Betfair pre-off Volume

On the Bet Angel forum .. which is excellent, there is a thread about how Betfair volume on the exchange, has decreased significantly :

Since 2012 pre off turnover has fallen from £19.5bn to £16.9bn

Comparisons on individual sports, top ten sports by turnover (pre off) : -

Horse Racing -4% - £10.31bn vs. £9.88bn 
Soccer -27% - £5.73bn vs. £4.16bn 
Tennis -31% - £1.36bn vs. £0.94bn 
Greyhound Racing -10% - £0.72bn vs. £0.65bn 
Cricket +57% - £0.37bn vs. £0.58bn 
Basketball -48% - £0.22bn vs. £0.11bn 
American Football -2% - £0.1bn vs. £0.09bn 
Golf -14% - £0.09bn vs. £0.08bn 
Australian Rules -39% - £0.07bn vs. £0.04bn

Its interesting. that cricket is the only sport, to have increased, and increased significantly - thou, the actual volume number, is quite low, in relation to other sports.

I have no idea why the Betfair share price nudges £40 .. to me, its a fucking mystery.

Maybe, becos in-play volumes have risen, at least, for some sports.

Soccer -13% - £13.73bn vs. £11.98bn 
Tennis -7% - £9.94bn vs. £9.24bn 
Cricket 73% - £5.17bn vs. £8.95bn 
Horse Racing -5% - £2.63bn vs. £2.49bn 
Basketball -16% - £0.7bn vs. £0.59bn 
Golf -1% - £0.25bn vs. £0.25bn 
Darts -11% - £0.17bn vs. £0.15bn 
Snooker -25% - £0.17bn vs. £0.13bn 
American Football -8% - £0.15bn vs. £0.14bn

Betfair in the US

The Daily Racing Form .. an online horse-racing portal in the US, which has a large following, has just posted this :

http://www.drf.com/news/betfair-gains-first-exchange-wagering-license-us

This is a very interesting development, which has taken a great deal of time to have come about.

Its debatable, whether the various lobbyists will allow it to see light of day, but, it shows that the investment Betfair have continued to pour into the US, might finally have something to show for it.

I would take the under, on Betfair opening in March .. i.e., I dont think its likely, but, would like to be pleasantly surprised.

One to keep an eye on.

They dont want u to win ...

Its a problem.

If u are good at gambling, it seems, just about everywhere u want to ply your trade, has discovered bean-counters, who have obviously dissected each business revenue source, and recommended changes, to make more revenue/profit.

We have long known Betfair have Premium Charge, which some days, I can understand, as the markets are 'wrong', and u should be charged a premium for access to the idiots.

Casinos discourage Advantage Players, be they card counters, or player point whores.

Now, Poker Stars, have radically changed the elite poker rake-back system .. Super Nova Elite.

Poker has become far harder to beat online, and many pro players, now, are basically flat on the game, but, make money, getting rake-back, from the many thousands of hands they play each month.

(This can be real money .. they previously changed terms of play, from 12 tables max, to 24 tables max SIMULTANEOUS play, and used to offer bonuses of about $100k a yr, if u played for 12 hrs a day)

This will change from next yr (which is v controversial, as, to get to a certain rake-back status, u have to invest many hundreds of hours play, and cutting it off, with less than 3 mths notice, is seen by some, as breaking a contract).

Poker Stars say, they are changing the poker landscape, to make it easier for the recreational player .. and thus harder, for the professional, who they are trying to discourage. I can understand their logic .. player acquisition/player retention are key buzzwords, and certainly, public companies, owe their shareholders more than they do to professional gamblers .. but, u do need a base, for people to play with/against.

If companies like Betfair/poker Stars make it too hard for market makers/pro players, overall liquidity has to fall .. their has to be a balance.

Amaya, the holding company of Poker Stars, dropped 33% in the last few days ..

Ladbrokes Exchange

I am led to believe, this will be ready for launch, within a couple of weeks.

I am noticing a lot of preparation work, by Betdaq/Ladbrokes people, both on social media platforms, and internally, by people who have obviously thought things thru, pretty well.

It may be, initial seeding/offers, will just be a buffet for the professionals, but, I have always felt, Betfair would face a serious challenge, if anyone stepped up, and, am quietly hopeful.

Whether the platforms, can handle the extra traffic/be profitable, is debatable, but, just like, I think its possible, Microsoft could be gone in 10 yrs, I have always felt the same about Betfair.

Ladbrokes Exchange

In the last few days, Ladbrokes have started to announce the presence of the re-branding of the Betdaq exchange.

A twiiter account :  @Ladexchange has been created, and they appear to actively creating interest.

An advert, on youtube

http://www.youtube.com/watch?v=rC5S_bB1NVc


A tab, on the beta website, for the exchange

http://sportsbeta.ladbrokes.com/


Various social media commentators, have had their digs, about the 'about face' - from once upon a time, saying exchanges encourage corruption :

http://www.e-comlaw.com/world-sports-law-report/article_template.asp?Contents=Yes&from=wslr&ID=580


and its fair comment .. but, that was with different management, in a different era.

I for one, am glad to see competition, and see no reason, why .. if Ladbrokes try, Betfair hasn't gotten a real competitor.

Pricing/treatment of winners/liquidity etc, are all questions, to be asked down the road, but, at least now, its a road, that we can see.

Betfair Pricing

Following the (declined) bid, from CVC there was an exceptional comment, on the markxdavies bog.

I reproduce it here : (From Graffiti : ) link is : http://www.markxdavies.com/2013/05/14/for-sale-bidders-welcome/#comments

Betfair’s problem is a very simple one. Have they ever put enough thought into their pricing?

Market liquidity operates along an S-curve / sigmoid function. Initially it is hard work (the first early players can’t get matched at a fair market-clearing price, or bets they leave up are unmatched). Once a market reaches a critical mass, then the conflicting opinions kick in, and the betting turnover starts increasing at a much faster incremental rate, with only a proportionately smaller increase in the number of players.

Betfair need to address the S-curve with their pricing. It just isn’t good enough to have the same pricing policy for a major liquid market, as it is for a side market where there is a danger of liquidity drying up.

If a layer operates in a big main market, they pay normal charges. But someone putting liquidity up into a side market adds a much greater value to Betfair’s diversity of markets/betting events. There has to be the introduction of a financial incentive for people, especially key big layers, to make it cheaper to operate in a market which will be in essence a lot less profitable for them (their bets won’t get matched as easily/often, they will have to give away value to get anything matched).

Betfair’s pricing is almost exclusively based on profit/loss, whereas it needs to be changed to reflect liquidity, especially urgently needing to focus on favouring people who leave bets up in illiquid markets. The time and effort people put into side markets makes them proportionately much harder work and more hassle. This must be reflected by Betfair in its pricing, and is why Betfair’s current pricing is, well, a bit meh.

Betfair needs at the extreme, where a market has dropped below critical mass, to not just offer zero commission to big layers, but if the little fish come and nibble away, paying 5% commission on their side of the bets, why not give maybe even half of the commission to the layer. You would then in effect have NEGATIVE commission on bets in these markets to the layer, whilst a boost in turnover overall, with Betfair getting half of the commission, is better than getting none at all, surely?  .

A market maker would suddenly find that markets which were much more costly to them to price up (not just in pecuniary terms, but in time terms too) would suddenly be back in play and worthwhile participating in.

You then reduce these discounts/incentives once sizeable liquidity has been reached.

There is something intrinsically valuable to Betfair in having as many markets being offered, with as deep liquidity as possible. Ever thinner and narrower side markets drive people away. The reason side markets have shrivelled is solely because of a faulty mix of pricing/incentives to people to get involved in them.

There is also huge room for a new type of market-making. The “crack trading team” is a throwback to the stone age of bookmaking, and an embarrassment for Betfair. What is obvious, is the crack team often don’t understand pricing in the internet era. The crack trading team needs to be disbanded, it is a waste of time and money. Betfair haven’t spotted what to replace them with. I remember Betfair buying a small company/startup which analysed betting patterns (to stop linked accounts, through intelligent analysis of them..?). That is where the future of pricing is, that is where Betfair will find the answer to their liquidity problems.

A large part of me thinks the Betfair sportsbook and exchange separation is a huge mistake. Ebay made a strategic decision to show less information/clutter to new users, to keep it initially simple, but more frequent users were allowed a much more full set of information. I think the exchange and sportsbook should be merged, where someone who logs on in the UK (to keep things simple), they will see say 5/6, and take 5/6 on a bet, but behind the scenes you could actually give them 1.95 or whatever the current higher price available is on the exchange. That would keep things simple for Joe Public, but bearing in mind Yu and Morana’s epithet when they spoke together on record saying they could see that people kept coming back and playing more when they got a better run for their money (hence why Yu was in favour of the Betfair education/statistical database tools etc), this would combine great value, with simplicity. I suspect the crack trading team don’t care how profitable Betfair is, they probably care how much money is diverted onto their poor prices (often with knockback size).

Betfair should be a £5billion+ company. It should be the biggest and best bookmaker of all. I don’t even think that gambling bets should be the flagship profit for the Betfair exchange to match, but that is by the by. It would be great to see Betfair in 2015 aspiring not to be Paddy Power 2013 “Lite”, but to be Betfair 2013 “heavy”, if you see what I mean.

Graffiti understands exchanges, and acknowledges how 'used' Market Makers feel, and their general dissatisfaction, with the current pricing regime.

Why cant betfair management, see the same issues ?

More ramblings

Got up fairly early, to play some golf.

Noticed, (one of many Betfair RNS announcements), recently :

This one, is a directorate change :

http://otp.investis.com/clients/uk/betfair/rns/regulatory-story.aspx?cid=270&newsid=336710

Part of the announcement, says :
Commenting on his own appointment, Peter Jackson said: "Betfair is a unique brand at one of the most exciting stages in its history. I am looking forward to contributing to its continued development."

Excuse me, but, exciting stages in its history ?? .. which company, can be said to be exciting, when its going thru take-over issues, becos its management are percieved, to be doing the wrong things .. hence the take-over ? 

Challenging would have been a better adjective, but, I wish him well.


Finally got to the golf course, and .. maybe I am getting morbid with old age, but, faced this, near the 1st Tee  :

I am not sure I have ever seen a golf memorial .. on the course before, and didnt find anyone who knew the history .. but, it was thought provoking. 

I didnt play that great, but, wouldnt blame the above ..

Over the course of the season, I expect to eat a lot of fast-food, at various prices.

Price, varies enormously .. 

Top of the range, will be the £9.20 burger at Ascot .. no, its not worth it.

Value winner, so far, is the £1 hot-dog (2 sausages), offered at a reduced price, (down from £3.20), after race 6, on a 7 race card, in the silver ring, at Stratford racecourse.

Betfair Stuff ,,

BF apparently tuned down a bid, of £8.80 a share, valuing it at £900m .. (it listed at £13)

Maybe, ongoing discussions will increase price.

This is a post, from the Betfair forum, re Betfair revenues : (frog2)

The Premium Charge is a legacy of Betfair's former management team and hopefully the new CEO has an open mind to it.

Following the 1st charge UK pre-play racing volume, which has been growing nicely, started to fall. This is a key market in terms of real commission. Even now racing makes up over 40% of exchange revenues.

Following the 2nd premium charge both revenues and amounts matched on everything bar in play sports (where millions are traded for very little revenue) have gone from growing year on year to flat lining. At the same time group revenue growth has stopped. This is after growth in the sportsbook and mobile channels.

Its not difficult to see why this is happening. Betfair has a monopoly in some markets. Where people have to use them e.g. to trade on a test match cricket or a tennis match inplay they over no other option. They either play here or stop totally. Where people can go elsewhere e.g. pre-race horses or football they will go elsewhere. The charge is simply too high.

The problem is where Betfair has a monopoly it is making a low margin (trading) and where it does not (when people want an actual bet) BF makes a higher margin. Betfair is losing its higher margin business.

An outright punter winning just over 2.5% on stakes will pay the 40% premium charge if he stakes enough. This is a very marginal system yet he still falls into the threshold.

Even if Betfair acted now they have lost so much good will. I used to do 100% of my betting on here. I have never even paid the charge but slowly I am moving my betting elsewhere. I need to keep my generate commission rate high so I avoid high margin bets on here. I use it for lower margin bets and trading that I could not do elsewhere.

I hope Betfair see sense. In 2008 the exchange was not broken. It was still growing both in revenues and amounts matched across all markets. They refused to settle for this growth and are now paying the price and must scrap the charge before its too late and the decline becomes terminal. Otherwise they will just be left with a second rate sportsbook and casino.

average daily matched all horseracing and non inplay sports year to date    
    
Apr-07    £33,345,799
Apr-08    £45,879,142
Apr-09    £51,573,807 (1st PC 11/08)
Apr-10    £55,740,339
Apr-11    £61,204,673 
Apr-12    £60,555,818 (2nd PC 06/11)
Oct-12    £61,014,819*

average daily group revenue year to date

Apr-03    £87,671
Apr-04    £186,301
Apr-05    £293,151
Apr-06    £400,000
Apr-07    £509,589
Apr-08    £668,493
Apr-09    £824,658  (1st PC 11/08)
Apr-10    £934,247
Apr-11    £1,076,712
Apr-12    £1,065,753  (2nd PC 06/11)
Oct-12    £1,090,217*

*averages half year

////////////////////////////

Revenue is basically flat, which, can easily be associated with a number of factors, including recession/PC/loss of markets in restricted counties.

Betfair is now, simply, a mid-tier betting company, drifting .. maybe they are happy.

Betfair puzzles ..

The overall quality of blog posts, re gambling, has been steadily improving, and 2 of real quality, deserve special mention :

Mark Davies .. former Media Man at Betfair .. at a time, when 'getting the message out/across', was not easy, has always had his finger on the pulse, and his 2 articles re the CVC bid, need referencing :

http://www.markxdavies.com/2013/04/20/thoughts-on-the-betfair-bid/

http://www.markxdavies.com/2013/04/20/fantasy-betfair/

This is a 2 part summary, of lots of things, and anyone with a related interest in exchange gambling, should read them.


This other item, writes about the industry, from a compilers perspective :

http://gemsandrhinestones.com/2013/04/10/dispelling-some-myths/

Also, well worth a read.

Puzzles ..

I like doing puzzles, and have run the full gamut of different types :

From the very basic, 1983 Ascii type game, of Enchanter ..

Which, as u can see, is a very old game .. but was fun ..

To : 7th Guest , which, in its day, was the dogs ..

The spooky staircase, in the puzzle laden house.








To, Apple IOS games, like The Room :

These puzzles have an ending.

The puzzle, that is Betfair, never seems to :

Its a long story, but, founders/shareholders/users/employees .. all have different paths to follow, and many, just seem dead-ends, like many of the puzzles, above.

The latest chapters, have seen rumours of Ladbrokes making a bid (why??), and a private investment vehicle - CVC - apparently thinking about making a bid, to turn Betfair private :

http://www.guardian.co.uk/business/nils-pratley-on-finance/2013/apr/15/cvc-unlikely-offer-betfair-enough

This makes no sense to me .. but, many things in the financial world, are far more wacky .. however, I do think, this is a puzzle, that will run and run ..

Laddaq - waiting for the changes

2 weeks ago, Ladbrokes finally acquired the Betdaq exchange, for a decent sum, and I was hoping for change.

http://megarainuk.blogspot.com/2013/01/exchange-stuff.html

I havent had a job for a long time, so, may have forgotten how ridiculously slow, big companies now operate, but .. If anything has really happened (on Betdaq), I have missed it.

Liquidity, if anything, has fallen .. At least on the mkts I have watched.

Maybe they are busy setting up meetings, with counterparts etc .. And the techies are in meetings, wondering how to get the 2 companies systems to talk to each other .. Users don't know .. They tell u nothing, but expect you to waste your time, looking at markets, which are just a copy of Betfair, less 9%.

Maybe my expectations were too high .. Maybe 2 months is a more realistic time-frame .. I really hope something has happened by then.

Just for the record, Ladbrokes share price, on Jan 21 2013 - 211.66

Ladbrokes share price Feb 7 2013 - 218.34

Betfair share price, Jan 21 2013 - 664.7

Betfair share price, Feb 7 2013 - 680.6

Posted with Blogsy

Exchange stuff

So, finally, after many years of speculation, Ladbrokes have acquired Betdaq, for Euro 30M, roughly £25m.
The rationale behind the move, is stated, as being :

( I have just tried to copy / paste from an IPad .. Article, as as usual, the piece of crap that is Apple, doesn't work. I see their shares are tanking .. I hope they go bust, they are an arrogant company, who doesn't give a shit about customer service.)

So, I will have to do it manually.

Combines Ladbrokes global brand, with a scale able betting exchange. (Liquidity can hardly get much worse).
Accelerates Ladrbokes strategy to grow digital revenues.
Enables Ladbrokes to address the full spectrum of the broader sports betting market.
Further enhances Ladbrokes liability management, with more flexible and lower cost hedging. ( This is an important point. Hopefully, they will now route hedging thru the exchange, improving liquidity. I believe they had to pay Betfair, to read the data, on the site .. By, improving liquidity n Betdaq, Ladbrokes will no longer, need to review other sites as intensively )

It will be interesting to see how Ladbrokes integrate the exchange, with their High Street presence, and websites. It's possible, it could be a very useful dimension, which may give something for Betfair to think about.
Of course, it's also possible, they use the exchange to get information, of successful punters, and may limit shrewdies .. We shall see.


Crossing the wires, late in the day, was an announcement that Andrew Black (Co-founder of Betfair), has decreased his holdings from 8.87% to 7.58%.

This seems odd, as the current CEO, Breon Corcoran, and Alexander Gersh, both spent £300k, buying shares last month, at about £6.58.

Current Betfair Share price is £6.70 .. far, far away from the listing days, when £15 seemed achievable.

I wonder what he must be thinking now .. and what Betfairs response, if any, will be, to the changing landscape.

I cannot help but feel, it was a great opportunity missed.

Posted with Blogsy

Industry roundup

A very good blog, www.sportismadeforbetting.com, by Scott Ferguson, has a great write-up on the state of the industry :

http://www.sportismadeforbetting.com/2012/12/the-regular-industry-roundup.html

Makes some v good points about 2 favorite topics of mine, US gaming legislation, and Betfair trading outlooks.

Well worth a look.

(Betfair share price, down to £7.22, from £7.70, when half-yr tradng results came out, a week ago).

Betfair - Interim results to 31 Oct 2012

http://corporate.betfair.com/~/media/Files/B/Betfair-V2/press-releases/2012/13-12-2012.pdf

In my view, results are a little disappointing. Major decision, is to dump the piece of junk that was LMAX, selling their share, for £2.4m.

Losses from this venture, are anywhere between £25-£35 million - what were they thinking ?

Its clear Betfair need market penetration in overseas markets, and regularatory issues, make it hard.

Betfair has reserves, but recognises it needs to slim down, and become more market/customer focussed.

I am selling 2/3rd of my Betfair shares --  I dont see how they can move, in the next yr or so, without new markets opening up.

///////////////////////

Overnight, have re-thought this, and dont like some USA contracts, being given to Sportech. Have sold ALL my Betfair shares.

Betfair share price, went as high as £7.70 or so, yesterday, but have fallen back today .. £7.48, pleased I got out.