Hi all
I saw in another thread named "so thin" about a swedish company called "Betting Promotion" who are a company.
Somewhere in the thread or on another site that i have read about them I see it says they bet 700million+ pounds a year on betting exchanges to make net profit of 500,000 pounds or "On a rolling yearly basis the company achieved a net turnover after trading fees of SEK 43.9 million leading to a gross margin of 0.53%".
Surely, such small returns seem quite low for professionals to be making. What would people be happy making on an investment of say 1000 pounds after 52 weeks? Surely, 5.30 pounds on a thousand pound investment wouldnt be worth it. Are the company simply reporting lower earnings to avoid taxes within their own country. Is 0.53% profit very low?
Betting Promotions profits from trading
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Nero Tulip
- Posts: 708
- Joined: Wed Apr 15, 2009 5:29 pm
That profit is very low, but these people were employed to provide liquidity weren't they ? Or do I remember incorrectly ?
Their terminology for turnover, trading fees and return are a little ambiguous. My interpretation is that their margin is 0.53%, if you turnover your £1000 investment many many times during those 52 weeks, the profit would add up. I might well be wrong however.
Their terminology for turnover, trading fees and return are a little ambiguous. My interpretation is that their margin is 0.53%, if you turnover your £1000 investment many many times during those 52 weeks, the profit would add up. I might well be wrong however.
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steven1976
- Posts: 1744
- Joined: Tue Jan 19, 2010 6:28 am
thanks for the great link.
Following BA comments on the above link
"I went to Betfair visited the 'my account' area and downloaded my 'bet history' for yesterday. I totalled up all the stakes in the J column on the spreadsheet. This totalled £236,000. I made £652 net yesterday so my return on turnover before commission was just short of 0.30%"
I presume then to make such a high turnover of bets in a day, it is the fact that scalping is a very popular tactic for the professionals? Would this explain why 43,000 bets for Betting Promotion are placed per day, as it would be the safest and surest option to ensure a profit with minimum exposure? .1 movement profit on each move in the market rather than waiting for a .5+ movement in odds for example?
Following BA comments on the above link
"I went to Betfair visited the 'my account' area and downloaded my 'bet history' for yesterday. I totalled up all the stakes in the J column on the spreadsheet. This totalled £236,000. I made £652 net yesterday so my return on turnover before commission was just short of 0.30%"
I presume then to make such a high turnover of bets in a day, it is the fact that scalping is a very popular tactic for the professionals? Would this explain why 43,000 bets for Betting Promotion are placed per day, as it would be the safest and surest option to ensure a profit with minimum exposure? .1 movement profit on each move in the market rather than waiting for a .5+ movement in odds for example?
SEK 43.9 Million = £4.09 Million, so I don't know where you got £500,000 from?
This is the profit they made from their trading / market making activities. Of course they have costs related to infrastructure, wages etc.
In 2009 Betting Promotion made and operating profit of SEK 18.9 Million = £1.76 Million on which they then had to pay the relevant taxes.
Betting promotion has a combined total of SEK 74.3 Million in cash deposited with the betting exchanges.
Does anyone know of any other companies or individuals operating at such a large scale?
This is the profit they made from their trading / market making activities. Of course they have costs related to infrastructure, wages etc.
In 2009 Betting Promotion made and operating profit of SEK 18.9 Million = £1.76 Million on which they then had to pay the relevant taxes.
Betting promotion has a combined total of SEK 74.3 Million in cash deposited with the betting exchanges.
Does anyone know of any other companies or individuals operating at such a large scale?
Remember that's we're talking about 0.53% profit on turnover, not a 0.53% increase in your bank year-on-year!
They will be recycling much of that money week after week.
Jeff
They will be recycling much of that money week after week.
Jeff
steven1976 wrote:Hi all
I saw in another thread named "so thin" about a swedish company called "Betting Promotion" who are a company.
Somewhere in the thread or on another site that i have read about them I see it says they bet 700million+ pounds a year on betting exchanges to make net profit of 500,000 pounds or "On a rolling yearly basis the company achieved a net turnover after trading fees of SEK 43.9 million leading to a gross margin of 0.53%".
Surely, such small returns seem quite low for professionals to be making. What would people be happy making on an investment of say 1000 pounds after 52 weeks? Surely, 5.30 pounds on a thousand pound investment wouldnt be worth it. Are the company simply reporting lower earnings to avoid taxes within their own country. Is 0.53% profit very low?
Steven,
From what I've read, a ROI of 0.5-1% is typical for the trading professional. The trading professional keeps recycling their bank on short-priced runners to generate high turn-over.
A ROI of 15%-20% is typical for the traditional (back/lay) punter professional. But the punting professional has to be much more selective, since very few runners have any absolute good value.
So you have two quite different sets of successful professionals - the trader professional bets huge amounts at very low rates of risk/reward, the punter professional bets much smaller amounts, but at much higher risk/reward.
From what I've read, a ROI of 0.5-1% is typical for the trading professional. The trading professional keeps recycling their bank on short-priced runners to generate high turn-over.
A ROI of 15%-20% is typical for the traditional (back/lay) punter professional. But the punting professional has to be much more selective, since very few runners have any absolute good value.
So you have two quite different sets of successful professionals - the trader professional bets huge amounts at very low rates of risk/reward, the punter professional bets much smaller amounts, but at much higher risk/reward.
Update from these guys
The World Cup has been the focus of the period and generated extra interest for the market as a whole. The turnover deriving from the World Cup during Q2, amounted to approximately SEK 511.1 million with a margin of approximately 1,06%. The largest game in terms of turnover was England - Algeria with a total turnov er of SEK 16.4 million. The worst result was in the match Portugal – North Korea with a loss of SEK 558 thousand and the best result was achieved in the match Italy – New Zealand with a profit of SEK 764 thousand.
During Q2 Betting Promotion paid SEK 4.2 million (3.4) as fees to betting exchanges. These fees are reflected in the gross margin and are itemized in the income statement.
The World Cup has been the focus of the period and generated extra interest for the market as a whole. The turnover deriving from the World Cup during Q2, amounted to approximately SEK 511.1 million with a margin of approximately 1,06%. The largest game in terms of turnover was England - Algeria with a total turnov er of SEK 16.4 million. The worst result was in the match Portugal – North Korea with a loss of SEK 558 thousand and the best result was achieved in the match Italy – New Zealand with a profit of SEK 764 thousand.
During Q2 Betting Promotion paid SEK 4.2 million (3.4) as fees to betting exchanges. These fees are reflected in the gross margin and are itemized in the income statement.
Interesting that they take part in 'in play' market making in football, I suppose because they spread themselves across so many games it would smooth out the volitility, it was mentioned earlier that they were getting back into pre-race horse racing, it would be intersting to see what kind of size they would do pre-race.
I think that racing is something that they've just been experimenting with (unsuccessfully until now.) Their turnover on 'other' sports which would include horse racing in Q3 is down to 210 million SEK from 324 million (which works out a lot less in pounds by the way!) so it wouldn't indicate they've made any headway in racing.harvard16 wrote:Interesting that they take part in 'in play' market making in football, I suppose because they spread themselves across so many games it would smooth out the volitility, it was mentioned earlier that they were getting back into pre-race horse racing, it would be intersting to see what kind of size they would do pre-race.