Smarkets begins closing successful accounts

[freddy]

If he's made 20k on Smarkets then it's safe to say he is a P.C player on Betfair.

so there is one very good reason .

I was just trying to ascertain whether Smarkets had rightly or wrongly assumed he was cherry picking all the best and out of line prices on the exchange in a fasted finger first kind of way .

[steven1976]

unless hes lost 21K on betfair!

[pdupre1961]

I was actually giving James19 the benefit of the doubt.

He lost 19K...

[freddy]

If he's arbing and he has won 20k on Smarkets and lost 19k on Betfair then he's clearly in the wrong business .

i don't think he was arbing between exchanges anyway, from what he has said he was just taking value prices.

which obviously still would hurt the market makers so i guess thats why he was banned.

[pdupre1961]

Not really, when arbing you usually end up with the profits at the place which is most out of line, or slowest movers...

With Bookies, that would be Stan James, BET365 etc. Obviously, with Exchanges it's Smarkets...

[Iron]

Given the efficiency of the markets, you'd expect the market makers to lose long-term against value betters and skilled traders. Therefore, like a high street bookie, the only people who the market makers will welcome is long-term losers. As the success of the exchange depends on the market makers, my guess is that Smarkets itself will usually ask successful users to leave sooner or later, particularly if they have a high turnover.

Smarkets - Do you dispute any of the above analysis?

Jeff

[freddy]

Not really, when arbing you usually end up with the profits at the place which is most out of line, or slowest movers...

With Bookies, that would be Stan James, BET365 etc. Obviously, with Exchanges it's Smarkets...

Which is what i meant by he's in the wrong business

If your finding that to be the case long term and all you profits have come from one place, then you don't really need to be a arber because you are clearly finding backing or laying value straight out,
Which is very different to just having fast fingers and exploiting price differences .

[george]

From my point of view as a trader arbing or not is not what matters here, the point here is that smarkets as a betting exchange banned him because he won 20k in few months and thats absolutely not fair !

For sure thats not the way to go forward .

[mugsgame]

Can somebody tell me what smarkets has to do with Bet Angel?
Apart form using our forum and it's readily accessible exchange using clients to promote their product that does not support Bet Angel?
????

[Iron]

I don't see the problem.

Lots of people are enjoying taking part in this discussion, and where is it written that everything posted in this forum has to relate specifically to trading with Bet Angel? Personally, I enjoy the wide variety of discussions we get in the forum...

Jeff

Can somebody tell me what smarkets has to do with Bet Angel?
Apart form using our forum and it's readily accessible exchange using clients to promote their product that does not support Bet Angel?
????

[LeTiss]

Can somebody tell me what smarkets has to do with Bet Angel?
Apart form using our forum and it's readily accessible exchange using clients to promote their product that does not support Bet Angel?
????

It's because we are constantly moaning about the lack of competition to BF, and we had high hopes for these guys.
They have tried to pitch their product to Peter, but nothing came of it. However, sometimes things change, so it's interesting to hear of things like this happening

[freddy]

What ever the reason for the closing of accounts,
it's been an absolute PR disaster for them, it's been mentioned on pretty much every forum i have read in the last few days .

What they should realise is there is really only one reason that people use smarkets and if that reason is taken away then

a real own goal on the handling of the situation.

[james19]

I had quite high hopes for them too. I suggest the best thing for them to do is go away and rethink their seeding model, so that market makers cannot complain to management when they lose, and so that all winners are welcome no matter what type of trading they engage in.

Also their current seeding model where the market makers block out and deter ordinary customers from putting in their own price requests is quite flawed.

One solution would be to increase the market maker's bid-ask spread by a few points, which would still guarantee liquidity and would also enable users to put in their order requests.

Management seem to think that they will eventually reach "critical mass" organically, and this will reduce their dependency on external market makers, but personally I don't see that happening any time in the next decade under the current model.

Also they shouldn't close accounts when clients say they are going to complain to the LGA.

[Iron]

I had quite high hopes for them too. I suggest the best thing for them to do is go away and rethink their seeding model,

I think the problem is that, without their current seeding model, they're screwed. Unless they have decent liquidity, few members of the public are going to use them. Therein lies the bind - it's a Catch 22.

IMHO, their best strategy is to market themselves to mug punters, and close down the accounts of consistently successful punters (much like a bookie does). That way, they could build up 'real liquidity', and possibly one day mount a serious challenge to the big boys. So whilst some people may feel that what they did to James was unethical, you could argue that it makes good sense from a business perspective.

Jeff

[freddy]

Personally i think that's completely the wrong approach for them Jeff.

If there one thing the world doesn't need it's another bookie and why would punters want to lose money with them rather than anyone else,
they have no real usp.

Betfair got very rich from the original exchange model just by charging 5% commission, what we need is someone who is looking to do the same.

I like Betdaq as it is a the moment, it's pretty fair for everyone.,
but im sure once Badbrokes take over things will change, so there is a void to fill if they get their act together in time.