Who do we bet against?

[andyfuller]

Another interesting topic to come up on Mark Davies blog is who is it we are actually betting against?

a) Are we betting against each other, for example if I lay Peter Webb's bet am I betting against him?

b) Or is it that we all bet against Betfair?

I can see an argument for both and used to be certain it was a) but now I think it is b) after reading Mark's blog since he started it.

What do others think?

Do we bet against each other or are we all betting against Betfair?

[rogerpalmtree]

Could you explain why using Betfair could be seen as betting against Betfair????

[Fidib665]

As much as I understood the user terms and conditions, it depends on the country you are located in:
If you are in UK, you are betting against each other
If you are outside UK, you are betting against BF who is then covering its bets in the market against other players. So in essence, also betting against other players, only with some British roundabout in between . The original text in the help section reads:

Who am I contracting with when I place a bet?

If you are a UK registered customer betting through the UK betting exchange, your betting contract(s) is made with other registered Betfair customer(s). Otherwise, including if you are a non-UK registered customer, or if you are placing a multiples bet, your betting contract is made with Betfair.


As an additional question, I would be interested in how big the players are, we are usually betting against. My hunch would be that the punters (ie, those that bet on one or more specific outcomes of the games) would typically have the smaller accounts, whereas the market makers who bet simultaneously bets and lays and live of the spread are the bigger ones. So a successful punter would in essence be taking money from the bigger marketmaker accounts. Does that make sense or is that too simplistic?

Cheers, Fidibus

[andyfuller]

Could you explain why using Betfair could be seen as betting against Betfair????

Betfair is just like other bookmakers, they accept bets. Most bookmakers however hold the risk themselves. Betfair on the other hand manage their book perfectly so that they do not hold any risk.

Betfair will only accept a bet if they can accept the exact opposite bet. They use technology in order to allow them to manage their position so that they are never exposed.

When we lay a bet we are not acting as a bookmaker, we are just placing a bet that says X will not happen.

It is for this reason along with others that we as individuals do not need to hold a bookmakers licence. Betfair hold the funds of each party and settle up, etc Betfair perform all the roles of a bookmaker.

So Betfair only accept a bet if they can accept the opposing bet at the same time. Just because I offer one of the bets and PW offers the other doesn't mean myself and PW are betting with each other, it means we are both betting with Betfair and Betfair are happy to accept both bets as they can use one to counter act the other.

Mark used this argument that we are betting with Betfair for legal reason with regards to the new legislation in France which basically says if I understand it correctly that in order to be allowed to operate in France you have to set your own price and be the person accepting bets. So Mark argues that Betfair can not be banned as they set their price and are the ones we bet against.

I therefore challenged him on the fact that their TV ads state that we bet Fan v Fan as that goes against what he is arguing. His reply was that there can be a difference between the way a product is marketed and the way it is regulated.

He used the example that Red Bull says it gives you wings when of course it doesn't.

I do not agree with his argument and believe you can not argue one thing when it suits but market it as another when it suits.

I still think that the adverts are misleading and don't think you can have your cake and eat it.

[enzabella2009]

on http://WWW.BETFAIR.IT ( ITALY), betfair is an ordinary bookmaker, they offer prices 5% lower then the exchange with one only option ( back). So IF they take £10 at 1.6 over ITALY and they back that £10 them self on the exchange they have no risks them self getting 5% guarantee on every bets. I am wrong?

[hgodden]

But if BF do seed the markets like betdaq have admitted to doing (i.e. setting up another company themselves to do it as they technically can't do it themselves and still be classed as an exchange) then a large amount of the time you will be betting against BF.

[danum]

As a betting exchange where market demand determines the price and both the buyer and seller are 'matched' then I disagree with Mark's claims that Betfair is acting as bookmaker.

The process is similar to the role that brokers play in a financial trade, the broker can act as a 'principal' whereby they are executing a trade on behalf of their own account i.e. taking on the liability themselves using their own money. I would 'expect' that Betfair holds client funds in a separate bank account to it's own funds, if so then this would support the argument that Betfair act as an 'agent' or 'go between' but not as a 'principal' or 'bookmaker'.

Just my twopenneth...

[Mug]

I think it's clear now that Betfair act more like a bookmaker than they do an exchange. The don't like winners and are actively doing things to discourage them.

[andyfuller]

As much as I understood the user terms and conditions, it depends on the country you are located in:

The original text in the help section reads:

Who am I contracting with when I place a bet?

If you are a UK registered customer betting through the UK betting exchange, your betting contract(s) is made with other registered Betfair customer(s). Otherwise, including if you are a non-UK registered customer, or if you are placing a multiples bet, your betting contract is made with Betfair.

I wasn't aware of that but have just looked it up. Therefore how can he argue that we are betting with Betfair (UK customers). We have no contract with Betfair, we have it with another punter(s).

As I said before you can't have it one way when it suits and another when it suits, it should be plane and simple. We either bet with Betfair or we bet with other customers.

[andyfuller]

But if BF do seed the markets like betdaq have admitted to doing (i.e. setting up another company themselves to do it as they technically can't do it themselves and still be classed as an exchange) then a large amount of the time you will be betting against BF.

Yes thats true but I think Betdaq have a different set of T&C's that states they are counterparty to every bet.

[andyfuller]

As a betting exchange where market demand determines the price and both the buyer and seller are 'matched' then I disagree with Mark's claims that Betfair is acting as bookmaker.

I agree with Mark that Betfair are acting as a bookmaker, if not who is acting as bookmaker? If it is the individual we should have a licence.

What I am questioning is who it is we are actually betting against. It should be clearly definable but it seems it is not, there seems to me to be different things pointing at different answers now.

[Mug]

Surely we want Betfair to act and speak like a bookmaker else you could question whether we are gambling and all the implications that brings if it deemed people are not gambling on betting exchanges? Maybe this is what Mark is trying to do, he is the spin doctor for Betfair I think?