Smarkets's skullduggery
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Those new limits would catch just about every horse race trader when you consider there's around 800 races a month so just one closed bet per market would force you into the new tier.
So not only do smarkets not have an open API they're now charging to place losing bets also I'm actually surprised they reckon it's only hit 0.2% of their current users as the limits aren't particularly high. On one hand they talk about attracting market makers yet the new charges seem to be introduced to limit anyone new entering their market place to compete against the current MM's with API accesswho simply get charged 20% of pnl.
From the FAQ it applies where "more than 1500 bets or stake more than £1m in a calendar month"
Applies to placing of bets "whether they are unmatched, partially matched or fully matched" - so cancels / scratches all count and incur commission it seems.
Guessing that many on here would easily break the number of bets limit
Applies to placing of bets "whether they are unmatched, partially matched or fully matched" - so cancels / scratches all count and incur commission it seems.
Guessing that many on here would easily break the number of bets limit
about 2 weeks ago Peter did over 1/2million in matched bets on a Saturday afternoonfoxwood wrote: ↑Mon Nov 12, 2018 6:44 pmFrom the FAQ it applies where "more than 1500 bets or stake more than £1m in a calendar month"
Applies to placing of bets "whether they are unmatched, partially matched or fully matched" - so cancels / scratches all count and incur commission it seems.
Guessing that many on here would easily break the number of bets limit
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The fact it applies to unmatched bets is one way of protecting their current market makers from any competition so few people will litter a market with prices other than their own market making operations.
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Does seem a backward step, Betfair can handle 1000 bets an hour from their customers without additional charges whereas smarkets appear to be struggling if an estimated 0.2% of their customer base place over 1500 bets a month.
It's interesting to see the industry head in this direction.
I sort of get the feeling that the PC pushed the customers that Betfair didn't want to other exchanges and now they don't want them either.
There does appear to be a gap in the market for a pure free flowing exchange.
I sort of get the feeling that the PC pushed the customers that Betfair didn't want to other exchanges and now they don't want them either.
There does appear to be a gap in the market for a pure free flowing exchange.
Providing liquidity in sports is very difficult. We, for example, market make 50k-100k contracts concurrently 24 hours a day on multiple different exchanges. There's a principle in market making called adverse selection (https://en.wikipedia.org/wiki/Adverse_selection), which says for all things being equal, you're more likely to get filled when you're wrong than when you're right. Adverse selection happens in all financial markets but it's particularly acute in sports. Think goals, team sheets, red cards, inclement weather, etc, etc. This makes sports market making extra difficult. To put this into perspective, we have many, many positive six figure customers and even a trader over seven figures.Euler wrote: ↑Mon Nov 12, 2018 8:10 pmIt's interesting to see the industry head in this direction.
I sort of get the feeling that the PC pushed the customers that Betfair didn't want to other exchanges and now they don't want them either.
There does appear to be a gap in the market for a pure free flowing exchange.
This pro tier commission structure tries to find the right balance between power users that aren't market making and market making. If you are making prices, we'll happily switch you to a market maker friendly tier.
A "pure" exchange isn't possible, at least, not until the exchange market is an order of magnitude bigger. There's not enough retail flow with the exchanges that would make a betting exchange akin to a stock market. We're hoping to change that with SBK, but we'll see.
For a new pure exchange to exist, you would need market makers, of which there are very few. There are so few that we now think we're the largest sports market maker in the world. The Betfair exchange will work to a point b/c they have a good amount of synthetic market making with customers and some market makers, but you've already seen those markets continue to get softer as we take the exchange retail flow away from them.
I'd be happy to do a podcast on this...
In essence, I think that's probably the most eloquent explanation I've seen of why the PC or similar exists. I've struggled to put it into context, but that actually does it quite well.vide0star wrote: ↑Tue Nov 13, 2018 11:03 pmThere's a principle in market making called adverse selection (https://en.wikipedia.org/wiki/Adverse_selection), which says for all things being equal, you're more likely to get filled when you're wrong than when you're right. Adverse selection happens in all financial markets but it's particularly acute in sports. Think goals, team sheets, red cards, inclement weather, etc, etc. This makes sports market making extra difficult.
The problem I have with Betfair's implementation is that they must know that I offer most of the time in the markets, but I get treated like a Viking warrior who is out to rape and pillage. Contrast that with Betdaq who have done everything possible to encourage me to be active. It just feels like Betfair have let their corporate objective overcome their objectivity.
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That's a very good point, Jason.
Which brings me to the question: why is that? Do you reckon it's because many countries (e.g. Italy) won't let an exchange operate so this limits the number of potential market participants? I reckon that's a big factor, but also because all existing betting exchanges:
- Do a poor job of educating people on how they can trade sports like they trade stocks/futures markets
- Dilute the exchange product and confuse people by introducing a bookmaker under the same brand
- Have poorly designed websites that make sense only to geeks
Perhaps the way forward is to build a sports betting exchange website the same way Digitex are building their futures trading platform:
- Ladder interface built into the browser
- Decent charts built into the browser
- Zero or very low commissions
- Trade using tokens which user can exchange for real money
- Use smart contracts to manage funds
- Great marketing, modern simple video teasers
- Fuck KYC, make it extremely simple for people to register and start trading
- Only implement KYC if you are forced to later on (by which time you will hopefully have generated enough hype)
Digitex sold $5m worth of tokens in 17 minutes, this shows that there's big interest on a proper exchange platform and I bet there would be even more if it were to be a sport betting exchange one.
The potential is there. What do you think?