Posts Tagged Void
£1k account caused £600m Betfair error
Posted by Peter Webb in Betfair on December 30th, 2011
Betfair have issued a statement this afternoon outlining the error that caused the exchange to misfire. The full statement is here: -
But here are some bullet points:-
“This bet was placed by one of our UK customers trading the race via our API or Application Programming Interface (bdp.betfair.com/) using an automated program (a “bot”). Their bot had developed a fault causing it to try and place a very large number of bets on the Exchange. These bets were large in size and mispriced…… However, due to a technical glitch within the core exchange database, one of the bets evaded the prevention system and was shown on the site. This was an issue that was triggered because of a unique sequence of events that had never happened before.” – “In this case, the customer had less than £1,000 in their account so none of these bets should have been accepted.”
“The Betfair technical teams continued to investigate the details of the fault and, having identified the issue, worked on putting a fix in place which was applied at 10.15pm on December 28th.”
“Following extensive testing, we can confirm that there have been no subsequent occurrences of this fault and we’ve taken steps to prevent its reoccurrence in the future.”
“Again, I would like to clarify that the account in question has no commercial relationship with Betfair other than being a customer. Our reputation has been built on integrity and we have been pioneers in the industry in ensuring that betting is carried out in a fair and transparent manner. By making the voiding decision, I can assure you that this decision was not taken lightly and that we have implemented what we believe to be the fairest solution in these truly exceptional circumstances.”
How to lay £600m worth of bets on Betfair?
Posted by Peter Webb in Betfair on December 29th, 2011
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
No……………
Posted by Peter Webb in Bet Angel on December 12th, 2009
In the thick of battle today, pushing in orders, moving them around, getting filled on some, not on others. Ducking in and around the market, taking some risk. Phew, great total on one race, great job. Celebrate by taking five minutes out and getting a drink before sitting back down to my PC.
Race void!
Doesn’t happen very often and it’s an unfortnate circumstance that has brought it around, but trust it to happen on one of the best results of the day. It could have happen on something less important. As it is, that’s wiped out a nice chunk of my days trading. Will just have to work harder on the remaining races by the look of it!