How to lay £600m worth of bets on Betfair?

29/12/2011 | By More

That has to be the #1 question after yesterdays debacle in one of the feature races at Leopardstown.

To summarise, a mysterious lay bet appeared and stayed on the winning favourite at 29’s right up to the finish of the race. The ‘layer’ offered up £21m at 29’s creating a £600m liability. Betfair voided the in-running market.

Betfair have come out officially and ruled out that it was them or any account controlled by them or that they had a commercial interest in it. So it would appear it was just a common lay that created the error. But the question now shifts to who was this layer and how did they create the error? Nobody on the planet has £600m to gamble on a single runner in a race, so that points to some system quirk. There are checks in place that stop you exceeding your account balance or exposure limit, so what could jump over both those hurdles?

The amount of the Lay was curiously near the value of a 32bit binary number, slightly over if you add in additional stakes. The range of values of a 32bit binary is -2147483648 to +2147483647 which fits with the stake amount displayed on Betfair. You can create an error by forcing overflow or underflow with a calculation involving an integer, so it’s not impossible that this could be the source of the error. There is a good explanation on this link, curiously to do with customer balances: –

http://weblogs.asp.net/dvravikanth/archive/2008/03/10/integer-overflow-amp-underflow-revisited.aspx

I can’t comment authoritatively on the way that Betfair have coded their back-end, but lets just say that it’s not impossible that something like this could be the cause of the error. It could be that the exposure calculation is done using an integer and this layer just fluked it somehow. If it is something like this, then I am pretty sure an arms race is already underway to exploit it. The ability to force a voided market is potentially quite valuable, so Betfair should announce what the error is and what they are going to do to solve it, immediately. The person who placed the bets knows what created it, so that layer is hot property at the moment!

By quoting terms and conditions to void the market, people were quick to spot contradictory terms that stated that in the event of a bet exceeding agreed exposure all bets will stand, whoops! You can find the clause under section 9. Has Betfair has possibly opened themselves up to a legal issue?

I get the feeling this story is going to rumble on for a fair bit. But I sense we are nearer an explanation.

Leonhard Euler proved in 1772 that 2,147,483,647 was a prime number

 

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Category: Betfair

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Loved sports and statistics all my life and eventually found a way to make a living from it. On this blog I chat about my experiance in the market and my opinions.

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