Chris, if you read the article header (”French government moves to ban betting exchanges”) you’ll notice that it says ‘moves’, and doesn’t say that Betfair is already banned anywhere in the piece. I agree with your view here that it is not yet set in stone. [*]

On the two arguments they cite I would like to add the following. First, that to say each trader on a betting exchange is a bookmaker is flawed. To be a licensed bookmaker you are responsible for, amongst other things, holding customer funds, preventing underage gambling, preventing crime and money laundering, assisting in the maintenance of integrity in sport and to create/settle the betting markets themselves. In addition, all licensed operators pay tax as set out by relevant authorities. All licensed betting companies, including betting exchanges, are required to do these things as part of their license. Individual customers, of traditional bookmakers and exchanges alike, are not. Put simply – traders on exchanges do not have to do anything that a licensed bookmaker has to do and so clearly cannot be said to be bookmakers themselves.

That’s the core argument. The other would require someone explaining to me what the difference is between ‘laying’ Liverpool on an exchange in, for example, Chelsea v Liverpool, versus ‘backing’ both Chelsea and the draw with an ordinary fixed-odds bookmaker. There is no difference.

On the second point, the 2007 study, it’s important to acknowledge that all licensed operators take the issue of problem gambling extremely seriously, and are rightly required to do so. It is true to say that exchanges are shown in the study to have a higher rate of associated problem gambling than other forms (9.8%), with the exception of spread betting (14.7%) and fixed odds betting terminals (11.2%). The flaw in the methodology, we believe, is this. The study takes account of all betting through exchanges. However, betting via bookmaker shops and telephone with traditional bookmakers is broken down into separate categories based on ‘type of bet’. The study breaks down ‘offline’ bets into ‘dog races’ (5.2%), ‘horse racing’ (1.7%) and ‘betting with a bookmaker (other than horse or dog racing)’ (3.9%).

The study, however, does not produce a similar breakdown of ‘type of bet’ made with exchanges. Therefore all bets made on exchanges, be it on racing, football or greyhounds etc, are being compared only to separate groups of bets made offline with traditional bookmakers. An analogy would be to compare the number of loaves of bread sold by supermarket ‘x’ in a week with the total number of all products sold by supermarket ‘y’ in a week, and then suggest that supermarket ‘y’ had a higher sales rate based on that information.

Moreover, this whole study was based on a sample of just 10 people. [**] While problem gambling is a clear issue that needs and is treated very seriously by operators, more reasoned research should be used.

The French action is yet another reason for people to sign the http://www.right2bet.net petition.

Mike

[*] Apology.

[**] See Mike’s detailed comment, just below.

1. There has been a carefully orchestrated plan to keep me out of the loop —so that I don’t report anything to you.
2. I have censored myself so as not to tell you what I know.

If you know anything, and want it published, contact me.

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Download this post to watch the video if your feed reader doesn’t show it to you.

Three remarks:

• They got carried away from the prediction market approach (which, unlike InTrade, they never understood fully, anyway).
• This gambling approach of the marketing of the prediction markets is very interesting in terms of potential revenue growth. I encourage InTrade, TradeSports, BetFair, NewsFutures and HubDub to adopt it.
• However, it remains to be seen whether TradeFair is the right venue for gambling. TradeFair was supposed to be a serious financial prediction exchange (the British equivalent of HedgeStreet), and it is now the online equivalent of Macao or Las Vegas. Hummm… Will these 2 different worlds mix well together? Could La Callas sell pork sausages? Could Yehudi Menuhin sell used condoms?
• And I won’t mention the issue of problem gambling, which I predict will be made worse thanks to TradeFair Hi & Lo and BetFair Arcades.

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Once the previous bet is resolved, you can start off anew with another 5-minute bet on the FTSE —from the level that was the basis for the settlement of the previous bet.

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BetFair Arcade

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