Betfair to exit Australia

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andyfuller
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Looks like Betfair are exiting Oz...

Crown's move on Betfair shortens odds on James Packer wagering play

http://www.theage.com.au/business/crown ... 3506r.html

Thanks to Scott Ferguson for the link via Twitter.

(Excuse the double post - also posted in the BF Float thread in Financials but as some may not read that I thought I would post it here as well)
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LeTiss
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What does that mean, Andy?

Are Crown aiming to become an Australian exchange operator, or are our Aussie traders up shit street?
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Euler
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I noticed on the conference call they ducked questions on Australia, I'll find the clip.

One of the reasons Aussie isn't viable is that, I'm sure this is still the case, they recognise PC and other revenues in the UK even if you trade in Australian markets. So that distorts it a lot.

If they added that back into the mix it would still make sense. If they torpedo Aus then really they end up as a niche place without global presence and surely that is a major issue long term. Surely somebody will step in to pick up business on the exchange side of things.
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Euler
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LeTiss 4pm wrote:What does that mean, Andy?

Are Crown aiming to become an Australian exchange operator, or are our Aussie traders up shit street?
Newsbod wrote:This would give Crown the power to change Betfair's business model and push into the lucrative fixed odds segment.
andyfuller
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I don't think it is clear - your interpretation is as good as mine.

I see it as Betfair exiting and no longer operating there and attempting to recover some of the losses they have suffered. The Legal fees alone must be HUGE over the years! But it does seem odd that they spent all that time, effort and money fighting in Oz only to leave now it has finally come good.

I then see Crown looking to use the licence as a way of offering fixed odds and ditching the exchange, though depending on the deal that could be a lot of value in the exchange technology. I don't see why they would want to keep the exchange though if it is making such big losses? The value would seem to me to be in the licence.

Though I have let my knowledge of the Oz market go over the last few years so there will be others far better placed to comment and offer a view on what is happening.
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Euler
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LeTiss
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Q1) Will this mean an end to Aussie Wallets

Q2) Does this leave Aussie Traders out in the cold....will they be blocked from using the BF exchange

Q3) Will UK traders notice any difference to the current exchange model?
andyfuller
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I think only time will tell on those questions if the deal goes ahead.

They didn't even acknowledge the Oz question did they? The person asking the question didn't bother following it up, so why ask in the first place!?
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gazuty
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The legal issues for those of us out here will probably (not definitely but probably) mean we end up with an account with betfair Australia only, which will be rebranded "crown" or some derivative thereof.

We won't have a "main wallet" anymore and won't be able to sign up with betfair UK, because it won't have an Australian licence and it's deal on exit with crown will probably make it keep off the grass down here.

In Australia crown will no doubt turn off the exchange and be another fixed odds bucket shop with a 120% overround. Happy days. Not.
hhh
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Understand Packer and Crown may squeeze every cent however if anyone could take on the TABs I assume him and his posse would be in a better position than most. Lets just hope he keeps Miranda away from the exchange or liquidity will be sucked up pretty quick :o

Assume this notion of Betfair leaving is also a sign that online inplay betting legislation is not going to change soon either.

Anyone have a view on why Betfair would not replicate their UK model and slap a "sports book" on the front of the exchange? Licencing issues or lack of sack? Without knowing the drivers & detail, it appears as though they have already done most of the hard yards?

The "cash out" and "price rush" features (by phone :roll:) would have been a game changer to mugs down here. Betfair Aus have missed out big time to date, by having no educational marketing - they rely solely on brand & above the line marketing campaigns which was never going to work.

In regards to Ladbrokes timing in acquiring an Australian licence - could this mean the return of betdaq? Previously, I could not sign up to betdaq, however recently found out I could (from NZ). I was redirected to Betdaq.com rather than .co.uk

Speculation and all, hopefully it is not end of days from a trading perspective. I may just have to get a UK visa...
Last edited by hhh on Tue Mar 18, 2014 10:39 pm, edited 4 times in total.
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Naffman
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Very disappointing to hear. It is only the authors view that Crown want to move into the fixed odds market, or have I read it wrong? I know on many horse racing punting forums that Betfair is far more popular than the corporates, so changing their model into an already over-crowded market seems strange when they have a great differentiated product.
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gazuty
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Naffman wrote:Very disappointing to hear. It is only the authors view that Crown want to move into the fixed odds market, or have I read it wrong? I know on many horse racing punting forums that Betfair is far more popular than the corporates, so changing their model into an already over-crowded market seems strange when they have a great differentiated product.
I agree all very disappointing. Naff I know you have been building up on Australia racing - well done - so don't take what the journo says as gospel. What does strike me though is how does the exchange continue? I assume the ip/ architecture etc is betfair UK property. Perhaps they just licence it to crown who continues to run it? Who knows.

But I just take a bad vibe. I've got some positions in long term markets, that I will exit at a bit of loss, rather than have betfair say - oh we are shutting down and your open position on AFL, NRL etc will be settled in 6 months, but no more bets please - so that massive red on one team will certainly come through on Sod's law. Better for me to get out now, because otherwise they announce one week to go and it's a mad scramble to hedge and prices go crazy. Basically who knows what they do on long run markets - uncertainty is not my friend in this case.

I'm going to go and get a coffee and do a lap of the park. I'm pretty upset, yes I'm buying the rumour and should wait for the facts ..... Cold shower time.
burdo77
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Is there a possability that another exchange may pop up in Australia to fill the void if crown chooses to ditch the exchange?
jmcole
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I am getting the same vibe Gazuty and fear that the days of being able to access an exchange in Australia may be numbered. They haven't done any promotion of the exchange for over 12 months. Whilst in the past they promoted the exchange as a point of difference, most advertisements now relate to their Best of 4/5 tote product or a 25% multi bonus on sport.

Naffman, I too am bewildered that you would abandon a unique product to become another corporate bookmaker. I suspect that the bottom line will be the deciding factor. Some of the so called bookmakers will also be concerned at losing the exchange as a few of them are just parasites running software to offer prices below Betfair's.

Matthew Tripp is about to renter the market.
http://www.smh.com.au/business/sportsbe ... 347hi.html

He was interviewed on radio last week and suggested that he thought Betfair were doing the right thing in going down the fixed odds/best tote path.

My take is that most participants think Betfair is the best product, but there would appear to be greater profits in the fixed odds model and that is what companies are driven by.
jmcole
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Is there a possability that another exchange may pop up in Australia to fill the void if crown chooses to ditch the exchange?
Tabcorp have the licence to operate an exchange in Victoria. I wouldn't expect them to be starting one any time soon as that is more about ensuring no one else can start one than them having any interest in it.
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