Betfair High Rollers Service

[Exacta]

The biggest weakness of Betfair's model is that it shares the money its losing customers lose

That is a really interesting point. I hadnt thought of it like that, but its true really isnt it? Betfair share losers profit with us.

Put that to one side though and I think we all agree that we would like some more competition in the marketplace.

[Iron]

I'd be very surprised if it was bookmakers either. What bookmaker would want to dump losing money onto Betfair, when they'd make more money standing the bets themselves?

[...]

Isn't it going to be the same as Ladbrokes or Victor Chandlers high-roller service: mega-wealthy mugs who want £50k on a horse just for an interest?

Hi RinTaaramae

You may be right, but surely Betfair would then risk taking substantial bets that were arrived at by professional gamblers (or placed on their behalf).

I know Wayne Rooney lost a fortune on the horses, but I would say that most people with Wayne Rooney's wealth are higher up the evolutionary tree than him!

Traditionally, if a horse at evens won, the bookies would take a haircut. So it is not possible that the bookies will say to Betfair:

'We'll give you a value bet if you let us back this horse with you. If the horse wins, our losses are mitigated (particularly as laid the horse at lower than its true price on Betfair). Over 1,000 races, we both get a smoothly rising equity curve.'

Jeff

[hgodden]

I don't have a problem with what betfair are actually doing in acting as a bookmaker, frankly I would do the same, but if betfair was widely seen as more of an interactive bookmaker which takes on risk like any other and where you just happen to have the ability to set prices, rather than just as a brokerage service then the question of whether users of betfair can be classed as bookmakers would be far less likely to crop up. Who has ever heard of 'bookmakers within a bookmaker'?

[RinTaaramae]

You may be right, but surely Betfair would then risk taking substantial bets that were arrived at by professional gamblers (or placed on their behalf).

Of course, but that's the same for every bookie. That's why they restrict winners. You'd do some homework on the prospective customer then see how they bet. If they're betting cluelessly carry on, if they look like they've got info or they're smart money say "it's not working out the way we expected, thanks but no thanks".

I know Wayne Rooney lost a fortune on the horses, but I would say that most people with Wayne Rooney's wealth are higher up the evolutionary tree than him!

Most people probably are, so don't bet with them! Bet with the clueless. And just because someone's made money in business or whatever, doesn't mean they have the foggiest idea about betting. Ladbrokes famously made nearly £200 million in just 2008 from the mega-wealthy, mega-clueless, so they definitely exist.

Traditionally, if a horse at evens won, the bookies would take a haircut. So it is not possible that the bookies will say to Betfair:

'We'll give you a value bet if you let us back this horse with you. If the horse wins, our losses are mitigated (particularly as laid the horse at lower than its true price on Betfair). Over 1,000 races, we both get a smoothly rising equity curve.'

The big bookies tend not to care much about smoothing their returns. Why give away money to Betfair to smooth your daily returns when you only report every six months? And why would Betfair have a bigger appetite for risk than the bookies anyway? And going back to your first point, if a bookie is trying to get a bet on with you (rather than stand it themselves), then I would have thought the chances of it being pro money in disguise is much, much higher than if the person on the other end of the phone is a footballer.

[andyfuller]

It seems unlikely that the likes of Harry Findlay and Dave Nevison would place bets that would make Betfair a profit over time (or that Betfair would be stupid enough to accept their bets!). It therefore seems likely that Betfair is accepting bets from bookies wanting to minimise their liability. What do you think?

Who knows where these bets are coming from but I doubt they are from HF or DN, but not for the reasons you suggest.

HF is a net loser on horses by his own admission and from what I know about his punting (not a huge amount but I do know and hear a bit) he is unlikely to struggle to get on most of the time given the way he bets and I don't believe DN bets in huge stakes that he couldn't just feed through the exchange. How much do you think he gets paid to do a late night shift covering Kempton - if he were using the amounts that required him to use the High Rolling service I doubt he would do these shifts as he clearly doesn't enjoy it half the time - I would guess it is more to do with the financial requirements he had placed upon him that means he needs to bring in £x amount each week/month.