Betfair to do fixed odds betting sportsbook

News, chat and debate about the Betfair betting exchange.
hgodden
Posts: 1759
Joined: Thu Apr 16, 2009 2:13 pm

The most interesting part for me is this, when talking about whether it is possible to compete with the exchange in normal markets

"Put simply, even if I tried I would not be able to run a competing operation on Betfair in the vast majority of markets. As the competition regularly finds, the prices would be inferior. So this will not sound the retreat for the Exchange, in fact, the product will highlight exactly how superior it is the vast majority of times."

As I've said 1000 times before, they need the liquidity that traders provide in order to offer the good prices and tight spreads on the exchange that people use betfair for. He's clealy admitting that they couldn't run the entire market on their own, so this idea that they will be 'closing' winning accounts (and thereby cutting their own PC revenues) and replacing them themselves is ridiculous. The USP of betfair is the better prices, so if they ever ditched the exchange and turned themselves into an inferior odds offering sportsbook just like the rest of them overnight they would lose most of their customers.
74.5
Posts: 102
Joined: Tue Feb 14, 2012 9:43 am

Good post Hgodden.

My take is this:

As betfair grew from its early beginnings,turnover increased as its popularity grew.Therefore,profits increased in line with their popularity.

Then,betfair hit a ceiling.There's only so many bets that can be matched on a race and so profits flattened.

betfair wanted to grow their profits so came up with PC. betfair calculated,quite rightly,that they would lose some customers but a trader needs liquidity and betfair provides that liquidity. So,betfair calculated,quite rightly,that the majority of traders would remain with betfair, PC or no PC.

betfair still want to grow profits - so now what?

Increase PC still further? If they do this,how many traders would leave betfair?There's only so much PC that a trader can take.Beyond that limit and it's off to big purple they go and it's gonna cost big blue plenty to get them back.

Oooo,I know,betfair offer fixed odds betting.That will increase turnover and profits.No?
74.5
hgodden
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Yes, I just think they're plugging a gap. Like they say on some events there isn't the liquidity which means punters will take their money elsewhere. If betfair can keep them for those less liquid events with this new bookmaker thing then they're hoping the punters will be less likely to use other bookies for the more liquid events as well. It's probably a common 'concern' for punters that they can't get on easily on many illiquid events on betfair, so helping to keep these people on betfair can surely only be a smart move, as long as they handle the risk properly.
74.5
Posts: 102
Joined: Tue Feb 14, 2012 9:43 am

Hgodden
Spot on.Looks to me like betfair are trying to become a one-stop betting shop.Whatever type of bet a punter wants to place,betfair have a facility to allow them place it.
74.5
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Euler
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Joined: Wed Nov 10, 2010 1:39 pm

I'm curious about the sportsbook. I'm not convinced that Betfair are playing to their strengths by chasing margin and also introducing a sportsbook. Their biggest USP has always been the exchange mechanism, so by offering a sports book and all this other garbage it seems a bit backward. IMHO would less risky and cheaper for them to fill the gaps by incentivising market partipants to fill those gaps.

As it is Betfiar is becoming a beast, trying to address all things. I bet you they learn it's not as simple as just coming up with the idea to address it. They tried and failed with their high roller business, so the sports book will be interesting. It's difficult to figure out what impact it will have without knowing how it will be implemented. I've asked Betfair lots about the sportsbook but I don't really have much to share as Betfair didn't have much to share beyond what is publically available.

If you remember Betfair SP was going to be a killer product that transformed the exchange and encourage people to bet early into the quiet markets. Which is exacly what the sportsbook is now supposed to be addressing?!!??!

The biggest problem is 'Joe Punter' doesn't want the hassle of dealing with complicated procedures and so on. He just wants to shove his tenner on something. That is where traditional bookmakers win at the moment and I don't see that really changing much, subject to what we expect to see.
steven1976
Posts: 1744
Joined: Tue Jan 19, 2010 6:28 am

"The biggest problem is 'Joe Punter' doesn't want the hassle of dealing with complicated procedures and so on. He just wants to shove his tenner on something. That is where traditional bookmakers win at the moment and I don't see that really changing much, subject to what we expect to see"

I agree.

Im presuming BF are only doing their sports book on the internet? Why don't they open physical shops? Surely that's where the real money is for the exchanges also?
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Euler
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They have missed a trick by alienating the commercial community. If they partnered people with routes to market then they could reach these customers. They wouldn't need to bear the cost they just need to team up with people who can reach 'joe punter'
steven1976
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Joined: Tue Jan 19, 2010 6:28 am

Im sure it will get there in the end (exchanges), whether its betfair, betdaq, a new player or traditional bookies there is obviously space in the market for exchanges. Im sure if people saw you can lay a horse at 1.2 on the high street to win 10 quid for a 2 quid bet they would be all over it.

Considering, BF 60% PC, do the traditional bookmakers now not have an opportunity in the exchange market to invite traders into their shops with zero commission but with their margin built into the book? Is this what you mean anyway peter about joining in a partnership with other routes?
Iron
Posts: 6793
Joined: Fri Dec 11, 2009 10:51 pm

Anyone noticed any changes in the Betfair markets since the sportsbook was introduced?

Jeff
andyfuller
Posts: 4619
Joined: Wed Mar 25, 2009 12:23 pm

Didn't realise it had been launched? Got the link to it Jeff?
Iron
Posts: 6793
Joined: Fri Dec 11, 2009 10:51 pm

Hi Andy

According to the article in the link below (previously posted in this thread), 'Multiples integrated into the betslip are the first wave of the project and were launched last week', but that's all I know.

http://views.betfair.com/2012/04/betfai ... ull-story/

Jeff
Groovyelms
Posts: 277
Joined: Fri May 20, 2011 7:42 am

steven1976 wrote:Im sure it will get there in the end (exchanges), whether its betfair, betdaq, a new player or traditional bookies there is obviously space in the market for exchanges. Im sure if people saw you can lay a horse at 1.2 on the high street to win 10 quid for a 2 quid bet they would be all over it.

Considering, BF 60% PC, do the traditional bookmakers now not have an opportunity in the exchange market to invite traders into their shops with zero commission but with their margin built into the book? Is this what you mean anyway peter about joining in a partnership with other routes?
Interesting thread and it will be interesting to see how it unfolds. The comment above in the first paragragh on laying, is obvious to us. BUT I don't think Joe punter will be able to get their heads round this. I have found that alot of very bright guys don't get this concept at the first attempt.... As PW said earlier betfair could have partnered the existing bookies setups and made plenty of money...
groovy :?
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Euler
Posts: 26353
Joined: Wed Nov 10, 2010 1:39 pm

Looks like they are going for a go live of early June according to industry sources.
PeterLe
Posts: 3724
Joined: Wed Apr 15, 2009 3:19 pm

Hi
here is the latest:-

http://www.telegraph.co.uk/finance/news ... bsite.html

I'm very interested to see how this works in practice.
Regards
Peter
DogBolter
Posts: 4
Joined: Tue May 26, 2009 8:18 pm

Having just spent £149.99 on Bet Angel Pro, I can only hope we don't loose P2P or have it mortally wounded. If Betfair want to take on the big boys WHill and B365 then they need to up their customer service game and improve the fixed odds as I can't see them managing this I wouldn't be too concerned about the P2P just yet.
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