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TDK……..I see your point,however, surely theirs value to be found in 100% books has opposed to best odds books of 115%.
Whilst prices will certainly level out has the sheep follow each other,one needs to consider market movement isn`t always the best guide,nowdays we are seeing many more drifters and value can surely be found in them!!
the darkknight,<br>I normally take a view with horseracing either just back or lay but with something like the current Wimbledon Tennis matches there have been plenty of arb positions and ample chances to trade. On the current Henman match R.Post report there is currently £4.6 million been traded and whilst a lot would be trading in and out if you were clever enough there was a 62% book.
It is a difficult call James but I suppose you and I have the same opportunity as the arbers if we want to follow that route – apparently no-one ever went skint taking a profit either.
Obviously I would be at an advantage over you as you can’t take advantage of Coral’s huge acts of charity!
I agree with tdk.
I have recently found myself, rather than trying to study form, simply looking at ante post races with the intention of trying to fathom out the horses that I think will run and those that wont.<br>Then trading accordingly, i.e backing at longer odds and then laying when say the favourite is pulled out.
While I have had a fair bit of success with this, most profitably with YoulNeverWalkAlone in the national, this isn’t the reason I fell in love with the sport when I was a teenager.
Can’t see how it will change though.
Lee
<br>James,
I’d always associated the people that run Ladbrokes with having three figure IQ’s.
They must easily be able to identify the punters that are using this approach, so why don’t they restrict their stakes, just like they do with any other successful punter.
If an arber is being offered £5 at the price and the rest at SP, his game is ended and Ladbrokes can hold the price and lay it to their regular customers. (I use the term ‘regular customers’ in it’s bookmaking sense, where of course it really means ‘regular losers’)
AP
Great thread
With regard to the bots I am more than happy to play against them as they can be ‘tricked’ in certain situations. Bots are only programs afterall and just about all programs have bugs. Find the bugs and take advantage is the best way of dealing with the situation IMO.
By the way although I am a punter at heart I am incredibly selective as I hate losing and am only interested in high p.o.t. bets, therefore I only bet about 2 or 3 times a week on average. I believe that the best way to play the game when backing is to either have ‘no bet’ or a ‘big bet’ with nothing in between. The rest of the time I trade the horseracing markets to keep things ticking over. I agree that trading is boring but I am perfectly happy to be ‘all green’ before a race starts. As CuBoNe says frequently to traders / arbers on the Betfair forum …….. ‘you will never starve’ :)
<br>James,
No argument here about the extent or rate of change. There are days when I feel very old indeed.
I was never sure what ‘professional punter’ meant anyway. Perhaps I should stick to the job title on my car insurance – ‘Market Analyst’.
I just didn’t tell them I meant the betting market rather than the stock market.
I’m left wondering who’s losing this money the arbers are winning. Given that Betfair are taking their cut as well, there must be a lot more losers on the exchanges than ever appear on Fantasy Island (aka the BF forum)
Like you, I woud find spending my life stuck in front of a PC pinching a tenth of a point here and a tenth there soul destroying. Then again, maybe I’d view that differently if I had a mortgage, a wife and kids and a couple of credit cards.
Like the opportunities I founnd with spread betting a few years ago, which are now long gone, I suspect the the funding from losing punters will dry up over time.
AP
Paul – you reading the same posts as me because I don’t see apracing stating his opinion as fact – simply having firm opinions which are articulated strongly. I’d be more interested in your opinions on the issues rather than your critique of other people’s failings.
Good thread this. The ‘market’ is in a state of flux at the moment and while this continues there will continue to be lots of profit-making opportunities around. However, as apracing points out, those ‘holes’ currently being exploited will gradually minimise, as with the spread betting opportunities, and the market will flatten out. Once this happens the hunt for ‘value’ or ‘profit’ will once again be inextricably linked to relentless study of the formbook etc.<br>Meanwhile, make hay while the sun shines.
I’m unemployed on my car insurance and proud of it. Afterall I win money, I don’t earn it. ;)
Fantastic thread guys, thanks for kicking it off James.
I am with James/tdk on this.  That said, I am not sure how to solve the problem or whether ground has shifted (and therefore isn’t solvable).
Of course its not just exchanges at play here, its also things like betbrain, oddschecker etc. that freely accessable to the punter so he can always take the standout price.
The thing that I fear is when the age of the arb/trader is ‘over’ – that we will (as more and more punters take advantage of the technology to always get the best price) end up with market failure.
Bookmakers play an important role (in wagering) because they hold risk (obviously with the intent of winning over the long term, but there would be very few bookmakers that managed to bet round race by race) – as a result they lay the favourites (and other runners) at odds shorter than the believe are the true odds (so as to win in the long run). ÂÂÂ
But, and its not just exchanges, the pressure to offer better and better prices to attract (any) money means that they are operating to finer and finer margins.
In betting exchanges, the ‘trader’ is just ‘gelded bookmaker’ (or even punter) he has no desire to still be exposed (or to stick with the venacular, to have any open positions) at the jump. ÂÂÂ
It should be noted that is is one reason why exchange ‘in-run’ bets can offer good value (to the punter, or bookmaker, with balls) as the ‘trader’ just wants to close out open positions (rather than have a binary win/lose on the result).
One last point, mug punters using betfair/exchanges still lose their money because they are price takers – the ‘traders’ are making their cut by being the glue/catelyst in the exchange – and the professional (or displined user) is making money (from backing or laying) – and the exchange is making its commission (perversly not from the winners but the losers) – the bottom line, everyone is after a share of the loser’s losses.
rouge homme
(Edited by redman at 1:43 pm on July 4, 2003)
Redman<br>I think you will find that the winner pays the commission, not the loser. The loser loses whatever his risk is.
<br>Paul,
Get a sense of humour please – regular customers/regular losers is a gag line.
Perhaps if I spiced it up with laughing faces and ‘ha-ha’ you’d be able to spot that?
Just out of interest, if you don’t like me offering my opinions, whose opinions would you prefer me to offer?
AP<br>
Dungheap
yes the ‘winner’ on each event pays commission (on their net winnings) but big players pay low, if not negligible, commission rates.  The bearer of most commission payments is, over time, the ‘loser’.
The is even more obvious when the past (under a turnover environment) is compared to the present.
Mathematically the whole thing that drives wagering is "losers’ losses".
rouge homme
sorry to add an edit in… but
what seems to be lost on some is that it is one thing for a winner’s winnings to be less (as a result of commissions ‘paid’ out of winnings) – however the winner is still a winner – the person who has ultimately paid is the long run loser.
RH
(Edited by redman at 12:40 am on July 5, 2003)
paulbraidley
your personal abuse of Ian does you little credit in this thread, as it is, dare I say, a reasonable intellectual debate about a, potentially, seismic shift in wagering.
play the ball not the man
rouge homme
PB – the Post-Race analysis takes place on this forum after a race.  The Pre-Race analysis takes place before a race.  I hope this clears this up for you, but maybe have a look at the Eclipse thread if you’re still struggling with the concept.  BTW, stop acting like a child.
Re Arbs (though probably not a subject as close to your hearts), something similar happened to the spread betting markets.  Arb punters poaching any discrepancies push spread firms into line, meaning there is less choice and value for a genuine punter with a view.
However, as the concept equates to buying money I’m afraid I can’t criticise anyone who does this.  If it’s any consolation, most of the serious arb players I know use this ‘safe’ money to sustain their genuine bets in case of a losing run.
My head’s still on page 1 of this thread.  It keeps thinking about James’s mate who turns over 20 Million to make 100K.<br>  <br>I think I may have sat next to this bloke at a corporate lunch a while ago – he was certainly fascinating. ÂÂÂ
If it is the same bloke, he was as much a trader as an arber, and did most of his arbing/trading in the football markets. If it wasn’t the same bloke, god know how many outfits are out there playing to such sums.
The sponsors, (sportingoptions) of course were falling over themselves to be nice to him.  Which had nothing to do with commission because as redman has pointed out  he hardly pays any at all.  It was all to do with the liquidity he brought with him. ÂÂÂ
I had a few thoughts at the time.  I wonder if our resident exchange expert, or others, can shed any light.
1.  Just how much money in the exchange markets is trading money versus old fashioned betting?  Betfair’s ‘millions matched in x market’ looks a bit silly if 90% of it is people trading. ÂÂÂ
2. Wouldn’t it make sense for the smaller exchanges to go beyond 0% commission and actually pay some of these ‘market makers’ to induce them to play in certain markets? In fact, does this happen already?  (If it does, then I can see a case for taxing them!)
<br>PS – I’m sure I’m not the only one, just the only one to admit it, but trading/arbing is actually a good deal more complicated in practice than it sounds.  Quite apart from a couple of horror mistakes, my personal experiences do indeed mirror my ham-fisted plays on spread markets in the early days – ie
a) going for the arb, and missing one side of the trade by being too late.
b) messing up by trading-out on events, when I would have been much much better off keeping my original position. ÂÂÂ
c)  messing up by over-trading a market.
d)  mixing up trading and betting within the same market.  <br>   <br>Personally, I’ve decided to leave it to the big guys, and carry on picking up the scraps that fall from the table!
(Edited by tooting at 6:53 pm on July 4, 2003)
tooting,
to answer your questions as best I can:
1. unknown – but "a lot" would be close
Though that said, Betfair already understates "turnover" by the falacious "matched bets" – so our "trader"  has come along and "layed" 100/400 (4/1 matched bets=200, ‘true turnover 500) later backs it 409.5/91 (9/2 matched bets=182, ‘true turnover’ 500.5) so he has a 9.5 if it wins (409.5-400)  and 9 if it loses (100-91). ÂÂÂ
Betfair would have reported total matched bets of 382 (with ‘true turnover’ 1000.5) when in ‘reality’ (if our "trader" is in fact a "gelded bookmaker") there is only the two bets he has written 100 @ 4/1 and 409.5 @ 2/9 or ‘turnover’ of 509.5.
Coming back to trying to answer your question – Betfair have been asked what is the amount decided on the event – or open positions – they refuse to disclose it.
2.  Yes they do go to 0% for market makers, and even provide incentives – usually (partial) rebate of losses.  The bottom line is these are the players that make an exchange work – imagine a stock exchange without brokers they bring liquidity and stability to the ‘market’.
[sorry this para is a late ‘edit’] – Also – don’t forget so called ‘white label’ sites where the external operator also earns revenue – some of the professional players do deals in respect to their own betting not just the affliates they bring along.
There is no doubt they should be taxed and levied but that will affect the prices the offer (removing the advantage of exchange betting in the punters eyes). ÂÂÂ
From the tax perspective the HMCE report leaves this option on the agenda.
From the levy perspective – trying to tackle exchange layers (winnings) isn’t, IMO, the answer. As I have said before an exchange is a cess-pit, its very hard, without specfic rules to sort punter from trader from bookmaker – therefore there isn’t a "one rule fits all". ÂÂÂ
My view is that a punter (viz not a licensed bookmaker) who opts- out to bet (be it for, or against, a runner) with another punter, they should both pay a turnover fee (on their stakes) to racing – but if be bets with a bookmaker he pays nothing (its the bookies ‘problem’ and its built into the price offered).  [Note I left the punter turnover rate and any rules out on purpose]
This would ensure that any user of a betting exchange in the "business of betting" either as "bookie" or "trader" (gelded bookie) would get a license so they didn’t pay a turnover impost (which would by the way route traders) but were taxed/levied only on their gross profit.  The upshot would be that most punters would end up betting with the (now) licensed users and not pay any turnover levy on their stakes.
I know, I can feel the cringe, and see Ian’s hackles rising – but can someone suggest another way to reach a fair accomodation.
I have strayed a little further than I wanted to, but I am trying to stick the tdk’s theme which is are the arbs/traders ruining the game and what to do about it.
rouge homme
(Edited by redman at 10:12 am on July 5, 2003)
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