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Prufrock,
‘bots developed by part time programmers or programmers with a passion for racing are going to be only as good as the intellengce of the punter.. it’s just an aut.omated process.
But those with low level system access… unbeatable.
A couple of thoughts…
Rule one of preferential commission treatment – it’s confidential – you tell anyone, or it becomes known that you receive a certain rate your commissin rate, your commission will revert to 2%+your differential below 2%  [and they are now big enough, with a queue lining up to replace anyone that fell from grace, that they could do this]
‘bots (short for web robots) exist but generally refer to systems that automate a user’s access to a website – hence they can cause all sorts of problems – due to the lack of expertise of the programming user, or too much… because they cause high access rates to pages that are designed to be viewed by humans so are ‘heavy’ in "look and feel" – this is why Betfair (and most other operators) seek to get rid of bots (as per the Guardian article Matron posted).
However… there are other ways….
Betfair (et al) provide deep system interfaces (and some deeper than other) to third parties (eg. Betcollector) – calling these systems even "very good bots" is akin to calling a tenth dan black bet just a black belt.
These deep system interface make it simple for some to automate their transactions (without interferring with webiste performance) – and more simpler for others – at the high end we are talking about sophisicated wagering risk managment systems (operated by companies/syndicates that are not in it for the ‘love of the punt’ but on a purely business basis).  They earn their revenue in two ways – (i) by profitable risk management and (ii) by receiving rebates on losing bets (or put another way a revenue share of commission receipts from the winners on the other side of their losing bets).
I’ve been through the math before – there is a lots of reasons (from Betfair’s perspective) to go as far as revenue share with marketmakers (irrespective of the means the use to do that) that said I’m sure that (from purely commercial perspective) those arrangements would be limited in number BUT still represent an enormous amount (proportion) of matched bets.
The relationship with these parties also goes some way to explaining why ‘mere mortals‘ don’t get a commission rate less than 2% … why?  because betfair’s payment to market marketmakers may have a minimum guarantee on losing bets (because if you are running a sophisicated risk management system optimally you would have to fact to this into it).
It should not surprise you find out that these risk management systems "multiple home" viz. they collect to more than one wagering operator to (a) seek out arbitrage opportunities and (b) manage risk.
The practice then of guaranteeing rebates / commission share is then a means of frustrating competition (from other betting exchanges) because offering lower commission rates to everyone means marketmaker (the creater of depth and liquidy) is likely to earn less if punter expenditure migrates from (say) Betfair to another exchange (say Backandlay).
One thing to be remember is that the HMCE report and the judgement by Justice Hooper in the Sporting Options v HBLB (along with outher comments by Betfair et al) clearly state that winning "punters" winnings are (in aggregate) about twice what Betfair (other exchanges) earn in commission revenue.
Given Betfair’s announcements about the small percentage of users who earn more than some UK tax treshhold it should be pretty apparent that the "winnings" must be heavily concentrated with a smallish number of risk management providers – it also means that for a very large amount of their "matched bets" their expected commission rate is well below 2%.
Other users of deep links are the so-called white label betting exchanges.
Lastly, just for the record it wasn’t me (as an Aussie)who told Tony25 about him whose name should not be spoken… much less written down ;) – if you can spell it :)
(Edited by redman at 10:26 am on May 8, 2004)
tdk
Don’t you think perhaps that you should be reporting your suspicions to the JC?
No one wants to be the dobber or whistleblower but perhaps your intuition, tempered with the edge of cynicism, is what the JC needs to give it a leg up in bring this issue to a head.
rouge homme
tdk, what pray tell, gives you reason to think that there is 0.1% that it is not a platform for fraud.
a betting exchange is 100% a platform for fraud – and not just "major" fraud – but low level systemic fraud – which, when uncovered (as it will be), will completely undermine the public’s belief in the integrity of racing as a (primarily) honest wagering plaform and send everyone off to sports betting, FOBTs and virtual racing.
RH
no one here is that stupid to think all that would be required is "a few blokes sitting in front of a pc in a Portman Square"
exchanges facitate anyone laying a horse – fair or nefarious – and with it an exponential increase in security and integrity monitoring costs.
RH
it would be if the exchanges, and importantly those in the business of wagering who conduct their business through exchanges paid their levy contibutions.
users pays … and exchanges make for far more work so should pay commensurately more.
RH
tdk
I’d agree with all that too… but who is going to pay for it… if exchanges have increased the risk a hundredfold surely they must wear the cost of that extra policing (though I would argue that they shouldn’t do it as it needs to be ‘independent’ so therefore they should cover the cost in cold hard cash).
I think the two issues, integrity and payment to racing, go hand in hand.
However… we know that racing makes much much less from a dollar wagered in a betting exchange – and in fact that the users who win (regularly) do not contribute (equitablely) to racing – despite the possibility that they may be the ‘criminals’.
One thing that always worries me is that it is possible to ‘launder’ winnings – (by simply betting the opposite proposition with different wagering operators). Only betting exchanges allow anyone to lay (or bet against) a runner.
For example, and this just an example or as the say in the movies any resemblance to a real event is purely accidental, but let’s say a farrier wanted to divert suspicion from his (previous layinging) winnings so he lays something to lose a motza and it does… but he has, with many bookmakers, backed it (in cash) to cover his ‘loss’.
Will it be identified? Maybe. But not if it there was a systematic approach done regularly in ‘smal’l amounts (or at least in proportion to the winning lays) – resulting in the ‘exchange’ account having a ‘bland’ appearence with many wins and losses and a net losing (or marginal win) position.
The bottom line is, that betting exchanges, like smoking, seemed like a good idea at the time.
rouge homme
Ian
what a load of codswallop
I have on many occassions discussed betting exchanges in a constructive fashion – attempting to rectify flaws – I have argued the subtlies of the twin bet methodology making it almost impossible to distinguish (under current law) a "betting exchange" from a "bookmaker".
But when all is said and done – I have two concerns that won’t go away (1) Betting Exchanges are, for racing at least, a huge threat to integrity of the SPORT; and (2) Betting Exchanges facilitate the avoidance of a fair and proper payment to "racing" (for the right to wager on racing).
You say that neither of those things exist – that is denial and counter productive to your cause (not mine because I don’t have one).
rouge homme
pathetic Ian absolutely blubbering pathetic
go and pour yourself a stiff drink mate
I, like most in this forum use a handle, because I want to say what I think NOT what I have to say, or should say.
No great detective work on your part – just simple abuse of confidence given I have communicated privately with you via PM (as I have with many other interested forumites) – certainly wouldn’t let you into a weighing room would we – you are not to be trusted.
Yes it would be easier if exchanges were banned – and that is the near unanimous decision of a joint government (Ausralasian Racing Ministers’ Conference) task force in Australia (with just the NT dissenting as they, with a population of 190,000 in a jurisduction the size of Europe, saw an opportunity to be the pirate).
Betfair rather than play by the umpires decision is pushing the limits – they are plundering Australian Racing’s IP even after being requested to cease and desist; they are breaking laws within Australia; and are enticing, aiding and abetting laws being broken by Australian residents. I have no time for any of that – and it irrelevant what hat I may be wearing at the time.
I, that’s me, myself and I, have no vested interest – you do and you are open about that I’ll give you that much. But as I have said before, you do yourself no credit by denying that the betting exchange model has flaws.
You suggest that Betting Exchanges are as pure as the driven snow, that they pay fair and equitable royalties to racing – they aren’t and they do not!
Perhaps solutions to the flaws and problems might be found – but you won’t find the answers by denying that they exist.
Your biggest problem is that your greed to make a personal buck will not let you give up one iota of ‘advantage’ you have over ‘tradtional’ wagering.
rouge homme
Ian
Your arguments are pathetic – even a double dose of Viagra wouldn’t stiffen them!
World best practise dictates that jockeys should, in the interest of integrity of racing, be held incommunicado for the duration of racing – what makes UK jockeys think they are saints?
I think Greg Nichols got it right when he said that the jockeys, collectively, were missing the benefit for them in these new controls.
If they can’t (freely) communicate they can’t be blamed when betting exchanges unravel the universe – particularly when one of their own ilk is implicated in some plot to defraud punters they will be able to say "even if I became aware I couldn’t have profited from it".
It would be just so much easier if exchanges were banned – they add nothing to the Sport of Racing, nor arguably to recreational punting on racing – they exist for the hardened pro’ punter and the ‘illegal’ bookmaker and can be subverted by criminal elements and just plain old fashioned greed.
And that’s without considering the fact that wagering on, or through, exchanges does not pay its full dues to racing.
But you aren’t going to agree with me either are you?
rouge homme
you know I am coming to the conclusion that this guy is going to get off …
if he sticks to his story that he was just astute and simply gathered knowledge (albeit that he had extraordinary access to horse, trainers, jockeys, lads etc.) – and provided no one gives him, and themselves, up, its going to be next to impossible to prove (beyond reasonable doubt) that he has done something wrong.
Dropping the 100k just may be the best accident to befall him…
How is that going to look for racing?
Bl**dy terrible!
What will the public perception of the integrity of racing as sport on which to have a safe punt?
tooting’s comments are ringing in my ears – not good.
What’s the upshot…
it will just open the door to nefarious laying – and betfair will shout all the better ist transparent – we have improved the information flow to punter.
not for me … I will give it away
This really really upsets me.
rouge homme
PS. robnorth, apologise for my motor mouth comment – I just think you are sticking up for the indefensible – though maybe you just want to see the best in everyone (which of itself is an exceedingly admirable quality). RH
Rob
Back to that fantastic form book of yours and your faith in it…
Did you lay Nimello on the day?
win bets? at what prices? what was your liability?<br>place bets? at what prices? what was your liability?
Did you put your money where your motor mouth is?
Are you sticking up for this for fear you are in the gun?
The person with the credability in this is James – his comments are plainly not "hindsight" but obviously serious reflection.
rouge homme
(Edited by redman at 9:37 am on July 16, 2003)
predictably I am with tdk, and tooting on this – particularly the later’s measured postback to Alan.
nore has made a dummy run that ended no where and distracted us from the real issues.
What gets me about this is that this guy didn’t get caught until he got too greedy (and/or too many people started to be aware of his activities and "joined the train") and there were a couple of extraordinary drifters in the market – not because it was difficult to find "backers" for them – but the "layers" (really "against backers") were prepared to take, or offer, any price because they knew it couldn’t win.  This raised alarms that couldn’t be ignored.<br> <br>In my opinion, the real problem comes with low level fraud, and it is is fraud, where someone with inside knowledge just grafts a few dollars (or hundreds) by betting "against a runner" – no one is suggesting that the betting exchange lacks integrity in respect to the negotiation of bets – but rather the bettors who use the platform exploit it because it, for the first time, allows someone to "bet against a runner and win without having to bet on the winner".  <br> <br>This is a real problem because, one day, the the betting exchange audit system will pick up the scent and unravel the whole sorry tale. <br> <br>In this regard the betting exchange’s integrity is arguably its own worst enemy – it creates the problem and then solves it – but it would be better if the door was never opened in the first place.<br> <br>This "farrier O’Sullivan" thing’s tentacles are going to reach all over the place and will damage racing’s integrity – and there will be more – and each time one of two things will happen.  Punters will loose faith and stop betting, or punters will accept that its systemically corrupt and do their best to get in on the act.  As it polarises it becomes self defeating – those that jump to the "dark side" struggle because there is less money in the "pool" and eventually "jump ship" and you have a death spiral.  <br> <br>I must say that that British Racing already leans to the "dark side" – which is perhaps why some think they can get away with anything. ÂÂÂ
Non-triers (where trainers a playing am accepted "game" with the handicappers (and punters) to get a horse weighted right for a "plunge") are rife in the UK.  This is not the case in most other racing jurisdictions (like Australia for one) – which is perhaps why our regulators have come down so tough on betting exchanges.<br> <br>The Australian Governments’ Task Force has clearly found that the facility afforded by betting exchange to "against back" is an unacceptable threat to the integrity of racing (for that matter any sporting event) and therefore should be banned on that issue alone. ÂÂÂ
They also found that there were other major points; the funding of racing; the proper payment of government taxes; and the increased risk of problem gambling and general harm from encouraging ordinary punters to bet "odds-on" exposing them to much higher losses for low, if not negligible returns.<br> <br>Betting Exchanges may well fall into that category in history "great idea BUT".  Bit like the Titanic really – hailed as the safest ship ever – sunk on her maiden voyage, not because it hit an iceberg but because of simple design flaws with its bulkheads.  The Titanic may have become the greatest ship in history if it hadn’t hit an iceberg.<br> <br>Farrier O’Sullivan is just the tip of the first big iceberg – and Betting Exchanges have hit it!  But that was inevitable when you sail into an ice field at full speed.
rouge homme
(Edited by redman at 9:55 am on July 15, 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)
