The Commodity Futures Trading Commission and Securities and Exchange Commission will have authority to decide what derivatives must be centrally cleared rather than letting private parties make the call.

&#8220-Central clearing interposes a regulated clearinghouse between the original counterparties in a derivatives transaction and so creates an opportunity to make dealing more transparent.&#8221-

CNBC video

Feedback trading in prediction markets

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Robin Hanson is schooled about prediction market trading.

Our guest author to our Master Of All Universes:

Feedback trading just means the kind of momentum trading that is pervasive in traditional assets, again, less so in prediction markets. In the biastest experiment, traders were given formal &#8220-clues&#8221- about the settlement, but for many market participants, the best &#8220-clue&#8221- (even rationally, if lazy) is recent price action. Even if feedback trading was possible within the experiment, the outcome (manipulation attempts were corrected) suggests that it wasn&#8217-t prevalent.

In this experiment, traders were given equal endowments of shares/currency&#8230- i.e. initially had equal account sizes. Yes, there were an equal number of manipulators and non-manipulators, but they could not coordinate. Even if they were implicitly coordinating, this is not the same as a single large trader influencing the market. Yes, in the theory paper trading sizes were variable, but according to the same parameter for each trader. Maybe if there were a large supply of potential traders able to frictionlessly join the manipulated market, a manipulator&#8217-s relatively deep pockets wouldn&#8217-t matter.

The Robin Hanson manipulation papers make unrealistic assumptions, but its not like prediction markets are a bad idea…!!…

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In terms of unrealistic assumptions in Robin Hanson&#8217-s series of papers on manipulation, the major ones have been out there since at least 2004.

Despite some limited evidence, the insistence on traders needing to know the direction of manipulation isn&#8217-t too compelling since the direction will be manifest insofar as the price is &#8220-wrong.&#8221- &#8220-Noise trader&#8221- is a politically loaded and misleading term. Misleading because it suggests that the mean effect will be zero, when in reality &#8220-noise trading&#8221- usually takes the form of feedback trading. Lack of feedback trading is a significant assumption in the Hanson manipulation papers. Fortunately, prediction markets have objective settlements at specified times, unlike traditional assets where the meaning of prices is open to interpretation, making them more prone to feedback trading and irrational booms and busts.

With prediction markets, conditions for manipulation are more favorable when the settlement is far off in time, and when there are subjective inputs to the settlement, e.g. in politics. A distant settlement simultaneously makes it less clear what the real price should be, and delays manipulator losses because there is less incentive to correct price. At the limit, a manipulator could introduce a price distortion when a contract is launched, only to reverse position for small liquidity-related loss immediately before settlement, thereby destroying the markets &#8220-integral&#8221- of error over time.

Another big assumption, also identified by Paul Hewitt, is that traders have equal account sizes. But maybe this isn&#8217-t a huge problem if settlement is forthcoming, and maybe the issue could be mitigated with additional exchange disclosures, such as the standard deviation of position sizes in a given market. While this could discourage liquidity as large traders would become paranoid about their positions, it is essentially a &#8220-soft&#8221- position limit, and traders would be forewarned of one-sided markets (which could of course be the result of someone well-informed, but I &#8211- the google-anonymous* writer &#8211- would bet that more concentration comes with more error on average&#8230- this can be tested by someone with the data, of course maintaining trader anonymity)

Even accounting for long-term settlement, feedback trading, semi-subjective settlements, and account size imbalances, it seems one would have to abide to an overly rigid tenet of &#8220-do no harm&#8221- to hold that prediction markets are, on net, a bad idea. (Do no harm is of course abhorrent to libertarians, and even doctors don&#8217-t actually follow such a rule.) Moreover, some pathologies like political self-fulfilling prophecy will only happen if prediction markets have already demonstrated their value and have become more popular. But even if one believes in their long term success, single pathologies can damage one&#8217-s reputation permanently&#8230- if one plans to die at a reasonable age.

[*Given the political climate, many firms have issued directives to employees to not engage in even the slightest appearance of impropriety, which might include blogging on manipulation.]

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.


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 [email protected]. 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 [email protected] 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.

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.

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.

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.

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 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.

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 (

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.

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.

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.

27 Jan 19:08


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.

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.

The New York Times on InTrades US political election prediction markets

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The NYT writers discusses 2 (different?) issues.

#1. There was market arbitrage opportunies in the recent past between InTrade and BetFair &#8212-unlike 4 years ago, and contrary to the laws of economics.

– The price of the Barack Obama event derivative was cheaper on InTrade than on BetFair and the Iowa Electronic Markets. Conversely, the price of the John McCain event derivative was more expensive on InTrade than on BetFair and the Iowa Electronic Markets.

#2. The NYT writer reports (without linking to it) the findings of the InTrade investigation about the behavior of their unnamed &#8220-institutional investor&#8221-.

– InTrade CEO John Delaney suggests that that institutional investor:

  1. might operate on InTrade at specific times where it might not be able to find liquidity on BetFair and/or IEM-
  2. might be a bookmaker willing to hedge its risks on a prediction exchange (a.k.a. betting exchange).

– Justin Wolfers&#8217- PHD student remarks that that institutional investor is not making an effort to shop around for the best prices, within each InTrade political prediction market.

RELATED: See the comments on Midas Oracle here, here, here, and here.

The blogger at Marginal Revolution misinforms the public by repeating the misinterpretation thrown around by liberal hack Paul Krugman about the alleged manipulation on the InTrade prediction markets.

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Alex Tabarrok writes that &#8220-someone was manipulating Intrade to boost John McCain&#8217-s stock price&#8221-.


John Delaney said that that firm has been hedging on InTrade &#8212-a normal and beneficial activity on the other (larger and more liquid) financial markets.

InTrade is not liquid enough to weather (quickly enough) the impact made by the hedging activities, at this time, but will in the future, if growth continues.

Manipulation is bad.

Hedging is good.