Betsham
Posted by Niall O'Connor | Filed under Betting Exchanges, UK
As somebody who likes to “back and lay” on UK horse racing, I was more than annoyed, when having placed a bet on a UK horse race, Betfair’s software malfunctioned, meaning that I was unable to lay off my bet as was my intention. To those of us that engage in backing and laying, the result of the race is irrelevant; we are trading on price movements and price movements alone. It was my belief (mistaken) that the contract that I had entered into with Betfair, would ensure that at all times Betfair would provide me with the means to back and lay, and that where it was unable to do so, the company would rule that as a proper market had not been formed on the race, my bet would be declared void, and my stake monies would be returned. Alas, this was not so, as the following reply from Betfair makes clear;“As the site was not available to any customers between 2 – 4pm, no bets were placed during this time and as this was due to matters beyond our control, our terms and conditions (11.3) state that:We are not liable for the failure of any equipment or software howsoever caused, wherever located or administered, or whether under our direct control or not, that may prevent the operation of our betting services, impede the placing of orders for bets or the matching of bets, or prevent you from being able to contact us. In particular you should be aware that if you place a bet with the intention of subsequently placing a separate bet to reduce the liability incurred by the initial bet, there can never be a guarantee that the Exchange will be available at the point you wish to place the subsequent bet." As it happens, the race concerned was the 2.45 at Fontwell, which somewhat contradicts Betfair’s statement that; "As the site was not available to any customers between 2 – 4pm, no bets were placed during this time." That aside it would seem that I have been snared by Betfair’s all encompassing exclusion clause, to the effect that; "In particular you should be aware that if you place a bet with the intention of subsequently placing a separate bet to reduce the liability incurred by the initial bet, there can never be a guarantee that the Exchange will be available at the point you wish to place the subsequent bet." I do not accept that this exclusion clause is fair or equitable, and accordingly I shall seek legal advice as to its efficacy. In the meantime, I will no longer use my Betfair account. Betfair are rumoured to be lining up for a 1.5bn flotation; it is a disgrace that they do not have back up servers to prevent their site from crashing. When such an occurrence does take place, it is in Betfair’s interest to return all bets. Betfair, the revolutionary betting company, have much to learn about the concept of goodwill. I would also be interested to know whether betfair are insured in relation to such market failures, and whether the Gambling Commission would consider fining Betfair each time such a failure occurs.
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Price Wise
The Racing Post's Pricewise put up Khachaturian for a race at Doncaster on January 30, at the best-price of 12/1. There was only one problem, twelve hours before the newspaper hit the streets, the horse was already backed down to 10/1 in most places. By 10pm on the Friday evening only Sportingbet still had the horse at 11/1. By the time C4's horse racing programme the Morning Line came on air at 8pm on Saturday and announced that
Khachaturian "Pricewise's Selection" was being supported, he was a best-price 10/1. Week after week we have seen the same pattern; somebody somewhere is getting hod of the Priceiwse selection and backing the horse long before ordinary punters have had the chance to buy the newspaper. For the past three months I have monitored betting activity on the Pricewise selections, noting which traditional bookmakers are cutting them first and seeing on what betting exchanges the money suddenly builds up for the selection. It is hardly rocket science to determine
which horse is Pricewise and accordingly hedging behaviour, coupled with bookmakers running for cover quickly drives the price down. I posed a messgae regarding this phenomena to the betfair Forum, but for some reason the so called moderators did not see fit to publish it (...). Pricewise is historically one of the Racing Post's key assets; a situation that sees his recommended prices already gone by the time that the paper hits the street, is hardly in the paper's best interests. One imagines that it would not be too difficult to work out who the culprits are that are leaking news of Pricewise's selections through backing it with particular bookmakers. Perhaps in the interests of fair play, betfair could also do a little bit of historical research to highlight just who their clients are that seem to have the magic Pricewise touch. Pricewise is dead..long live Pricewise.
Market Arbitrage
Unlike most of the existing literature on sports betting, which concentrates on arbitrage within a single betting market, this paper from Franck, Nüesche and Veerbeck, breaks new ground by examining inter-betting market arbitrage; that is, it examines arbitrage opportunities that arise through combining bets with traditional bookmakers and on the betting exchanges (ARBS). Using the posted odds of eight different bookmakers and the corresponding odds traded on Betfair for 5,478 football matches played in the top-five European leagues during three seasons, the authors found only ten intra-market arbitrage opportunities. However, what was most significiant was that they found 1,450 cases in which a combined bet at the bookmaker odds as well as at the exchange yielded a guaranteed positive return. Further analysis revealed that inter-betting market arbitrage opportunities emerge from different levels of informational efficiency between the two betting markets. In other words they find that bookmaker odds are less informationally efficient than betting exchange odds.
Europe Endless
PartyGaming has announced an exclusive, five-year agreement to provide an online gaming platform for poker and casino games in Denmark for monopoly provider Danske Spil. The Danske Spil Group achieved turnover of DKK 10,955m in 2008, and allegedly has 500,000 registered online customers. The agreement will allow the monopoly provider to strengthen its hand in the area of poker and casino games ahead of the partial liberalisation of the Danish betting market, planned for 2011. Whilst many will be quick to laud PartyGaming for entering into this B2B deal, it could be seen as a clear admission by the company that it does not stand much of a chance of breaking into the Danish market on its own (something that the likes of Ladbrokes are attempting to do). It would seem that Paddy Power have reached a similar conclusion vis a vis the French betting market, having recently signed a strategic deal with the current French monopoly betting provider the PMU. These deals will only serve to strengthen the hand of the monopolist companies, when their betting markets are finally thrown open to outside competition.
Most punters lose. Most punters don't want to admit they lose. Most punters think that they know best. Many punters are prepared to pay up for get rich quick schemes; to buy the advice of tipsters and to buy the latest tome from the latest professional punter who has deciced to share his pearls of wisdom with us. Most punters are ignorant as to the inner workings of the betting market. This classic book, available in paperback for the first time, goes some way towards opening the door. Paul Twomey, for example, focuses upon the efficiency of the horse racing spread betting market. He highlights situations where one can use signals in the fixed odds market to make profits in spread betting, highlighting the fact that the market makers at the spread betting companies are less influenced by developments in the broader betting market, than by the make up of their own individual books. (One wonders to what extent they are more influenced by the moves occurring on the betting exchanges?). Throughout the book, there are a number of little nuggets of information, which should be of interest to any serious punter. These include, the fact that late bettors are best identified as profit maximisers; the fact that above average returns can be obtained by backing all horses trading at less than 1.4 to 1.0; the fact that there is a best time to bet the favourite; how the behaviour of bettors in later races differs significantly from those in earlier races; how higher returns can be earned by playing "rare" numbers in the lottery; those situations where bookmakers may (falsely) believe that inside information is most at work; the perceived presence of insider traders operating in lower grade horse races, etc...We are also introduced to the notion of "Qarbs" - quasi arbitrage opportunities. The "Qarb" strategy involves exploiting price differentials amongst all of the prices offered up by the different spread betting companies. The apparent success of the Qarb strategy leads to the conclusion that; "This finding casts doubt on a hypothesis that market-makers who set quotes out of line with the prevailing market view do so because they possess better (even privileged) information, or that they are able to process a given set of information more effectively than the market as a whole."
Over the past twelve years the traditional betting industry landscape has altered beyond all recognition, as the internet has ushered in the forces of disintermediation, deconstruction and deregulation.
The lines of demarcation have become blurred - traditional betting shops now resemble mini gaming emporiums; mobile phones are being turned into casinos on the move. Betting exchanges, with their unique back and lay architecture, alongside low transaction and information costs, have upset the status quo. Regulators are presented with the task of regulating nascent and constanly evolving technologies. State monopolies within Europe are coming under pressure, whilst the US has now moved to outlaw online gambling. Within the betting market itself, inter-betting market price arbitrage is serving to undermine the role of traditional pundits and traditional form book centred structures. Providing independent and objective analysis, Bettingmarket.Com, the betting industry's online betting journal, has been there to record it all. Putting paid to the lie that the truth is something that can only be spoken about in the shadows. "Bettingmarket.Com is the most authoritative and influential betting industry journal in the world, with exclusive news,reviews, and the links that matter". Articulacy amidst a sea of obfuscation. Coherence amidst the chatter.