a better job of communicating with customers in future, and this Q&amp-A is the first step in that process.

– You appear not to be using the new bet matching engine on those events that run under the Australian wallet. Is there a particular reason as to why not?

Events run under the Australian wallet are processed on hardware located at our office in Hobart, Tasmania. If we make a change to the software on the UK exchange it isn’t just a case of choosing to switch Australian wallet markets on or off. We have to install the software on the Australian exchange itself. Keeping both systems in sync imposes an overhead, and it’s an unnecessary overhead if, as in this case, there are further changes imminent. We’ve made the decision that our efforts are better spent getting to the complete solution we want in the UK, with price improvements and those bets we could match across selections displayed, and then to look to implement that for the Australian exchange just the once.

– When the SP product was released you announced it in advance and couldn&#8217-t advertise it enough. Why then did you not announce this fundamental change with the same enthusiasm?

Announcing and promoting Betfair SP has had a significant effect on the amount of new customers we’ve been able to attract to Betfair. Once we have the ability to offer price improvements to bets matched across selections, and we can display all the bets we could match, we’re very confident that the vast majority of customers will recognise that as beneficial. Even then that’s still not going to be something that’s going to make a compelling advertisement.

Betfair Customer Services 19 Mar 18:07
Chatname : CLYDEBANK29

– My understanding of the new cross bet matching logic is that it offers neither best execution or common pricing in most circumstances. Is this correct? (By common pricing I mean that if one of my bets is matched using this method it will be matched at that price by another customer).

That’s not correct I’m afraid. The majority[b1] of the bets that have been matched by the new logic so far have been matched at prices where no price improvement would have been possible. While there’s inevitably a temptation to focus on situations that aren’t typical, most Betfair markets aren’t hugely volatile, for example soccer match odds markets. For those markets where prices are more volatile, for example in-play tennis, as I’m sure you’re aware the vast majority of the betting activity takes place on the favourite, so the proportion of bets matched across selections is relatively small.

– What commitment do you have to introduce best execution and common pricing on this new cross bet matching logic? and if you are committed to providing it why have you introduced this change before it delivers either best execution or common pricing in most circumstances? (By common pricing I mean that if one of my bets is matched using this method it will be matched at that price by another customer).

Our developers are already working on providing price improvements when bets are matched across selections. The only factor limiting when we’ll introduce this is how quickly we can develop and test it.

We introduced the current change even without the ability to offer price improvements because we considered it an improvement over the previous situation. One of the biggest barriers to becoming a regular Betfair bettor for new customers is the concept of an “unmatched” bet, an experience they won’t have had when placing bets with our main competitors. 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. Clearly for customers who’ve been with Betfair for some time, and for whom unmatched bets and what to do about them are second nature, that isn’t going to be obvious.

– Can you understand why some customers think that because this new matching logic doesn&#8217-t offer best execution or common pricing in most circumstances that they view you effectively as a player in the market skimming overbroke situations and who is beating the in running delay and therefore cheating on your own exchange to achieve this? (By common pricing I mean that if one of my bets is matched using this method it will be matched at that price by another customer).

I’d suggest that focussing on the in-play delay is missing the point, although it’s easy to understand why a customer might mistakenly come to that conclusion

The purpose of the in-play delay is to prevent someone watching an event either live at the event, or using pictures with a shorter delay, from selectively matching orders on one side of the market or the other following a price changing event(like a goal or break of serve). As the process only matches opposing customer bets, and no bet is matched by this process selectively based on anything that’s happened in the event being bet on the in-play delay isn’t applicable.

Backing one selection is (and has always been) equivalent to laying the other selections in the market. In-play bet matching takes place as soon as the in-play delay has expired on a newly submitted bet request. If we have a bet request to back a tennis player, say, then it would clearly be unfair to match a request to lay that player as soon as the in-play delay expires while imposing a 2nd delay on a customer looking to back his opponent.

Betfair Customer Services 19 Mar 18:14
Chatname : askari1

– How much money has the engine / arber made for Betfair so far? If commercial confidentiality prevents you from quoting a figure, could you give some indication in terms of the total turned over on a typical event e.g a televised tennis match and / or the typical post-game commission taken by Betfair?

The biggest market the new code has operated on was the televised tennis match between Andy Murray and Roger Federer a couple of weeks ago. Approximately ?6.85 million was matched in the market, and the amount accrued as a result of our inability to offer a price improvement when bets were matched across the two players was ?882.91 . Obviously in well-traded markets like a big tennis match the amounts won and lost by customers are much less than the headline volume figure too, but as a percentage of what’s won or lost in each market the amount is small.

Betfair Customer Services 19 Mar 18:18
Chatname : askari1

– Please could you give the company&#8217-s working definition of the terms &#8216-best execution&#8217- in cross-matches and &#8216-of holding a position&#8217-? According to these definitions, does &#8216-holding a position&#8217- differ from &#8216-holding a liability&#8217-? Do you apply the same definition to &#8216-best execution&#8217- in the case of cross-matches as you do to matches in the case of single-runner sub-markets?

“Best execution” means never less than the price you requested, with the prospect of a price improvement where we can do so, if we can deliver that.

By “holding a position” we mean taking an outright position against a customer, rather than matching opposing customer bets.

The definition is the same for bets matched across selections. As and when we have the means to provide a price improvement we will.

Betfair Customer Services 19 Mar 18:20
Chatname : astonvillain

Hi,
how can betfair users be assured that in the case of a market which suspends with a delay such as football, that betfair owned bots will not match bets which are out of line at the time of suspension? there is a big trust issue here.

The times at which Betfair will match bets across selections are identical to the times at which regular matching (backs vs. lays) takes place. If the market is “active” (not “suspended”) and there are opposing customer bets that can be matched then we’ll match them. If the market is “suspended” then no matching takes place, either backs vs. lays or across selections.

Betfair Customer Services 19 Mar 18:21
Dear BetFair,

I hope you will answer the following:

Q. Why did you feel it unnecessary to inform your vast customer base of the changes to the bet matching algorithm in advance and take feedback- or accept that a trial period may have been a more appropriate way to introduce the changes?

It’s Mark here. I made that call and the judgment was based on the fact that I saw this as a product enhancement which was a benefit to users, and we do not announce every one of those every time. It was doing what we have always said we do – using our technology to match demand between customers – and it was just doing it more broadly than directly backer to layer. We have frequently made the statement that we are a bookmaker which is using technology to match demand, and to my mind this fell directly into that.

I think that if you consider a situation where a 100% book saw backers all sit and look at each other (for example, in a two-outcome event, I think it is daft that two backers, one of each outcome at 2.0, should not be matched), that is easy enough to understand. I also feel that in a situation where there is, say, a backer at 2.0 and a backer at 1.98, it is silly for us not to match those bets: we were doing so at the price requested, not worse- and therefore the customer matched was getting the best price that we could offer them, bearing in mind the limitations of our technology currently preventing us from giving a price improvement. If we left a backer at 1.98 and a backer at 2.0, people would think we were daft- and equally, if the price was matched by another customer seeing the arbitrage, the initial customer would only be getting the same price.

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. But I did not think we needed to make an announcement about the fact that we were using our technology to match bets. That is the business we are in.

Betfair Customer Services 19 Mar 18:22
alexe
19 Mar 18:13

Didn&#8217-t anybody at BF imagine this will drain quickly the markets?

Absolutely not – we expected this to increase liquidity and make it easier for our customers to get bets matched. On markets where we’ve had this in operation, that’s exactly what we’ve seen happen – the markets have been more efficient.

Betfair Customer Services 19 Mar 18:23

Andy Fuller: I will email this question but if you read it here first please reply BF &#8211- what have you done with the money you have collected from clients unfairly as you admitted to earlier today?

Under our UK bookmaking licence, these revenues are legitimate profits and have been treated as such. The amounts involved are not what some people were speculating and some people have suggested that the money made should be donated to charity. However, be assured that we will be donating to charity this year far in excess of what the bet matching process has made!

Betfair Customer Services 19 Mar 18:24
Chatname : lippy

Are these changes an attempt to boost betfairs profits for an impending IPO?

There are no plans for a Betfair IPO.

Betfair Customer Services 19 Mar 18:25
Chatname – Get On MASSIVE

Do you ever plan to stop the skimming and give best execution to your customers and if so when?

Betfair has always given a price improvement to bets placed wherever possible, and that approach has never changed. We’d like to be able to offer price improvements across selections too and it’s something we’ve been working on, but it’s much, much more complex than many people imagine , and we don’t have a way of giving customers that improvement yet. We’re hopeful that we’ll have that in place in the next few weeks.

Betfair Customer Services 19 Mar 18:27
Dear BetFair, I hope you will answer the following:

Under current UK regulations you are not required by law to inform your customer base of changes in advance, but under FSA regulations and European Law you would be. Given the strength with which you defended the GC&#8217-s consideration that exchanges should be FSA regulated when the Gambling Bill was first drafted, don&#8217-t you think it would have been wise or prudent to satisfy the most basic of FSA regulations too &#8211- and advise your customer base of material changes to the bet matching algorithm: the key component of the exchange software we all trade on, and one which matches wagers totalling billions of pounds in the UK today.

I am not sure you are correct here: what we were doing here is entirely in line with our licence and what we have always said we do. If you look at repeated statements made about what we are, I (this is Mark) have always stated publicly on behalf of the company that the best definition of a betting exchange is a bookmaker which uses technology to manage its risk perfectly. This is what we were doing here: matching bets in a manner which meant that we, as an operator, had no exposure to the outcome of the event. People have always described Betfair as P2P and told me that our description of the company in these risk-based terms was spin. The reality is the opposite: Betfair is a many-to-many system where demand between customers is matched such that the operator of the exchange does not have risk to the outcome of the event. It is precisely on this basis that we have always been licensed as a bookmaker.

Betfair Customer Services 19 Mar 18:30
Chatname : MoreTea

– Once it was established that best execution was no longer being provided in the new system (in conflict with your own T&amp-Cs and help area), why was it not turned off immediately and an apology made, and why is it still running now?”

– Why did you make a material change to your product which breaks your own terms and conditions and the description of your product in the help area without announcement or warning?”

There was no change to our existing matching process – if a bet could be matched against an opposing bet, that would be done giving the best price available. Adding cross-matching gives another chance to get a bet matched – something we thought, and still think, is an improvement that benefits the vast majority of our customers.

Betfair Customer Services 19 Mar 18:33
Chatname &#8211- Getting Better

Can you confirm that you will not be applying the new matching process to markets such as horse racing that have a reduction factor? If you did I fear that you would be open to abuse on occasions where there was a known or likely non-runner.

Yes, we can confirm that the new bet matching process will not be used on horseracing markets any time soon. If this changes we will let you know in advance.

Betfair Customer Services 19 Mar 18:37
Magician: Specifically did the GC APPROVE this change to the matching algorithm &#8211- or where they simply made aware of it and did not grant or reject formal approval

We did not seek Gambling Commission pre-approval for cross matching before we launched it because we don&#8217-t believe that this was required. However, we were in dialogue with the Commission in relation to the licensing status of cross matching and we would always be happy to address any questions the Commission has on any part of our business.

Betfair Customer Services 19 Mar 18:37
Feck N. Eejit
19 Mar 18:33
Have they answered mine yet? &#8220-Why do horse racing people all wear funny clothes?&#8221-.

John McCririck here… just stopping by Betfair towers, on my to the Ivy, looking for a new gig, what do you mean by funny clothes?

Betfair Customer Services 19 Mar 18:39
the man marcus
19 Mar 18:31

?882 on a 6 mill traded game?

yeah right

We expected to make more money as a result of this change because we believed it would make our markets more efficient and increase the volume matched – the amounts retained through the odds differential are much much smaller than all of the forum speculation would suggest.

Betfair Customer Services 19 Mar 18:40
Chatname Frog

Questions:

1. Is it true that Betfair have started matching bets across selections while not offering best execution? e.g. if two customers want to back different selections in a two outcome event at 1.9 Betfair would lay both outcomes at 1.9 and pocket the overround for themselves.

This is what we were doing but we have announced today that we would take it down until we can deliver best execution as you state it. However, I (this is Mark Davies) think that ‘best execution’ is moot in its definition here. Best execution for me means the best price at which we can execute the bet- and it is not trivial to offer a price improvement on a cross match.

Given the situation I have already suggested, where you have two backers of a 2 outcome event, one at 2 and one at 1.98, I believe that we ought to be matching those bets. Ideally, we should be matching them at 2 and 2, but our technology is not currently able to do that. For me, we should therefore match the bets at the prices asked for.

If you think about there being three options here: that we don’t match those bets- that we match them at the prices asked- or that we match them at the ‘best execution’ you suggest (by which you mean giving the price improvement implied), then clearly the philosophy of the company is to do the third of those. This is what we are working towards. In my judgment, it was better in the interim to do the second, than to leave it at the first. However, clearly many of our users disagree, and this is why we have rolled back to where we were. Personally, I think the second point is a better place to be than the first. I accept that bot users who previously benefitted from that arbitrage will disagree. But, looking back to the early days, many (and I think you were one, frog) objected to bots coming in and taking that arbitrage. You could argue – I would – that it is fairer that we should take that arbitrage, and pay tax and levy on it, than that someone should have a free lunch. However, it is clear that customers disagree and would prefer to leave that arbitrage to the bots. We have therefore decided that we will not match those bets until we can do so with the price improvement.

2. If (1) is the case, is this permanent or do Betfair guarantee they be implementing a best execution algorithm for this in the future?

I think I have answered that above.

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.

Betfair Customer Services 19 Mar 18:41
Chatname &#8211- flapjack

– When will you introduce best price execution on the new matching system for all bets?

We are working on it but it will take a number of weeks.

– On another forum recently, someone made the comparison between Betfair and the bankers in the current Natwest adverts, i.e. you are not remotely interested in what your customers want or what is in your customers’ best interests? Are you aware that this is how a lot of people see you?

We have read all the criticism. Some of it is unfair, in my view (this is Mark here)- some of it pointed out things that we had not considered. Unfortunately you’ll never please everyone. I hope that your assessment that ‘a lot’ of people see us like that is an exaggeration. I think we do spend a lot of time listening to customers, and working to produce a product that they like, and if the perception is that we are not remotely interested, I think it is a misconception. I think we spend a great deal of time listening to customers’ feedback.

Betfair Customer Services 19 Mar 18:43
Chatname – The Magician

Where some users or third party developers informed about this proactively from betfair. Is it betfairs future intention that when changes are made ALL users received the same information regarding the operations of the betting markets

No, customers were informed preferentially. We made the decision that we would answer inquiries individually, and the first question was submitted by a third party developer which was then disseminated more widely. We’ve recognised that we should have communicated this issue to the customer base more broadly, a misjudgement for which we can only apologise, and we’re committed to doing a better job of communicating similar issues in future.

Betfair Customer Services 19 Mar 18:44
Another question to Betfair: To ensure people do not make figures up and blow things out of proportion &#8211- you say you made ?882.91 on the biggest market, but can you confirm that was the biggest takeout you have had from a single event? If it was not can you state what the biggest take out has been and on what event. I think this is important to stop people thinking you are exploiting this situation any more than they already think you are.

TIA. andyfuller

I (Mathias) can assure you that the example given was not unrepresentative or misleading (and cross matching was switched on for the entire market in question). I hope you understand that we have never given out commission data in relation to a market so are not particularly keen to go any further.

Betfair Customer Services 19 Mar 18:47
Chatname : mugsgame

Hi,

I would like to know your intentions regarding using the new bet matching engine on horse racing markets, particularly in play.

There is no immediate plan to operate the new matching process on horse racing markets. There are a number of additional issues with horse racing, particularly withdrawals. If we match bets across runners in a horse race and one runner is subsequently withdrawn we would have to void the bet on the withdrawn horse while honouring bets placed on those that come under orders. Having the ability to offer price improvements where possible is a higher priority, and we’ll revisit horse racing once that issue has been resolved.

Would it be possible for you to put some text into the market rules window stating if the matching engine is being used?

It’s a fair point to want to know if the new matching process is applicable in a particular market. It’s unlikely we’ll make changes to the market rules tab to communicate that, but we will announce future changes to the matching logic and the markets affected in the Service section of the forum.

Betfair Customer Services 19 Mar 18:47
Robin Ewe
19 Mar 18:34

Can you assure us that Betfair will never at any point in the future begin actively trading in the sports betting markets other than to hedge the risks from your multiples product?

No – but Betfair is not in the business of risk-taking on sports markets. That said, we’re always looking for better ways to meet the needs of our customers.

Betfair Customer Services 19 Mar 18:48
Chatname : drifterwins

How much tax will you be paying on money &#8220-skimmed&#8221- from the new system?

The Betfair bookmaking company (which is separate to the exchange) which operates cross matching pays tax at 15% on its profits (like any other UK bookmaker).

Betfair Customer Services 19 Mar 18:55
Lori
19 Mar 18:46

to paraphrase:

&#8220-We think it fairer that we take the arbitrage and pay tax on it, than those who already pay us commission on it, which we then pay tax on&#8221-

I don&#8217-t use a bot, and wish that bots were not an inevitable competitor to me when I trade, but they&#8217-re still owned by paying customers, and I think the customers in a &#8220-customer vs customer&#8221- site deserve the money more than the site. At least they don&#8217-t have to make decisions regarding voiding markets etc.

Also, not all of arb money goes to bots. Also, why not just have one runner in a tennis match

&#8220-Federer win, yes = 100&#8243-

Questions to Betfair

How can you convince us that you can remain neutral as an arbitrator when you have skimmed money from the market?

Why do you believe you&#8217-re going to be popular taking more money from a market than advertised commission rates?

If cross matching at best execution is so difficult, why not just have one-runner in two horse races and settle at 0 or 100 like many other places.

To the first point, we’re not taking a position – merely matching bets that otherwise would not have been matched. Most of our customers simply want to get bets matched, so we believe improvements in our matching process are in our customers’ interests. Having just one runner in 2-runner races would make cross-matching unnecessary but it’s confusing as most people expect to see both names.

Betfair Customer Services 19 Mar 18:58
The Magician (1)
19 Mar 18:54

another quick Q.

why dont you add this new matching algo to the horse racing SP calculation (with best execution), it would certainly make it more robust than it currently is

We are considering adding the cross matching with best execution to our SP markets in the future. However, this is a complex calculation and therefore will only be done at a later stage.

Betfair Customer Services 19 Mar 19:01
Chatname (WH)

Why is giving best execution so difficult?

If 2 people are backing at 2.0 and 1.8 in the same market, it is surely simple to ensure that the person whose request came in first gets the odds they requested and the second person gets better odds than they thought they would get

eg if 2.0 is waiting to back player A and someone submits 1.8 to back player B, then both get matched at 2.0.

if 1.8 is waiting to back player A and someone submits 2.0 to back player B, then A is matched at 1.8, B at 2.2

i cannot see why this is so difficult

It isn’t difficult to calculate for a single instance. Unfortunately Betfair’s bet matching process has to be able to calculate this across multiple markets for thousands of bets each second, and it would be an unacceptable customer experience if doing so caused any delay to the bet matching process. The existing bet matching process has been refined over years, and making fundamental changes to that means coming up with a whole new set of refinements. We’re working on this now and we will have it in place as soon as we’re satisfied the solution gives the performance customers expect.

Betfair Customer Services 19 Mar 19:02
Thanks very much taking part in this discussion. We’ll continue to answer the questions we receive on this subject, via e-mail, and post the relevant Q&amp-As here for you to read at a later date.

Previously:

BetFair Malta’s combo market maker (trading algorithm + human market makers) operating on the multiples

BetFair withdraws / improves its brand-new matching-bet logic, which was (kind of) endorsed by the Chairman of the Midas Oracle Advisory Board.

One un-hired job candidate and one HammerSmith employee tell all about BetFair Malta’s combo market maker (trading algorithm + human market makers) operating on the multiples.

A Betting Exchange = A Bookmaker -> !??

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BetFair:

Betfair Customer Services 19 Mar 18:27
Dear BetFair, I hope you will answer the following:

Under current UK regulations you are not required by law to inform your customer base of changes in advance, but under FSA regulations and European Law you would be. Given the strength with which you defended the GC&#8217-s consideration that exchanges should be FSA regulated when the Gambling Bill was first drafted, don&#8217-t you think it would have been wise or prudent to satisfy the most basic of FSA regulations too – and advise your customer base of material changes to the bet matching algorithm: the key component of the exchange software we all trade on, and one which matches wagers totalling billions of pounds in the UK today.

I am not sure you are correct here: what we were doing here is entirely in line with our licence and what we have always said we do. If you look at repeated statements made about what we are, I (this is Mark [Davies]) have always stated publicly on behalf of the company that the best definition of a betting exchange is a bookmaker which uses technology to manage its risk perfectly. This is what we were doing here: matching bets in a manner which meant that we, as an operator, had no exposure to the outcome of the event. People have always described Betfair as P2P and told me that our description of the company in these risk-based terms was spin. The reality is the opposite: Betfair is a many-to-many system where demand between customers is matched such that the operator of the exchange does not have risk to the outcome of the event. It is precisely on this basis that we have always been licensed as a bookmaker.

Mark Davies, BetFair’s Managing Director (Corporate Affairs)

Mark Davies

GUARDIAN BLOGGER: BETFAIR SPIN-DOCTOR DOES NOT SAY THE TRUTH ABOUT SPORTS CORRUPTION.

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Lawrence Donegan:

Odds-on liquidity showing interest in Scottish youth

Can it really be more than a month since Betfair&#8217-s Mark Davies appeared in print to reject the suggestion that the gambling boom is in any way responsible for the apparent increase in corruption in sport, by pointing out that dodgy dealing has been around since the days of the gladiators? Presumably, reports of 15 football matches from this season being under investigation will see Davis, like Edward Gibbon in a pork-pie hat, return to the fray with another tale from the Colosseum. Meanwhile, far from events at Anfield – figuratively if not geographically – comes news that under-21 games in Scotland are the subject of huge bets by Asian gamblers. Some might think this is a sinister development but not the Betfair spokesman, who told the Daily Record last month that the company would be happy to open a book on the youth sporting market if there was &#8220-liquidity and interest&#8221-.

With all due respect to the Guardian blogger cited above, I side with Mark Davies. See his verbatim, just below.

&#8212-

Mark Davies, BetFair’s Managing Director (Corporate Affairs)

Mark Davies (BetFair’s Managing Director)

&#8212-

Mark Davies interviewed by The Daily Telegraph (in October 2007):

[Tennis] has always been liable to corruption.

I think that all sport has always been liable to corruption, by the very nature of it producing clear results one way or another. They say that chariot races were rigged for financial reward. I don&#8217-t see why subsequent sporting events should suddenly have been less liable to corrupt practice. We would strongly dispute the idea that sport suddenly has a corruption problem because of the boom in gambling.

The amount of money bet in the legal market may have grown — who knows if it has risen or fallen in the illegal one? — but the number of people who can be tempted by that money and use it for corrupt reasons is the same as it always was.