Forum Replies Created
- Posts
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
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)
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)
Ian
you know I am talking about British Racing and you know that the Government won’t ever let it happen. As to offshore SP – as I undertstand it they all take it from the offshore market rather than collusion to set a UK SP.
as to GPT – its not over yet … by a long shot
as OFT I have never made any pronoucemnts on that, though in case you are referring your erroneous comments suggesting the OFT has overturned the IP rights … that’s not true is it – they have just question whether the BHB owns them of other elements of Racing
as to regulation .. nit sure what you mean but I read in the DCMS papers more or less what I expected (given the UKs desire for a "free-market") but that’s not say I think that’s right
rouge homme<br>
sh*pile
re 2. – my point is that for an SP to be returned (or the shows to be assessed more than one bookie has to be at that price – that is the standout (or best) prices is not used.
Betting exchanges only show the BEST price and claim its represents the value surely we are not arguing on this point. Betting Exchanges balantly mislead the public as to what the price is.
re 4. I know this BUT they don’t do the math to work out display the weight price. Its not ard its <br>For N (where N is the number of runners)<br>(i) for each price half the matched-bet<br>(ii) multiply (i) by the price (=liability)<br>(iii) add the stakes and the liabilites<br>(iv) divide liabilities by stakes to get weighted odds<br>(v) divide 1 by the weighted price to get market percentage<br>for N=1 to N add (v)
– be a lot easier if Betfair just said "here it is"
re 5. what are you smoking – this is the 2nd most fictious figure in wagering (the first being matched bets – which just bullsh*t
lastly – I don’t have to ask bookies – that is what there are betting ring stewards and price assessors for (plus we have the (substantial) tote that also gives assessment of weight of money (in an unbiased mathematical way)
rouge homme<br>
There will never be an industy SP – industry SPs maybe but not one colluded SP – on this Wit was right on the money.
It would be extremely beneficial if some rules of SP assessment were adopted by the betting exchanges
1. you must be able to have a "reasonable wager" so be able to stake at least say 100 quid
2. technically if a betting exchange is like a "virtual betting ring" – there must be three "bookies" prepared to lay bets at the price (so that’s now at least 300 quid – but three opinions).
3. on top of this it must be the "real" price – that is commission (at the highest rate) needs to be deducted before the displayed.
4. if betting exchanges were being fair (as a market) they would display both total stakes, total liability and therefore the "weighted price" of all bets struck (and it should be adjusted for the commission payable(effectively the fully weighted opinion for and against a runner) – this by the way is what a tote does (weighted price after takeout).
5. the total indicative overround should be taken from the sum of 4. above
6. market misleading bids/offers should be banned from display – in fact ideally only bids/offers over the 100 quid should be allowed – all others should be price takers (nibbling off bits of the 100+ market maker’s prices)
BUT you know what, exchanges would resist that degree of openess fiercely – why? – because it would show up how poor a value they really are (and just what margins the "pros" are building in).
rouge homme
(Edited by redman at 5:42 pm on May 22, 2003)
Ian
I’m not that inconsequential – and its fair to say that I have a cordial relationship with Betfair who have been more than happy to debate issues with me and share information that leads to a better understanding. ÂÂÂ
As to Betdaq and Sporting Options – I have never attempted to make contact with them (nor, as far as I am aware, they with me).
1. we are at loggerheads – your refuse to given any ground – the bottom line is though that whatever a "betting exchange" is, what it isn’t is a "traditional bookmaker".
2.  all depends on what is a bookmaker – your argument – one that I have used – viz. the "twin-bet" bookmaker – is a completely legal device in England – and technically in Australia.  The catch, in Australia at least is that a "bookmaker" must, if he displays a price, has a minimum wager obligation – (to lose between 1500 and 5000 depending on the sport/bet type etc.).  This sort of precludes ‘normal’ "betting exchange" operation (save imposition of the same conditions on exchange users).
3. disagree – I think its based on principle – with the counter balance argument is to release "bookmakers" from duty and levy, but that’s not likely to happen is it?
4. yes we agree – but usually if a court goes against a statuatory body then the legislation is changed to fix the defect that allowed the successful court challenge in breach of social policy – so its a damned if you do damned if you don’t proposition.
5. yes we agree – though in this case each party has the opportunity to use the courts.  The fact that these rights exist doesn’t detract from fact that owners of IP should be paid – its about what’s a fair fee (and abuse of any monopoly power).  When comparing the UK to the rest of the world in racing – the UK wagering industry gets of lightly – so why you think betting exchanges would get of even more lightly is a bit far fetched.
6. These arguments are sure to inspire the opposite effect – at the moment your Government is still a supporter of "free-trade" in gambling services – BUT I can’t see that lasting if any wagering operation ups stakes to a more favourable jurisdiction in a "race to the bottom".  The technology does exist and is getting better by the day to enforce jurisdictional boundaries any mainstream company (in gambling of not) can see the writing the wall in that regard and therefore is seeking to leverage that seachange to their long term advantage.
I enjoy our debates – and we are like minded souls in that no quarter is given, nor sought. ÂÂÂ
I certainly wouldn’t say that your views were inconsequential because you give serious consideration to the arguments and invest considerable time to debate.
Despite your suggestions to the contrary – my future does not depend on which way this debate is finally decided – which is why I often express my concern for you / your position as you obviously have a lot invested in the decision going "your way".
Whatever its certainly not frustration talking!
Lastly as to "utopian naivete" the world would be a better place if there we no taxes, no levies, we could take what we want, eat what we want etc.  … but its not like that is it –
one thing is for sure the world will remain a place of separate countries with separate cultures and separate social policies – with an expectation that foreigners will not breach their sovereignty – even in wider free-market communities like Europe! ÂÂÂ
If they all have that view then increased, not lesser, online regulation will come.
rouge homme<br>
(Edited by redman at 3:59 pm on Feb. 23, 2003)
Ian
You deceive of delude yourself.
You just don’t get it do you?
Th BHB is charging the "betting exhanges" for the use of their IP – IP which underpins their business – at the fair an equitable rate of 10% of its gross revenue.
The BHB also want to charge "betting exchange" users – not the betting exchange – for their "bet-initiated" profits – the same as it levies/licences other bet-initiators who operate their own systems (these persons are sometimes called "bookmakers").
This is fair and equitable – it is not "double taxing" "betting exchanges" – if "betting exchanges" refuse to collect the proper levy (and for that matter tax) then be it on their own heads – it’s Betting Exchanges who are choosing to be "double taxed". ÂÂÂ
It is the Betting Exchange that wants to build its whole business model around a commission on winnings – well bluntly – they have nicked that model from HMCE, the HBLB and the BHB – and basically 15% of bet initiatied winnings should be going to the Treasury, 10% of bet initiated winnings should be going to the Levy (or BHB) – what the "exchange" wants to charge for its fee is matter for it!
It’s not about "value for money" its about avoidance – and legislative lag is rapidly catching up with betting exchanges – and you may be lucky that you haven’t opened you doors yet.
I also note with interest the story on the RP website today "NJPC to enforce exchanges ban for on-course bookies".
The door is about to be slammed shut because betting exchanges aren’t bookmakers – and, even in the case to Betdaq, as a twin-bet bookmaker, the true counterparty is a punter.
Even the comment in this article from Andy Smith, trading for Dick Reynolds, highlights the grossly unregulated environment – a vacuum – that is betting exchanges.  All Betfair’s claims as to audit trails etc are irrelevant if there is not a regulatory framework and enforcement of that framework.<br> <br>It is a matter for the UK – but Australian Bookmakers are not permitted to offer "field against favourite bets" unless the favourite is 5/2 on – 1.40.  If bookmakers are not permitted to offer such bets how could ANY betting exchanges permit unlicensed persons to offer or make such bets ("against backing") on Australian Racing?  <br> <br>The NJPC could no doubt out in place a similar rule – and the BHB could enforce such a rule through its civil licensing of its IP.
rouge homme
(Edited by redman at 1:10 pm on Feb. 23, 2003)
THEFT
is when you take something is not yours – Racing IP – is not yours – you either pay the price demanded by the owner or don’t use it –
SIMPLE REALLY
rouge homme
(Edited by redman at 7:12 pm on Feb. 22, 2003)
Hiya Ian
Firstly, I have no vested interests – or to be very clear any pecuniary interest – though you do!
Secondly – a lot of my arguments are indeed fact – and I even present the half full and half empty perspective of the "facts" – but they are nonetheless still FACT.
My orchard example is not misleading – it is you who wants to pillage and plunder the orchard, and perhaps rape the orcharist’s daughter…
As I have stated over and over again if you want to avoid "tax" – or even as a thief pay VAT on stolen apples to legitimise your theft, or not, as the case may be – that is a wholey separate matter.
My issue is the Levy to racing – I think betting exchanges are nicking the "product" and using ‘legal’ devices (or loopholes) to minimise their (or more correctly their user’s) levy payments.
I find it interesting that you use a sports betting example to press your point – again I have stated, ad nausium, that I have no issue with BetEx sports betting – generally clearly a binary event in the first instance.
Betting Exchanges are a more efficent business model than "bookmakers" for two simple facts – the first – they faciliate the avoidance or GPT/Levy costs by the punter (costs that he would othersie have to pay as it would be incorporated in the price he bet at) – the second – they collapse the "margin" that exists in a multi-outcome event to that of a binary event.
The first is, simply, WRONG. The second is more complicated – and is further clouded by the "integrity" problems that it brings about for what is a fundamentally a wagering sport.
The October 6th Act – the Finance Act – sets out clearly that "bet brokers" should be taxed based on applying the same principles to THEIR USERS (not the exchange itself) as though they were "bookmakers" – that is "bet-initiators".
The "error" – simply aggregation or non-aggregation.
The KEY – if there is such a thing – appears to come down to who ‘offers’ a price – that person is the "bookmaker".
As the Betdaq position shows – the lack of definition as to who is, or is not, a "bookmaker" is a the heart of this issue.
If an exchange can be a "risk-less" bookmaker and thereby absolve his "offering" or "requesting" punters of any tax/levy liability so be it.  Somehow I just don’t think that will happen.<br>
"the local judiciary will not be minded to be receptive to civil cases brought by the BHB against one of its most profitable local companies"
<br>How you can brazenly promote theft of racing IP for your own ends astounds me – how do YOU sleep at night?
You use the example of theft of music industry IP as justification – let’s be clear here – the music industry doesn’t have an issue with "fair use" rights but that doesn’t extend to commercial exploitation!
Lastly, again I state this is NOT about fleecing the consumer – the consumer has a right to choose – but if tax avoidance systems like Betting Exchanges exist – and what’s more brazenly promote themselves as legitimate – it make it very hard on the consumer to "do the right thing".
The problem is, as my father used to say – "locks only keep honest people out".
As I said before, and will say again, obviously government will have to sort this out – because people like you unfortately have to be told to do the right thing rather than being trusted to do the right thing!
rouge homme<br>
(Edited by redman at 12:17 am on Feb. 22, 2003)
Thanks raymondo
But I am still waiting for some reply from my ‘mate’ – however while I am waiting waiting… do you have a view as yet?
rouge homme
Ian,
Strong words – and bordering on offensive
You have brought some PM discussion into the public forum – and IMO twisted them to create a favourable argument.
For the record then – I was part of a consortium that tried to establish a betting exchange for sports betting in Australia, (it was plainly clear under our legislation (then and now) not possible to operate on horseracing anywhere in Australia).
You make out that I disagree with you on the Betdaq mode of operation – or the "twin-bet" mode as I call it – that is plainly not true.  I used the same device to argue that a "bookmaker" in Australia should be able to operator a betting exchange – our regulators (in the jurisdictions that mattered) however took a dim view of the "riskless" nature of it to the "bookmaker".
It is not a case of sour grapes – in fact like you I am looking foward to operating a betting exchange on sports – and, if an equitable way can be found, on horseracing too.
Without wanting to get on a high horse – I have some principles – and despite the opportunity to make money I won’t (a) operate outside the law (the letter or the intent) nor (b) free ride on someone’s IP – and with racing its critical as it, as a sport, depends almost exclusively on revenue from the wagering nexus.
If this means I don’t get rich – I won’t lose any sleep!
My view is simple – someone builds a toll road, they charge a toll – it is then the choice of individual to pay the toll and get to use the road  – or not to pay it.
I applaud your arguments about e-commerce, and your enthusiasm to pass on the savings to punters.  I came from, and still do come from, the same perspective.
Where we differ is the obligation to pay a fair and equitable IP rights fee to racing. ÂÂÂ
On this point we are diametrically opposed – you believe you should have to pay NOTHING and only grudgingly would pay what was manadated on you.
All I know here is that it is only grubs and freeloaders that have to same view as you – the Australian Bookmakers’ Association fully supports the principle that racing be paid a fair product fee – and that that product fee should be fair and equitable when comparing the payments made by different types of wagering operators (bookmakers v totes).
The big storm brewing is whether or not a "betting exchange" is in fact a parimutuel betting system (tote) – if it is it will make life very interesting for UK betting exchanges as they would then be in breach of the TOTE’s exclusive authority in respect to horseracing.
The integrity issue (for horseracing) is almost insurmountable – but that is matter for each jurisdiction to decide in respect to the goverance of horseracing in that jurisdiction.
If the UK is happy to permit "against backing" – it is matter for the UK alone – but under no circumstance should that be considered as an authority to operate in that fashion elsewhere in the world.
To use one of your catch-cries, "the jury is till out" on cross-border betting – the UK (DCMS) is certainly a vocal advocate of "free-trade" – but it faces significant opposition.
At the Swiss Institute of Comparative Law’s Internet Gambling Law conference last week no other country came out in support of illict cross border gambling – the DCMS rep presented his case well – and there were supporters (operators, or would be operators) in the crowd – but the overwhelming evidence was things are getting tougher and tougher on cross-border gambling if the juridiction of the punter is against it.
I made the point above that I support the Betdaq (twin-bet) model – but it is clear from the drafting of the UK legislation that the intent was that Betting Exchanges would NOT be taxed/levied on commission revenue.
I have tried to contribute to the debate in thoughtful and structured way.
As to name calling – I do not believe I ever call you a "conman" –  as to being a "grub" – well that "tag" is something that I can say I have added to the TRF lexicon. ÂÂÂ
As I remember I put to you a set of questions of principles (to which I actually commented that I expected you would support) when you replied in the negative – well you were a grub.
Speaking of grubs – if I was to use the example of a orchard – the orchardist grows his (grub-free) apples, picks them and has a "bricks and mortar" distribution network sells them wholesale for 20p each maybe making 5p each – the "retailer" with significant cost actuall sells them for 50p and also makes 5p – and the consumer eats the "grub-free" apple.
Then along comes the "pirate" – nicks the apples from the orchard and sels them online for 10p (he has some costs) making 5p.  The consumer gets the grubby apple for 40p less thinks that’s great in fact I’ll even had a second.
The pirate says – I am providing a great service!
Is this fair – NO – but that is how you and your kind at Betfair, Betdaq etc operate.
I do get annoyed when rational argument is ignored – as I made the point above I have presented both cases and highlighted the anomolies – my point remains that a betting exchange is either a "bookmaker" or its a "betting exchange" with special rules that apply "bookmaker" principles to the "bet-initator" or some other separate set of rules explictly for this "new" form of wagering.  It can’t be whatever it feels like on the day.
It is encumbant on Government the clear the issue up.
As to the interest of the punter – I am not forcing him to consume the product – in fact that goes against any principle of reponsible gambling – the punter has a right to choose – but he has no right to free-ride on "racing" by using a non-contributing wagering operator (and ven more some if it is himself).
My consiered view remains that the Betting Exchanges – as they profit off racing’s IP – should pay 10% of their commission AND the punters, as they are betting in a margin free environment, should pay the levy on their "bet-initiated" profits (over a month just like bookies) though net of commissions paid to the exchange (that said there are strong arguments as to why no such largesse should be granted). ÂÂÂ
Logically that should apply to tax/GPT but that is not my issue.
That is fair and equitable.
You may lose a key distorting element in favour of your business model – if so bad luck
rouge homme
(Edited by redman at 8:41 am on Feb. 21, 2003)
apracing
let me be clear – I don’t say that eveyone who "lays" a runner or put another way "against backers" are"conniving corrupt cheating scumbags, totally lacking in morality" – it is you who said that!
jokes aside – my biggest problem with betting exchanges remains that ‘honest’ "punters" create a smoke screen for those who would rort the system
my second biggest problem is that it betting exchange activity is not taxed equitabley compared to other wagering operators.
I have published papers in leading online gambling journals detailing the mathematics and principles behind my arguments and NO ONE has challeged them.
You will have no doubt noted by balanced arguments – even helping my mate Ian Davies out on the "betext as a bookmaker argument" –
The recent article in the RP about Betdaq’s different structures – bookmaker in the UK – betex P2P in Ireland one to minimise tax and levies in a "Gross Profits" environment and one to minimise/avoid tax/levies in a "turnover" environment highlights the unsafe ground this is all one.
Something has to be fixed. Legislative lag always catches up with the bad guys.
IMHO Betfair speaks with forked tongue – their dealings with the Australian Racing industry are reprehensable!
They have to expand offshore and exploit legitimate legislative distortions that exist in foreign jurisdictions – democracies no less than Australia – because according to my (solid) sources the GPT review will go against them and for that matter Betdaq.
They, and their users will then have to lump it or move offshore – and with that any remaining hope that the UK will continue to advocate "free-trade" in gambling "services".
Betfair have the moral backbone, or the lack thereof, of a grub.
Do you have principles – or can’t you sleep straight on the rack either?
rouge homme
P.S. Tooting looking forward to seeing the article hopefully, like most of RP it will appear in the clipping library tomorrow.
Ian,
We have had our share of skullduggery too, the thing is these days we don’t have ‘much’ at all! We don’t have the anything like the attemped rorting of the handicap in the UK.
We also do not have any system whereby a punter can profit simply just by knowing that something will be beaten.
If the exchanges keep the data available online (instead of whisking it away to a secret vault a few minutes after a race) so that anyone could examine betting data trends etc. I would feel ‘better’.
Given the lack of comment to my question it would seem that, at least in this case, there was no blatent attempt to use a betex to someone’s advantage for what a very poor performance.
But who would know – do we trust the moralists at Betfair to investigate and act. Not bloody likely.
rouge homme
Tony I have to agree – and interstingly Paul Haigh in RP had his Racing dos and dont’s – the New Year wish list included the following on the same theme:
For all betting exchanges<br>Not just to accept the rather feeble instruction that trainers should not be allowed to lay their own horses, but to look carefully at all accounts to see whether there is any pattern of any stables’ horses being laid, or any jockey’s mounts for that matter – then to blow the whistle, and to hell with rules of confidentiality. (Maybe it would even be a good idea if they checked individual clients’ accounts to see whether they have laid any particular horse to lose a much larger amount than usual, and then invited the integrity services to check whether the client in question has any friendship or association with the connections of that horse).
rouge homme
