Declining Liquidity

[MobiusGrey]

I've noticed a decline in liquidity recently, I originally assumed this was down to the obvious and once covid and restrictions were easier things would be back to normal. However, Ascot was a real worrier, I think even Peter mentioned about a sharp drop off that even he hadn't seen before.

I generally use Betdaq these days where I can, mainly as I make my income from dutching alone so I don't depend on volatility or volume pre-race. What I am concerned about though is the death or end of exchanges. Yes I probably could do what I'm doing across a few bookies but it becomes a pain in the arse to get bets on and there's nothing like BA for placing dutch bets into the market.

Is the death of the exchanges a very real prospect, is anyone else slightly worried or am I panicking unduly?

[Euler]

Probably panicking unduly, but it is disappointing. The big issue I have, is that I have no chance of hitting the higher numbers I have in prior years. I've always been on the edge of what is possible, so my results drop if volume drops. I'm tied to the fortunes of the markets.

I chat regularly and compare notes with a lot of big players, not your 'YouTuber' type 'pro traders' but some of the real traders and it has caught our attention enough to escalate to Betfair.

Currently consensus at the moment is that Betfair, who are not known for being the best judges, have just make a right royal fuck up of the new AML and KYC procedures. That has provided a set back, which I assume they are trying to reverse.

I'd imagine other exchanges are delighted with this stumble and are going to make the most of it. That will probably be enough to provoke a response from Betfair who often seem more focused on the competitive than their customers.

[ShaunWhite]

Regardless of liquidity exchange demise was/is always a possibility due to changes in betting legislation. There's nothing anyone here can do about it so the best thing is to just make hay while the sun shines. The numbers are still much better than they were in the first few years of Betfair and it's already run for about 15 yrs longer than most expected, so I can't see any reason for them to shut up shop just yet

[ShaunWhite]

The big issue I have, is that I have no chance of hitting the higher numbers I have in prior years.

If that's a "big issue" then life must be sweet. Unless you've slipped below 6-figures I'd rank that as a minor irritant.

[MobiusGrey]

Ok this is better news that I was expecting I think. I've always had a smaller account with BF compared to BD in case I need to quickly lay off some liablity should BD go down however I logged in a few weeks ago to BF to find my account had been closed. A few angry live chat messages later and proving my identity and my account was up and running again but seemed uneccessary. All I've had from BD is an email just asking me to confirm in writing I'm happy with my account size and the volume I'm betting at.

Anyway, thank you for the response both Shaun and Peter, I'll stop stressing over something out of my control.

[alexmr2]

It's a shame that it's a paradox to promote the less profitable model over the bookmaker one which the masses continue to use.

Let's be optimistic that as more things go from real life to online, that more people start to realise there's a better price on the exchange and that no legislation comes in to change anything drastically

[ShaunWhite]

more people start to realise there's a better price on the exchange

Therein lies the problem, Joe Punter has no idea what price they'll get. Two guys in the pub can both have exchange bet 30s apart and get very very different prices. And when neither has much appreciation of value, even if both are better than the bookies then the one who got a lower price still feels robbed.

Exchanges are the betting equivilent of a B2B brokerage or a cash-and-carry and just like those, Regular Joe just can't be bothered to get involved just to save a couple of quid. People who leisure bet know they'll lose long-term anyway so if you run out of cash in 9 bets or in 10 bets it makes sod-all difference. People on here have a very different objective to Regular Joe and what we consider important doesn't just translate over to the wider public. Case in point is that Betfair are 21yo this year and they still aren't the natural goto.

[Euler]

The market wide open for somebody to exploit this though?

I always thought that the exchange would be the wholesale market and people would skin apps on top of it to drive money to the exchange. But Betfair got greedy there too and started charging a fortune for commercial licenses and pushed people to a sports book. Basically the worst of both worlds and a shadow of what is possible. Even where legislation is against the exchange, just set up front end sportsbook.

They almost did this as the start but when they realised joe punter was a bit thick, they just took his money and didn't bother telling him he was getting bad value.

The solution is simple: offer people a simple medium and just drive that money to the exchange. Somebody will have the balls to do it you would think. Betfair have a very confused branding message now and ultimately if somebody steps up with the right model. They will suffer.

[LeTiss]

You'll get asked this forvermore, Peter, I know you already have.......but are you honestly not tempted??

You have extreme knowledge of the exchanges, you have a software tailormade for exchanges, you have strong connections with people who have both money and influence.

Is a Bet Angel exchange really unimagineable, or impossible?

[jimibt]

You'll get asked this forvermore, Peter, I know you already have.......but are you honestly not tempted??

You have extreme knowledge of the exchanges, you have a software tailormade for exchanges, you have strong connections with people who have both money and influence.

Is a Bet Angel exchange really unimagineable, or impossible?

i think there's a couple of issues (which aren't unsolvable, but make going to market very difficult)

1. Harware and support for an operation like BF must be astonomical on a daily basis - of course, there's a lot that could be intelligently automated
2. Compliance both with financial bodies and regultory bodies would end up taking most of your valuable time
3. penetrating all the various sports would require a huge effort (you see how bad some of the offs are on uk racing, never mind obscrure football games)
4. Getting a foothold before cash burnout would be a mammoth task.

Those are of course a mixed bag and shouldn't deter anyone wanting to take on BF, but in short, the demand would have to be measured in terms of presenting a compelling case for investors. That said, a crowdfunded model could be interesting, especially if donations could be made either in monetary terms or by offering skills.

Anyone want to kick it off

[wearthefoxhat]

You'll get asked this forvermore, Peter, I know you already have.......but are you honestly not tempted??

You have extreme knowledge of the exchanges, you have a software tailormade for exchanges, you have strong connections with people who have both money and influence.

Is a Bet Angel exchange really unimagineable, or impossible?

i think there's a couple of issues (which aren't unsolvable, but make going to market very difficult)

1. Harware and support for an operation like BF must be astonomical on a daily basis - of course, there's a lot that could be intelligently automated
2. Compliance both with financial bodies and regultory bodies would end up taking most of your valuable time
3. penetrating all the various sports would require a huge effort (you see how bad some of the offs are on uk racing, never mind obscrure football games)
4. Getting a foothold before cash burnout would be a mammoth task.

Those are of course a mixed bag and shouldn't deter anyone wanting to take on BF, but in short, the demand would have to be measured in terms of presenting a compelling case for investors. That said, a crowdfunded model could be interesting, especially if donations could be made either in monetary terms or by offering skills.

Anyone want to kick it off

Could create a WebbFair-Coin and set up an IPO on the blockchain.

At least the white paper would include something tangible from someone well established in the industry, aligned with others that may pitch in.

Could raise about £250 million for starters...is that enough?

[napshnap]

I don't like being paranoid, but I see all of this nonsense stuff going on as a part of forcing "dumb money" to move to crypto and financial markets (through crappy apps, like "robin (you) hood"). It's a global fight for "dumb money".

But part of me wants to stay optimistic and believe that sport exchanges are valuable for big bookies as a tool for benefit from "crowd wisdom" and book balancing. Also, I believe that someday America will open its "borders" and we all will be swimming in 'merican money).

[ShaunWhite]

The big issue I have, is that I have no chance of hitting the higher numbers I have in prior years. I've always been on the edge of what is possible,

Is there any particular reason you've remained a one-man-band rather than going down a similar route to Ranogajec, Bloom etc or some other gambling related business?

[ANGELS15]

The thing I've noticed over the years is how little awareness and lack of interest there is about exchanges among the betting public. Also among those who have heard of them it's typically 'oh that's where they bet on horses to lose' and references to scandals involving connections allegedly laying their own horses.

There also appears to be a decline in interest among the younger generation in sports betting anyway. That's a shame as we need more people to open accounts to provide more liquidity. The people who tend to open exchange accounts know the importance of value and tend to be better judges of the markets. Most of the others see it as purely recreational so them there's no appeal in exchanges.

The worst thing that could have happened are bookmakers buying exchanges. They control the purse strings and exchanges are merely tools in their arsenal. They don't do a great job of promoting the exchanges but will be ready to up their game if they suspect another serious rival enters the arena.

[arbitrage16]

There also appears to be a decline in interest among the younger generation in sports betting anyway. That's a shame as we need more people to open accounts to provide more liquidity.

Do you have any evidence to back this up, beyond anecdote?

Just as easy to craft the narrative that as the absurdity of 9-5 creeps home, and the ability to buy a home becomes further and further out of reach, the cash out generation - my generation - looking for the big play to get out of this ridiculous system see sports betting - 6 figures! three hours a day! - as an obvious route, like other forms of trading, to freedom.