Sporting Options

[Bogside]

Nick, the point is do you think it is OK for anyone to setup an exchange and call themselves a betting exchange owner.  I certainly do not.

I did not lose any money with the SO disaster but have lost out to other small online operations.  I only trade with Betfair and have been in this game for over 30 years as a bookmaker, owner, punter and for four years a BF trader full time.

[Nick Hatton]

Bogside

I certainly don’t think it’s ok for anyone to open an exchange but IMO Ian is NOT just anyone – as I’m sure nearly everyone on here will agree ! :biggrin:

Hope we have some good discussions on here in the future.

[Bogside]

Ian, I know exactly how easy it is to obtain a Bookmakers Permit.  I have one.

You don’t have to be bright to setup an exchange.  I could have one next week if I wanted.  This should not be allowed.

[empty wallet]

fom small acorn,s…….came the big three or should that be four

sorry GH

missed your oaks and acorns quote <br>

(Edited by empty wallet at 9:15 pm on Nov. 20, 2004)

[empty wallet]

i took BOGSIDE,s advice and checked

<br>The Sporting Exchange Limited was founded in August 1999 by Andrew Black and Edward Wray in order to commercialise proprietary betting technology that had been under development for the preceding year.

btw,did these two chap,s need a bond?

<br>Hope u r as prosperous in the same timespan IAN,but on reading a couple of you post,s on this thread,i do,nt think you need the money ;)

[Bogside]

Grasshopper, the list of failed online betting operations is the reason it should not be possible for a two bit setup to exist.  Lots of people have lost money with these failures.  It’s more difficult to setup a taxi business than a betting site.

Some people do strange things for an ego trip.

[canada]

Bogside,exchage operators dont need a bond as they dont make books,so no liabillities…They just have expenses….It all comes down to how honest the directors are….They could put up any bond and liquidate it and the clients account ,then take off or as in SO’s case ,squander it…Ian has shown himself to be honest and a good fighter for exchanges in general,so your attacks are on the wrong person….As it stands now and even after the new gambling bill is introduced ,it all depends how honest the directors of the company are as they can legaly go into clients account any time they like….Many bookmakers like luvbet have gone under and spent client money and no big bookie bailed anyone out..So well done Betfair and all honest exchanges…I personaly wouldent mind a few more safeguards on clients account,like a monthly audit with figures being made public but for now Betfair and Back and lay have proven themselfs honest and deserve some credit for that.

[Dungheap]

Bogside, I correspond with Ian on a daily basis on YM. I have often made suggestions to him about moving his exchange along faster. I have each time recieved a rocket up my a**e from him, as he would prefer to grow slowly safely and make sure no one, himself or the punter is at risk. In terms of feeling my money is safer, then B+L is IMO even safer than BF.  The reason that the markets liquidity and betting activity are slow is exactly because each and every position you see on B+L is a clients position. Ian nor anyone of the owners/staff of B+L place any positions on the exchange. Nor more importantly will ever do.<br>Your critism of Ian and B+L is unwarrented and very unjust IMO.

[gamble]

Blimey there is no dullness in this house is there and a good job that our Mr Davies is a nightwalker and never loses a wink of sleep or the 39th sheep :biggrin:

Mr Davies made an all embracing statement that more or less sums up the state of most financial relationships in this country if not the world.

The safety of your money is down to the integrity of the people administering your account

I am off to brew up a cup but Davies has hit the nail here, and I will be back shortly to pull it out and give it the inspector treatment.

<br>flatcapgamble…don’t you all love him :laugh:

[gamble]

Lets look at the big picture first.

1. The big fraud…<br> I hate banks and financial instu’s like the plague as they treat customers like sheep..

Davies again..The safety of your money is down to the integrity of the people administering your account

Same with the banks and up until 1998 the Bank of England was entrusted with protecting banknig malpractice. The 10 billion BBCI ‘the terrorists bank’ scandal earlier implicated their good judgement and the FSA took over. We’ve had Barings since and of course the greedy lloyds brokers all putting greedy fingers in our pie. My bank Barclays risked my money and lost 150 million gambling on Mexico. Big collapses have changed thinking and rules, and the FSA consequently has a better analysis and grip on value at risk (VAR).

The exchanges are unlike regular businesses in that they hold vast funds of clients money very much like banks. They should in my opinion be vetted more closely and their VAR regularly assessed.

  I was keen for the Betfair Union Group (the defunct BUG of which I was a representative) to perform such a vetting of Bank accounts and business finances and report back to members. I openly suggested this to Adrian Black and co. but although we had the noses I doubt we would have had the nous for it. Wit you made some good points about the reality of ringfencing and I would agree it is far cloudier than Betfair make out.

We should have more protection as these are not ordinary businesses.

more tea, and I’ll be back

<br>flatcapgamble…What about the Nigerian 419 scam and all the email robberies. They’re all after our hard earned :laugh:

[gamble]

Bush Blair Bin Laden[/b] Betfair Back and Lay Bogside better betting

Not a sequence I would care to ponder over for long:biggrin:

Of course clients funds are held in escrow and exchanges would argue this is safe and possibly it is, but what happened at SO ?

Bogside you’ve waited long enough – you’re next up :biggrin:

[gamble]

I’ve known Davies for a few years now and I’ve had the occasional little dig at his exchange, however there is no getting away from the fact that he’s the original ronseal man and bakes the cheapest and most honest pizza in town. He’s passionate about his exchange, has built it carefully, and defends it eloquently and robustly.

  Credit for you starting this thread Bogside, and I like you also have concerns about two bit operators as you refer to them, however I see Davies not at all in that mould. I have often referred to myself as the son of Betfair, however being in the family doesn’t dull my desire for a competitive market place, and Flutter’s loss hit us all in the pocket. I demand competition.

 To criticize Back and Lay on its size is where your argument gets a bit floppy and bogged down. It’s not really fair is it ? as Betfair itself had its bunker days. I have defended Davies previously on ths size/liquidity thing because I see such an attack as highly personal. The man deserves credit not criticism.

However the odd earbashing is ok in my book  :cool:

 That’s enough from me and nice to see Cu about

<br>flatcapgamble… get off :laugh:  (edit)

(Edited by gamble at 10:54 am on Nov. 21, 2004)

[gamble]

Dead men dont hear plays :biggrin:

From one corpse to another Hopper it’s good to see you. I am going to look for that 1% and edit out.

[Bogside]

Ian, if I wanted to boost my ego on here (as you do with every post) I too would include the URL’s of the three web sites I own, the names of the four horses in training, the details of two other businesses I have stakes in.

I still stand by my substantive point that it should not be possible to establish and online betting site as easily as it is today.  

I have been with Betfair virtually since day one but, nothing would please me more than for them to have a proper competitor.  

[dave jay]

Bogside .. your arguements are not balanced or fair and you want to put down backandlay for your own reasons.

I think for you now to start going on about ego trips and what you do (have) is really what this is all about.

GREEN CHEESE !!!

:biggrin:

[gamble]

Sorry to trump you dave, but Bogside you seem to have skirted round the odd gamble.:biggrin:

Davies is possibly on the heath, I am a friendly soul, so lets banter a bit together. I see you’ve done pretty well for yourself with these three web sites. Are they racing related and do you advertise them ? I would suggest that putting up a website name makes practical sense – and boosting an ego, well if it does that, it does little harm, and if it doesn’t, as is likely, it is largely irrelevant.

I don’t think a lot of people are that far away from you Bogside. The SO affair must have the effect of strengthening punter protection in some way, much as BBCI shook up the banks.

Davies should be allowed to grow in peace, and time you excersiced those nagging nags. ;)

[wit]

hi gamble

>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>><br>The exchanges are unlike regular businesses in that they hold vast funds of clients money very much like banks. They should in my opinion be vetted more closely and their VAR regularly assessed. <br><<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<

On top of that, punting debts are about to become legally enforceable  (to what extent will we see the Big 3 getting into debt collection ?) and Betfair is already mimicking banks with KYC checks.

Expectations of both backers and layers are developing beyond the traditional "word is my bond" environment.    

IMHO,  the safety of client money on exchanges currently ultimately depends on the personal character of the folk controlling the money deposited – and faith is put in  more  than just their honesty – they are trusted to have the strength of mind not to wilt under commercial pressure.

In this respect Betfair and backandlay are in the same boat to my mind – with Betfair, client faith is with founders Andrew Black and Edward Wray as the only directors of The Sporting Exchange (Clients) Ltd; with backandlay, client faith is with founder Ian.

Question after the SO episode (and whatever may have happened there, the money is not where most think it should be) is:-

if "trust me" is not enough to meet punter’s new expectations, what can punters reasonably demand and what can betting providers reasonably provide?

So far both Betfair and backandlay provide, as I understand:

1.    A separate bank account with a major UK clearing bank, with the words "trust account" or "client account" in its title.

2.    That account at all times holding the full amount of  outstanding deposits made by clients and settled winnings of clients.

3.    The only withdrawals ever made from that account  being (a) stake monies paid to the trading arm of the exchange only as specifically directed by the client, (b) payments of balances back to the clients, and (c) proper commission due to the exchange.  

That’s great, and if properly operated, it stop clients deposits being part of the general pool of assets for creditors on an insolvency.  

But it does depend on proper operation – and on client faith with the exchange founders not to do anything with the deposits that the clients might view as inappropriate (any small print in conditions notwithstanding).

How would Betfair and backandlay react if there was punter demand for something more, for example :

4.    That their client account be operated exclusively by experienced stakeholders who are totally independent of their trading business.     In other words, put control of client deposits with someone totally outside Betfair and backandlay – an agent of independent means in each case and a "trusted third party", with no history ever of failure to meet financial obligations or criminal or regulatory convictions, disqualifications, investigations or allegations, etc?  

5.    That each client communicate its staking directly to those stakeholders to place with the exchange, so that no actual or purported client communication in respect of the deposits comes via the trading business ?  

6.    That those stakeholders themselves be independently and solidly insured/bonded against negligence and lack of fidelity by a financial institution rated at the minimum AA/Stable by Standard & Poors in the full amount of the sums due to clients from time to time ?  

7.    Alternatively, the stakeholders are brought within their own version of a  Deposit Protection Fund  (they aren’t within the existing Fund since the deposits they accept, unlike with a bank or building society, are not then lent to others, nor are exchange activities financed materially out of the deposits – exchanges make money when folk actually doing something with the monies deposited: they get relative peanuts from the interest ).

The Protection Fund run for the banks and building societies (and funded by contributions from them all) guarantees 100% of the first £20,000 and 90% of the next £33,000 (ie  max £48,700) in respect of  a protected deposit lost in an insolvency.  

How would exchange operators feel about taking compulsory collective responsibility for everyone licensed to operate an exchange?

How would punters feel about being obliged to pay for that kind of cover ?  

How would  both sides react to the cost and delays of having independent stakeholders controlling and checking on staking of client deposits in each betting transaction, and payment of winnings in and legitimate commission out ?

Would both sides, faced with something like this, maybe eventiually say that SO was an aberration that would have been picked up and prevented under the incoming Gambling Commission regime ?

There are risks everywhere in life, including as regards banks, insurance companies and pension funds.   Many of us have quite happily traded thousands if not millions over the years on the basis of a phone call and credit, and with the underlying transaction not being legally enforceable.   Bookies have lived and prospered on that regime, albeit suffering notable defaulting clients.

Now we’re getting into an environment of concern about deposits because exchanges can’t guarantee settlement unless they have the funds immediately to hand, so can’t work on credit.

Personally, at the end of the day I’m happy enough to trust in Andrew and Ed and Ian and manage my own exposure (though, davejay, I would watch out that withdrawals out arrive as fast as deposits are put in, or actual exposure could be multiplied by maybe 3 days worth of overnight take out/ put in).  

But then I never signed with SO, and maybe would feel differently if I had.

best regards

wit <br>

[Author]

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