Is BetFair (a de facto monopoly) playing evil with traders and developers?

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Two serious issues.

ISSUE ONE: The Sporting Exchange forbid any independent order-entry software for the BetFair prediction markets to be used for the other prediction exchanges.

Chris Gibbs:

BinarySoft Chris 22 Apr 17:59

Part of the agreement we signed with Betfair was that our product(s) are not allowed to access other exchanges simultaneously. I&#8217-m considering developing a separate product for the purple place, but I need to be convinced that it&#8217-s worth my time and effort first – realistically it&#8217-s a competitve enough marketplace on Betfair, which itself has around 95% of the betting exchange market.

Also, most of the API vendor software (including mine) would require significant re-design in order to have 2+ copies of the application running simultaneously, without requiring multiple monitors etc.

My thoughts:

  1. This is a very grave issue.
  2. The (paying!!!) traders using any independent order-entry and analysis software package should have access to whatever prediction exchange of their choosing. Some British anti-monopoly agency should step in, here.
  3. As a result of BetFair&#8217-s monopolistic and evil behavior, we will never have any independent, multi-exchange, order-entry and analysis software packages. That is greatly needed, since the last decade has seen the creation of many (real-money or play-money) innovative prediction exchanges. It would be great to have one local software managing the totality of our portfolio of event derivatives, regardless of which exchange floats them.
  4. I don&#8217-t understand why BetFair is playing evil here. They have a naturally built de facto monopoly (95% of the betting exchange market in the U.K.). Betdaq is not a threat. That evil contract clause is unnecessary.

ISSUE TWO: The Sporting Exchange has output a free order-entry software for the BetFair prediction markets, and the independent providers of order-entry and analysis software packages say it&#8217-s unfair competition to them.

Chris Gibbs:

Betfair should not be releasing free alternatives to products in the Solutions Directory, especially if it&#8217-s the case that they are not subject to the same data request limits as everyone else!

I don&#8217-t feel particularly threatened by Betfair Rapid at present, but Betfair probably have access to more resources (programmers) than all of the API Vendors combined.

Because it&#8217-s not a level playing field:
1) API Vendors pay Betfair ?200/month for full transactional access- the Betfair Rapid developers pay nothing.
2) API Vendors generate revenue by charging users a usage fee- Betfair Rapid can offer the product for free and Betfair benefits from the commission generated by Betfair Rapid users. Betfair also benefits from the commission generated by users of API Vendor software.

Ghetto – I wouldn&#8217-t be surprised if they add more and more features over time, what is there to stop them?

It&#8217-s not ridiculous at all – as explained above, it&#8217-s not a level playing field. Betfair are doing a very good job of alienating their API vendors – I&#8217-ve spoken to other vendors about this and they completely agree.

My thoughts:

  1. The Sporting Exchange should apply the same rules to the BetFair Rapid unit and the independent developers.
  2. It&#8217-s good business for a company to have a network of third-party applications. I have Apple Macintosh and Twitter in mind, right now. These third-party applications add great value to the whole experience. It&#8217-s important to keep the third-party developers happy.

UPDATE: Here&#8217-s the way to promote innovation for entry-order and analysis software packages &#8212-separate the 2 functions.

2 thoughts on “Is BetFair (a de facto monopoly) playing evil with traders and developers?

  1. Section 2.3 (k) of the BetFair API agreement says you can't make a product which promotes any other exchange. That's evil, because it means we will never have multi-exchange, order-entry software for (real-money and play-money) prediction mark said:

    […] Previously:Is BetFair (a de facto monopoly) playing evil with traders and developers? […]

  2. Here's the way to promote innovation for entry-order and analysis software packages -separate the 2 functions. | Midas Oracle .ORG said:

    […] April 2008, I blogged furiously against a clause in BetFair’s API contract that forbids developers of independent entry-order […]

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