Smarkets public API

[Euler]

Jason, you are welcome to answer those questions put to you here. From a community perspective, we don't want the forum to be used as a place to advertise or promote services, especially if others are already being well funded to promote.

As you know, I have been in touch with smarkets, but my daughter is currently in hospital so not top of the list at the moment.

I have to drive our workload on our own timelines to have any chance of keeping on top of things, so new stuff will always be second to that. We get about a dozen queries a week about promoting other things, but we are really focused on helping existing paying customers first so that will always take priority.

[vide0star]

Thanks Euler. You've been a tireless champion of exchanges and I've been following BetAngel for a decade now. I totally understand your point of view and I'm sorry to hear about your daughter. I will stick to answering the above questions and not promote the company.

1. Do Smarkets trade their own markets or have plans to? By that I mean have internal or external trading teams or automated systems (such as cross-matching) that have preferential trading terms (be it latency, commission structure, or anything else)?

Yes, we do trade our own markets through a subsidiary called Hanson. Hanson pays commission the same as everybody else. We treat Hanson as arms length as possible. Adding liquidity to a challenger exchange is no small task and Hanson is solely designed to do just that.

It's important to note that Hanson trades on other exchanges as well as Smarkets has other institutional API partners that provide liquidity.

2. Do Smarkets see their 2% commission structure as sustainable in the long term? In other words, is it currently being used as a tool for growing market share but likely to be raised later if Smarkets get bigger? Or is it a sustainable fee which allows Smarkets to profit sufficiently in the long term?

Yes, and we hope to decrease it in the future. We're pretty open about our numbers and publish our annual report if you want more revenue information and we've been profitable for the last three years.

3. Do Smarkets ever plan to penalise winners with higher fees like Betfair's Premium Charge? Please would you expand on your answer giving your opinion on such charges.

I think the BF premium charge started off as not a horrible idea but was poorly executed. I understand why they did it, but I think we've seen the BF liquidity plateau since the implementation of the premium charge. I think it makes sense for some users to pay increased commissions, but in general, transaction fees historically in all exchanges trend towards zero, not the other way around. So while 'winners' should pay something more, in general fees should asymptotically approach zero.

4. Do Smarkets have internal policies preventing employees from viewing customer trading data/history unless where specifically required by the customer?

Yes

5. Are Smarkets investing in the technology of the exchange, and what are the next big releases/innovations to expect? Will the streaming API eventually be made available to everyone? (I see streaming as a competitive advantage, so it would effectively be a 'Yes' to question 1 if it's not made available publicly).

Everyday. It might be hard to see on the surface but we ship new code almost every day. We've done nothing but try to make our tech better and better. For the API, we're trying to prioritise market makers (they're aren't huge amounts of them) before we open it up further. We have a few on board now and are currently integrating the next batch.

[northbound]

Thanks for clarifying those points and thanks to Euler for allowing it.

A couple more questions, if I may ask...

For the API, we're trying to prioritise market makers (they're aren't huge amounts of them) before we open it up further.

Why?

Also, assuming that...

- your goal is to attract plenty of regular expert traders from Betfair in order to become the number one exchange

- these traders wouldn’t move to a platform with less liquidity

- they wouldn’t move to a platform that doesn’t offer an API and one-click software

... would you be prepared to open the API to everyone soon and also stomach a phase in which your market makers lose money to regular traders that just moved to your platform?

[Naffman]

Just had a browse of the horse racing markets and there's more liquidity on Smarkets than Betfair and the prices are the same

So if you're a gambler you should definitely be using them but trading is still a long way off yet.

Do you have any plans for a take SP and a minimum SP feature like BF do? I'd transfer all my SP stuff to you guys in an instant (2% versus 20+%). Betdaq unfortunately don't do minimum SP for those wondering why I don't go there.

[vide0star]

Thanks for clarifying those points and thanks to Euler for allowing it.

A couple more questions, if I may ask...

For the API, we're trying to prioritise market makers (they're aren't huge amounts of them) before we open it up further.

Why?

It's the easier way to build the ecosystem by having as many broad-based market makers as possible. Most traders (including BetAngel customers I assume) are liquidity takers. We need liquidity providers before liquidity takers. Now, it could be possible that BA traders leave bids/offers up but from the evidence I've seen, only institutional liquidity providers will add liquidity on a meaningful scale.

Keep in mind we're trying trying to open up the API asap. Yes, it will be normal for market makers to have to adjust as you add different types of bettors onto the platform.

[vide0star]

Do you have any plans for a take SP and a minimum SP feature like BF do? I'd transfer all my SP stuff to you guys in an instant (2% versus 20+%). Betdaq unfortunately don't do minimum SP for those wondering why I don't go there.

It's funny you mention that b/c personally I'm not a big fan of SP. We've been having an internal debate about it. Why do you find it useful?

[Naffman]

Allows you to 'set and forget' when you have other things to do i.e. trading, work etc.

The last thing I want to do when I'm out or trading is worry if my bets have actually got matched or not.

[Naffman]

Also hard to edit bets, can't find another way but have to cancel it then place another bet, bit of a hassle!

[armadillo]

What's Smarkets thoughts about Betfair running 2% commission promotions? Clearly Betfair are trying to win back Smarkets customers...

[Tobedotty]

Have you considered adding a book-or-cancel order type to the Smarkets API? You could control liquidity takers by requiring a certain amount of volume executed via book-or-cancel.
Just 2 cents from someone with decent experience with financial exchanges...

[Naffman]

BF £477k vs Smarkets £208k at official off time - how does Smarkets calculate liquidity?

[spreadbetting]

Who knows, doesn't appear to be shown anywhere on their website, which looks like some throwback to the early days of the internet Surprised they haven't got any flashing gifs on there tbh.

If you've got an account you could match a bet on a quiet market and see how they calculate the liquidity, I'd guess it'll be the same as Betdaq to inflate the figures.

[Naffman]

Tbf they were so quick to reply but here's how they do it

Backers stake + layers liability

So if I have £100 on at 4.0 then liquidity will be 100+300 = 400

Similar to Betdaq I think

[spreadbetting]

Think Betdaq just do the layers liability, pity they're not as quck opening the public API that's been due since around 2010

[Naffman]

Think Betdaq just do the layers liability, pity they're not as quck opening the public API that's been due since around 2010