Smarkets's skullduggery

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foxwood
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From the FAQ it applies where "more than 1500 bets or stake more than £1m in a calendar month"

Applies to placing of bets "whether they are unmatched, partially matched or fully matched" - so cancels / scratches all count and incur commission it seems.

Guessing that many on here would easily break the number of bets limit
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Dallas
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foxwood wrote:
Mon Nov 12, 2018 6:44 pm
From the FAQ it applies where "more than 1500 bets or stake more than £1m in a calendar month"

Applies to placing of bets "whether they are unmatched, partially matched or fully matched" - so cancels / scratches all count and incur commission it seems.

Guessing that many on here would easily break the number of bets limit
about 2 weeks ago Peter did over 1/2million in matched bets on a Saturday afternoon
spreadbetting
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The fact it applies to unmatched bets is one way of protecting their current market makers from any competition so few people will litter a market with prices other than their own market making operations.
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LeTiss
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RIP Smarkets
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Naffman
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More short sighted than Betfair and Matchbook :lol:
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Does seem a backward step, Betfair can handle 1000 bets an hour from their customers without additional charges whereas smarkets appear to be struggling if an estimated 0.2% of their customer base place over 1500 bets a month.
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Euler
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It's interesting to see the industry head in this direction.

I sort of get the feeling that the PC pushed the customers that Betfair didn't want to other exchanges and now they don't want them either.

There does appear to be a gap in the market for a pure free flowing exchange.
vide0star
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Euler wrote:
Mon Nov 12, 2018 8:10 pm
It's interesting to see the industry head in this direction.

I sort of get the feeling that the PC pushed the customers that Betfair didn't want to other exchanges and now they don't want them either.

There does appear to be a gap in the market for a pure free flowing exchange.
Providing liquidity in sports is very difficult. We, for example, market make 50k-100k contracts concurrently 24 hours a day on multiple different exchanges. There's a principle in market making called adverse selection (https://en.wikipedia.org/wiki/Adverse_selection), which says for all things being equal, you're more likely to get filled when you're wrong than when you're right. Adverse selection happens in all financial markets but it's particularly acute in sports. Think goals, team sheets, red cards, inclement weather, etc, etc. This makes sports market making extra difficult. To put this into perspective, we have many, many positive six figure customers and even a trader over seven figures.

This pro tier commission structure tries to find the right balance between power users that aren't market making and market making. If you are making prices, we'll happily switch you to a market maker friendly tier.

A "pure" exchange isn't possible, at least, not until the exchange market is an order of magnitude bigger. There's not enough retail flow with the exchanges that would make a betting exchange akin to a stock market. We're hoping to change that with SBK, but we'll see.

For a new pure exchange to exist, you would need market makers, of which there are very few. There are so few that we now think we're the largest sports market maker in the world. The Betfair exchange will work to a point b/c they have a good amount of synthetic market making with customers and some market makers, but you've already seen those markets continue to get softer as we take the exchange retail flow away from them.

I'd be happy to do a podcast on this...
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Euler
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vide0star wrote:
Tue Nov 13, 2018 11:03 pm
There's a principle in market making called adverse selection (https://en.wikipedia.org/wiki/Adverse_selection), which says for all things being equal, you're more likely to get filled when you're wrong than when you're right. Adverse selection happens in all financial markets but it's particularly acute in sports. Think goals, team sheets, red cards, inclement weather, etc, etc. This makes sports market making extra difficult.
In essence, I think that's probably the most eloquent explanation I've seen of why the PC or similar exists. I've struggled to put it into context, but that actually does it quite well.

The problem I have with Betfair's implementation is that they must know that I offer most of the time in the markets, but I get treated like a Viking warrior who is out to rape and pillage. Contrast that with Betdaq who have done everything possible to encourage me to be active. It just feels like Betfair have let their corporate objective overcome their objectivity.
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northbound
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vide0star wrote:
Tue Nov 13, 2018 11:03 pm
A "pure" exchange isn't possible, at least, not until the exchange market is an order of magnitude bigger. There's not enough retail flow with the exchanges that would make a betting exchange akin to a stock market.
That's a very good point, Jason.

Which brings me to the question: why is that? Do you reckon it's because many countries (e.g. Italy) won't let an exchange operate so this limits the number of potential market participants? I reckon that's a big factor, but also because all existing betting exchanges:

- Do a poor job of educating people on how they can trade sports like they trade stocks/futures markets
- Dilute the exchange product and confuse people by introducing a bookmaker under the same brand
- Have poorly designed websites that make sense only to geeks

Perhaps the way forward is to build a sports betting exchange website the same way Digitex are building their futures trading platform:

- Ladder interface built into the browser
- Decent charts built into the browser
- Zero or very low commissions
- Trade using tokens which user can exchange for real money
- Use smart contracts to manage funds
- Great marketing, modern simple video teasers
- Fuck KYC, make it extremely simple for people to register and start trading
- Only implement KYC if you are forced to later on (by which time you will hopefully have generated enough hype)

Digitex sold $5m worth of tokens in 17 minutes, this shows that there's big interest on a proper exchange platform and I bet there would be even more if it were to be a sport betting exchange one.

The potential is there. What do you think?
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Euler
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You can't build a long-term viable business by ignoring regulators, licensing and other forms of compliance. Just wouldn't work.

But that said, I don't think the exchanges have been anywhere near as aggressive as they could have been. The betting industry hasn't really been that disrupted by exchanges.
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ShaunWhite
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vide0star wrote:
Tue Nov 13, 2018 11:03 pm
A "pure" exchange isn't possible, at least, not until the exchange market is an order of magnitude bigger...... but you've already seen those markets continue to get softer as we take the exchange retail flow away from them.
This where comparisons with the stock exchange break down. Financial exchanges are large partly because there's one per asset type per jurisdiction, and it's practices are controlled through legislation. They only provide services to brokers who in turn deal with the retail side. Sports exchanges spread themselves thinly by trading everything under the sun, to anyone who'll turn up and completing against each other in a free market free for all. There's not much similarity.

What's clear is that the idea of a sports exchange has never had mainstream appeal to retail customers or been appropriate for them, and the reasons are obvious and well documented. Even the mighty Befair had to conceed defeat and launch Sportsbook. Sports 'exchanges' should stick to what exchanges do best, that is providing specialist wholesale services for the businesses operating at the retail end. Just as the financial exchanges do that you want to emnulate.

The message seems to be though that if you want a big exchange, everyone should stick to one; and when the competitors have faded away, have the solidarity to apply the necessary pressure to the remaining one, via affirmative action, to maintain an equitable relationship.

This half-rice-half-chips plan to appeal to 'pros' and 'punters', backers and layers, vicars and tarts and all and sundry just seems to be a rehash of an old idea rather than a step change towards a brave new world.
Jukebox
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For clarity - Is the definition of a "market maker" someone who offers money to the market - or is it someone who offers money to the market but doesn't trade out?
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PDC
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Jukebox wrote:
Wed Nov 14, 2018 2:08 pm
For clarity - Is the definition of a "market maker" someone who offers money to the market - or is it someone who offers money to the market but doesn't trade out?
Depends who you ask, I think.

For example, assuming Euler's activity is in general the same as in his YouTube videos I wouldn't class him as a market maker.
Jukebox
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Thats why I asked.
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