Betfair to do fixed odds betting sportsbook

[Ferru123]

Betfair imply that this will only apply to low liquidity markets. However, they also tell us that 'on markets representing 70% of the sports betting market the Exchange is perfect- you get a better price and a liquid market for trading. But on 30% of markets our customer would be fully entitled to look elsewhere ... We also know from our own research that we lose 30% of our customer’s sports betting wallet to the competition'. I would be surprised if low liquidity events account for 30% of the average punter's turnover...

Jeff

[Ferru123]

Betfair also claim that 'Approximately 25% of our customers are net winners- as opposed to approximately 1% at a bookmaker.'

Of that 25%, it would be interesting to know what the average no of bets placed per person per account lifetime is. I would imagine it isn't very high, as I don't believe that anything like 25% of Betfair's customers have a long term edge...

Jeff

[enzabella2009]

Betfair also claim that 'Approximately 25% of our customers are net winners- as opposed to approximately 1% at a bookmaker.'

Of that 25%, it would be interesting to know what the average no of bets placed per person per account lifetime is. I would imagine it isn't very high, as I don't believe that anything like 25% of Betfair's customers have a long term edge...

Jeff

25% seems too high...So betfair saying that more then 800,000 of betfair customers are net winners? Did not Betfair say last year when they have introduced the PC that only 500 customers would be effected? So according to betfair 500 customers have made more then 250,000 in their life time but, more then 800,000 are net winners?
I am confused....

[Ferru123]

25% seems too high...So betfair saying that more then 800,000 of betfair customers are net winners?

Let's say I opened a Betfair account for the first time, bet on United beating City in a week's time, and then withdraw my winnings after the match (hopefully! ). I then forget about Betfair and never place a bet again. Strictly speaking, I would be a winner on Betfair. I imagine it's people like that who enable Betfair to make the 25% claim, not people who bet regularly.

Jeff

[enzabella2009]

So 800,000 customers have opened an account with betfair won with Betfair and forgot about Betfair. How can you forget about a site that was a lucky site. It' s still seem to high for me. Ofc I can be wrong...It's just my opinion and I can't prove my opinion with a real figure..

[hgodden]

The most interesting part for me is this, when talking about whether it is possible to compete with the exchange in normal markets

"Put simply, even if I tried I would not be able to run a competing operation on Betfair in the vast majority of markets. As the competition regularly finds, the prices would be inferior. So this will not sound the retreat for the Exchange, in fact, the product will highlight exactly how superior it is the vast majority of times."

As I've said 1000 times before, they need the liquidity that traders provide in order to offer the good prices and tight spreads on the exchange that people use betfair for. He's clealy admitting that they couldn't run the entire market on their own, so this idea that they will be 'closing' winning accounts (and thereby cutting their own PC revenues) and replacing them themselves is ridiculous. The USP of betfair is the better prices, so if they ever ditched the exchange and turned themselves into an inferior odds offering sportsbook just like the rest of them overnight they would lose most of their customers.

[74.5]

Good post Hgodden.

My take is this:

As betfair grew from its early beginnings,turnover increased as its popularity grew.Therefore,profits increased in line with their popularity.

Then,betfair hit a ceiling.There's only so many bets that can be matched on a race and so profits flattened.

betfair wanted to grow their profits so came up with PC. betfair calculated,quite rightly,that they would lose some customers but a trader needs liquidity and betfair provides that liquidity. So,betfair calculated,quite rightly,that the majority of traders would remain with betfair, PC or no PC.

betfair still want to grow profits - so now what?

Increase PC still further? If they do this,how many traders would leave betfair?There's only so much PC that a trader can take.Beyond that limit and it's off to big purple they go and it's gonna cost big blue plenty to get them back.

Oooo,I know,betfair offer fixed odds betting.That will increase turnover and profits.No?
74.5

[hgodden]

Yes, I just think they're plugging a gap. Like they say on some events there isn't the liquidity which means punters will take their money elsewhere. If betfair can keep them for those less liquid events with this new bookmaker thing then they're hoping the punters will be less likely to use other bookies for the more liquid events as well. It's probably a common 'concern' for punters that they can't get on easily on many illiquid events on betfair, so helping to keep these people on betfair can surely only be a smart move, as long as they handle the risk properly.

[74.5]

Hgodden
Spot on.Looks to me like betfair are trying to become a one-stop betting shop.Whatever type of bet a punter wants to place,betfair have a facility to allow them place it.
74.5

[Euler]

I'm curious about the sportsbook. I'm not convinced that Betfair are playing to their strengths by chasing margin and also introducing a sportsbook. Their biggest USP has always been the exchange mechanism, so by offering a sports book and all this other garbage it seems a bit backward. IMHO would less risky and cheaper for them to fill the gaps by incentivising market partipants to fill those gaps.

As it is Betfiar is becoming a beast, trying to address all things. I bet you they learn it's not as simple as just coming up with the idea to address it. They tried and failed with their high roller business, so the sports book will be interesting. It's difficult to figure out what impact it will have without knowing how it will be implemented. I've asked Betfair lots about the sportsbook but I don't really have much to share as Betfair didn't have much to share beyond what is publically available.

If you remember Betfair SP was going to be a killer product that transformed the exchange and encourage people to bet early into the quiet markets. Which is exacly what the sportsbook is now supposed to be addressing?!!??!

The biggest problem is 'Joe Punter' doesn't want the hassle of dealing with complicated procedures and so on. He just wants to shove his tenner on something. That is where traditional bookmakers win at the moment and I don't see that really changing much, subject to what we expect to see.