WikiNews: Michael Nutter wins Philadelphia mayoral primary.

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Pinnacle Sports introduced the serious and casual American bettor to reduced pricing, and betting has not been the same since. Even the most casual bettor could see the long term advantage of laying -105 instead of -110. When totaling the wins and losses of hundreds of bets, that five cents saved very well could be (and many times is) the difference between a winning and losing bettor. Alas, Pinnacle Sports is no longer available to the American bettor, who must now seek other reduced juice alternatives.

American bettors have always shied away from betting exchanges for several reasons:

1. Exchange software has historically been more difficult to learn to use
2. Buying and Selling point spreads is different than traditional wagering
3. Volume is often too low. If only $100 has been offered for wagering, that’s all you can bet (unless you make your own offer, which is a whole other fear for bettors!)

Hopefully this article will show that the above concerns are issues of the past, and that bettors should give betting exchanges like Matchbook.com a second look.

American bettors typically think of “live betting” when they think of betting exchanges. Places like WSEX (the parent company of Matchbook.com) and Tradesports have, and still do, offer live wagering on select TV sporting events. But exchanges have become so much more than just live betting venues. At Matchbook, a bettor can find offerings on most of the “Big 4″ games, such as: full game, 1st half and total of all NBA, NFL games, and full game and total lines on MLB and NHL games. Many “current event” bets are also available, such as American Idol and movie box office returns. So exchanges have developed in to “full service” shops, offering almost everything that a traditional wagering shop does.

If laying -105 was great for pregame bets, how good would -102 be? The commissions vary at the exchanges available to Americans: Tradesports charges 3% commission (for those accepting live even money offers, higher for more or less than even money, and the bets win) and Matchbook charges a flat 2% commission (on winning bets only). So, in essence, bettors are playing in to a -102 line—obviously a very large discount from the traditional -110 full juice bookies charge. The commission rules and structures vary between exchanges, and Tradesports and Matchbook are a prime example of the differences that can occur. Tradesports charges the bettor .5% for accepting an in-running offer, whether or not the bet loses (and an additional 3% if the bet wins). Matchbook charges no commission for accepting an offer, only the winner of the bet pays the 2% commission. So, at Tradesports all of the offers you accept in-running will cost you .5% in commission, and winning bets will cost you a total of 3% commission (at even money). At Matchbook, only your winners will cost you 2% commission. It’s clear that all levels of bettors can benefit from such a low commission.

As previously mentioned, Americans have traditionally shied away from exchanges for a number of reasons. One of the main hurdles that exchange software developers had to clear was the difficulty of developing software that functioned like traditional wagering software. Bettors want to be able to look at betting lines in the same fashion as they have done for years, like this:

PHILADELPHIA: J MOYER +1.5 -160 OVER 8.5 -125 +133
NEW YORK N: T GLAVINE -1.5 +140 UNDER 8.5 +105 -143

No exchange offered anything close to this format—until Matchbook.com‘s revolutionary software was released. Accepting and making an offer has never been easier at an exchange than it is now at Matchbook.com. Here is a game currently offered there:

Over 8.5 $234(my potential win) -105$130 -107$1,306 -130$650
Under 8.5 -$242(my potential loss) +101$1,032 +100$100 -104$2,061

You can see that the Over and Under total are clearly defined, with the amount offered right next to the line. You simply click the price (for example +101$1032), enter the amount you want to take of the U 8.5 to the right (confirm box not shown here) and press submit. It’s just that easy. After you place the bet, the amount you are risking and the amount you can win are displayed right next to the totals (not including the 2% commission). You can see in the above example that I bet on the O 8.5 runs in the Braves game tonight. If the game goes OVER 8.5, I will win $234 (minus the 2% commission) and if the game goes UNDER 8.5, I will lose $242. So the bet was not only just as easy to place as it is at a traditional wagering site, but I also have the convenience of having my risk/win displayed all the way until the game goes off the board. The software at Matchbook.com is just as easy to use as traditional betting software, so bettors no longer need to fear having to learn a “whole new way of betting”.

The second fear American bettors have of exchanges is that they have to think of a point spread as ONE ENTITY that is to be either bought or sold. Bettors are so used to thinking of the Braves O 8.5 and the Braves U 8.5 as two things, it’s often difficult for them to switch gears and think of only one thing: Braves O 8.5. When trading on Tradesports you must think of the Braves total as one thing to be bought or sold. You must designate a price, or accept an offer at the current price, and you must BUY or SELL the Braves O 8.5. If you BUY the Braves O 8.5 at 50 for 10 contracts, your position will be reflected like this:

Braves 8.5 +10

If you SELL the Braves O 8.5 at 50 for 10 contracts your position will be reflected like this:

Braves 8.5 -10

Many bettors find that format confusing because they must abandon the OVER and UNDER format they’re used to. At Matchbook.com, positions are bought and sold in the same fashion that traditional wagering is done (see the above Braves total example). A bettor is not forced to buy or sell one object at Matchbook.com, and the bettor does not have to convert the price to a traditional line (e.g. “50″ at Tradesports= a +100 line). At Matchbook.com, a bettor will see the traditional +100 lines format he or she is used to dealing with.

The last main concern of American bettors concerning exchanges is volume. A low juice line doesn’t mean much when only $100 has been offered on the line you want to bet. Volume is rapidly becoming a non-issue at Matchbook.com. By noon, there is usually at least $1,000-$2,000 available on sides and $500-$1,000 on totals for all the main sports. Throughout the day there is anywhere from $2,000-$20,000 available for the taking. And if your line or bet amount is not available, make an offer! Making an offer at Matchbook.com is just as easy as taking an offer; it’s only a two step operation.

Hopefully Part I addressed any fears or concerns bettors that are new to exchanges might have. Part II of this article will uncover some of Matchbook.com‘s future plans and summarize all the pros and cons of exchange betting.

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Part I of this article addressed the concerns American bettors might have regarding exchange betting. Part II will highlight the short and long term advantages of exchange betting, and hopefully solidify exchange betting as a necessary tool in the American bettor’s arsenal.

First, some issues concerning Tradesports mentioned in the Mess Hall forum at MajorWager.com need to be addressed. Part I of this article mentioned that the total commission for accepting an offer that wins would be 1.5%; this is not the case if an offer is accepted pregame. In January, Tradesports changed their commission structure, which included charging no fees for pregame trades. So if a bettor accepts an offer pregame, he will be charged ZERO commission on the trade and at expiry. Also, it was brought up that American bettors currently have very little options when depositing at Tradesports. ACH is not currently online, and it seems that the only way to deposit there is to send a bank wire or paper check. Lastly, it was pointed out that Tradesports bettors can view offers in the traditional American moneyline way (-110) by trading on an alternate website: TradeBetX.

Now that American bettors (hopefully) are over the fear of using exchanges, why should bettors they be using them? What are the advantages?

There are many advantages to using exchanges:

1. Very low commissions compared to traditional bookmaking
2. Live betting options
3. No limit reductions or having an account closed for winning too much
4. Stability from a business standpoint

Bettors can plainly see that any time one can lay -102 instead of -110 he or she must take advantage of the reduced pricing. The live betting comes in very handy when having a pregame bet, and adjustments need to be made during the event (i.e. your bet is a sure loser and you need to get off of it by betting the other side!). Also, there is often good value to be found just betting an event in-running. Many times one will see bettors putting up offers that are, simply put, gifts. Not having limits reduced or an account closed due to winning too much is paramount for the professional bettor. As many shops that supposedly take “sharp” bettors very aggressively limit and boot winning, professional players more than ever, having an out that actually WANTS a bettor to bet more (because they get more commission) is a breath of fresh air. Also, from a business standpoint, exchanges aren’t subject to the drastic swings that traditional bookies are. Players are betting against each other and the exchange is taking a commission. The outcome of any of the games isn’t a concern for an exchange. As long as the exchange has enough volume to generate commission, the exchange is in a solid position to produce a profit.

There are also a few potential disadvantages to using exchanges:

1. Learning new software
2. Difficulty depositing and withdrawing, fees too expensive
3. Not enough volume on games of lesser interest
4. Not offering a full range of games
5. Drastically reduced live betting options and/or very low volume on those games
6. Straight bets only

Management at Matchbook.com was contacted in regards to most of the above. The current climate in the offshore gambling industry has made payouts and deposits very difficult in most cases. One way to move funds easily is to do interbook transfers. Matchbook.com currently offers free interbook transfers to and from: Pinnacle, Olympic, WSEX, Mansion, CRIS, and 5Dimes. When asked why live betting wasn’t offered on every game, Matchbook.com responded as follows:

With the exception of the biggest events of the year, live markets really need a dedicated market maker to keep them trading smoothly. As a result we only set games live if we know we’ll have market maker pricing them up after every play. The alternative (setting all games live) would also make it harder to scroll through the day’s card, as the rotation-number order isn’t always chronological, and you’d have a lot of empty boxes in between the main markets.

While it would indeed create more “clutter” on the site and lots of empty offers (take a look at Tradesports any day of the week), it would benefit Matchbook.com to reconsider the above position. While Tradesports and Betfair obviously don’t make much commission on the lesser games that have very low volume, there is indeed a market for every game. As bettors become more and more comfortable with live betting then more volume will come on even the smaller games that are offered. Matchbook.com should follow Tradesports‘ lead and attempt to offer markets on all the games that they offer pregame markets for and see how it goes. Even a little commission is better than none, and live bettors would like to see more markets available.

As for the volume on markets, Matchbook.com had this to say:

As we enter our third year, Matchbook liquidity is far beyond our expectations in the hours going into game time, but we still need to improve in a couple of areas. Minor NCAAB and NCAAF markets were disappointing last season, and we really need to get better liquidity overnight and in the mornings. We think there will be big improvements here over the coming months, though, in direct proportion to the number of API programs that new users have been developing. API programs allow large-scale users to skip the whole web interface when placing bets, and we’ve been getting requests almost daily for API documentation to facilitate the development of market making programs and arbitrage against other exchanges.

Without a doubt, Pinnacle Sports‘ exit from the U.S. market has facilitated a dramatic volume growth for Matchbook.com. Many posters on the forums refer to Matchbook.com as “the new Pinnacle”. It’s clear that Matchbook.com has a firm plan for future volume and liquidity. They are adding new market makers on a daily basis, and it’s obvious they are becoming the flagship of exchanges for American bettors.

Although Matchbook.com‘s commission structure is low, there are plans being developed to drive commissions even lower. Concerning lowering the commission rate, Matchbook.com had this to say:

However, we do have a new structure we’d like to unveil over the summer. Basically, we will reward people for posting up offers rather than hitting offers that are already there. Even if a market is -108 by +106, we want to get people asking for +107. So far in baseball and the NFL, we’ve been achieving one-cent markets pretty routinely, but the goal is to use a new commission structure to bring in our NBA and college sports to one cent as well. We haven’t finalized it yet, but the basic idea is to charge a discounted rate when you make an offer, and a standard rate when you accept one.

The above would accomplish two things: 1) lower commission rates and 2) increase volume and liquidity. If bettors know they can save 1% in commission, they will post offers instead of sitting back and waiting for the offers to come to them, thereby increasing volume.

There are very few downsides to exchange betting, all bettors should at least give it a try. Matchbook.com is a financially solid operation with lots of volume, and most bettors will find everything they need—with much lower juice. Matchbook.com offers quite a few deposit options; bettors should give Matchbook.com a try and see if it’s a good fit for their betting styles. Now is a great time to give Matchbook.com a look, commission free! Just deposit at least $1000 and a bettor can play for two weeks commission free. Details can be found on the front page of www.matchbook.com (click on the “Big Boy Special” link).

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David Stalcup
Editor-in-Chief, MajorWager.com
editor -at- majorwager <.> com

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Disclosure: Matchbook.com is a current advertiser at MajorWager.com and the author is a customer of Matchbook.com.

Note: Neither MajorWager.com nor the author was solicited by Matchbook.com to produce this article and neither received any compensation for this article.

[This two-part article from David Stalcup is cross-posted from MajorWager: Part I + Part II]

Austin – Boston – Chicago – Houston – London – Los Angeles – New York City – Paris – Philadelphia – San Francisco – Shangai – Seattle – Toronto – Washington D.C. -

The sixth installment titled Rocky Balboa finds the former champion living a quiet and lonely life in retirement. Rocky begins a [comeback] in small bouts, but ignites a media storm when he accepts a fight against the Heavyweight Champion.

Photo

If you visit Philly, one day, be sure to visit the Philadelphia Museum of Art, which is just behind Sly’s back. And take a look at the Rocky Balboa statue controversy (text and photo credit from Wikipedia):

A bronze statue of Rocky was briefly placed at the top of the steps for the filming of Rocky III. The statue was moved afterwards to the Wachovia Spectrum due to a furious debate over the meaning of “art”. The statue was returned for the filming of Rocky V, and also appears at the top of the steps in the movies Philadelphia and Mannequin, but has since been removed. The statue was replaced with a simple set of footprints reading “Rocky.” The statue was returned to the foot of the steps on September 8, 2006.

Variety on Rocky Balboa. (Via the indispensable Matt Drudge.)

A quick response to Chris:
Let me clarify what I think the key puzzle is: the odds of either Democrats or Republicans are – literally – unchanged since the week before the 2004 election. It seems amazing to me that there has been *no news* that is relevant to the 2008 election.

And I don’t really know which way it should have gone (I’m not yet calling ‘08 for the Dems). For instance, Bush winning in ‘04 provides the Republicans with an incumbency advantage. Countering that, the last two years have provided the Dems with an advantage in the midterms, which you might think could persist to ‘08. And the cast of possible candidates is also starting to take shape, and the absence of Warner, the rise of Barak, and the continuing dominance of both Hillary and McCain are all important factors that we didn’t know about two years ago. All of this is hard to reconcile with the odds remaining unchanged.

I[n] response to Mike’s point: he is exactly correct to emphasize the difficulty in discerning the direction of causation between election outcomes and economic outcomes. But that is precisely the point of my forthcoming QJE paper with Snowberg and Zitzewitz (available at: PDF).

In that paper (which is what I describe in the WSJ), we look at stock market reactions to what are clearly random (or exogenous) shocks to the expectations of Bush’s re-election – the leaked exit polls, and the subsequent vote count. These experiments allow us to draw inferences about how changes in electoral prospects drive economic outcomes.

The Abstract Of That Paper:

Partisan impacts on the economy: Evidence from prediction markets and close elections – by Erik Snowberg, Justin Wolfers and Eric Zitzewitz – (PDF) – 2006-03-XX

Analyses of the effects of election outcomes on the economy have been hampered by the problem that economic outcomes also influence elections. We sidestep these problems by analyzing movements in economic indicators caused by clearly exogenous changes in expectations about the likely winner during Election Day. Analyzing high frequency financial fluctuations following the release of flawed exit poll data on Election Day 2004, and then during the vote count, we find that markets anticipated higher equity prices, interest rates and oil prices and a stronger dollar under a Bush presidency than under Kerry. A similar Republican-Democrat differential was also observed for the 2000 Bush-Gore contest. Prediction market based analyses of all Presidential elections since 1880 also reveal a similar pattern of partisan impacts, suggesting that electing a Republican President raises equity valuations by 2 3 percent, and that since Reagan, Republican Presidents have tended to raise bond yields.