I have scanned and examined the UK Gambling Commission’-s survey report on gambling and betting (PDF file), titled British Gambling Prevalence Survey 2007, and I have found out that there is a big problem in their list of gambling and betting activities. The problem is that survey respondents, who have been using a ’-spread-betting exchange’-, were never been told specifically whether to select the “-betting exchange”- category or the “-spread-betting”- category. That should not be because there is big difference between a classic betting exchange (like BetFair, owned by The Sporting Exchange), which is regulated by the UK’-s Gambling Commission, and a spread-betting exchange (like SpreadFair, owned by Cantor Fitzgerald), which is regulated by the U.K.’-s Financial Services Authority (the equivalent of SEC + CFTC).
Indeed, spread bets (via a spread-betting bookmaker or via a spread-betting exchange) are high risk products, where the bettors/speculators need to deposit only a small percentage of the value of the bet. That is not the case with BetFair, which is a classic betting exchange. Here’-s what is stated by BetFair:
Betfair do not offer credit facilities to our customers. Unlike some spread betting firms, we are not regulated by the Financial Services Authority in the UK. The reason that we do not offer credit is that the concept of the exchange relies on the fact that you must have the funds that you are staking in your account. When you place a bet, that money is secured by Betfair until the bet is settled and the funds paid out to the winner.
So the Gambling Commission survey report (cited like crazy by all the gregarious British media today) goes directly in my trash can. It’-s a pity since we really need to know whether our beloved classic betting exchanges generate “-problem gambling”-. We can’-t know that for sure reading this survey report, since they mixed up oranges and apples.
WHAT THEIR SURVEY FORM READ:
11. Betting exchange – (This is where you lay or back bets against other people using a betting exchange. There is no bookmaker to determine the odds. This is sometimes called ‘-peer to peer’- betting.)
15. Spread-betting – (In spread-betting, you bet that the outcome of an event will be higher or lower than the bookmaker’-s prediction. The amount you win or lose depends on how right or wrong you are.)
HERE ARE THE GENERAL FINDINGS OF THE SURVEY REPORT: