Smarkets begins closing successful accounts

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james19
Posts: 53
Joined: Thu Dec 13, 2012 7:30 pm

Just to report that the online betting exchange Smarkets.com now appears to be discriminately closing winning player accounts.

Through lengthy and strained discussions with management I have learned that the site is almost exclusively dependent on three external market makers, and these market makers are seemingly able to put pressure on management to terminate accounts that are not profitable to them. Management is frightened that these market makers could pull out leaving them with very little liquidity, and so is willing to do everything it can to appease them. In my personal experience I estimate to have won £20,000 at Smarkets over a six month period, however as of two days ago my account was closed by management against my wishes, with my balance expediently returned to me in full. I believe I am the first client to be excluded for winning too much, and have reiterated to company CEO Jason Trost that this move sets and dangerous precedent for their exchange, and raises serious questions about conflict of interest, and long term sustainability. I envisage that the number of excluded clients will only increase exponentially as time moves forward, and strongly urge management to rethink this highly questionable decision. Obviously the best solution would be for the market makers to evolve around market forces instead of artificially stifling them, or for them to reduce their exposure to a level at which they are comfortable losing. Kicking out winning players is definitely not the answer given the nature of the business model.

The Lotteries and Gaming Authority (Malta) and SBR have been informed and are investigating the case.
haichless
Posts: 125
Joined: Tue Jul 17, 2012 5:04 pm

James
An interesting post! I looked at smarkets some months ago and decided against commiting time and energy their.
What markets were you trading in? If I recall the slower moving markets in play, just matched Betfair anyway.
I'd like to hear what was the attraction, because obviously I didnt spot it.
Also its an odd move for exchanges to ban the small percentage of wining players, because they make up a disproportionate amount of the liquidity apart from the paid market makers?
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LeTiss
Posts: 5386
Joined: Fri May 08, 2009 6:04 pm

That's a very interesting post

The guys from Smarkets have been very quick to respond to threads with references to Smarkets, so I'd love to hear them explain this one away....don't hold your breath

Smarkets are doomed if this is their gameplan
sweetybt
Posts: 500
Joined: Sat Apr 18, 2009 4:35 pm

We need one exchange per sport , which is pure, fair and regulated.

More than one exchange per market won't work.
smarkets
Posts: 18
Joined: Tue Nov 16, 2010 11:23 am

I can't comment on or confirm the specifics of James19's case since I don't have permission from him to do so.

We have no policy of closing "successful" accounts. For what it's worth,£20k P&L is not in the top 10.

I'm all for transparency but don't want to get into trouble for over posting on BetAngel. Let me know if you guys have specific questions.

Jason
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mugsgame
Posts: 1235
Joined: Wed Mar 25, 2009 11:41 pm

James - give him permission
We can't wait to hear this!

And while your at it, an explanation why this is your first post would be great too. You joined yesterday. Are you a long term BA user? Did you join the forum especially to warn us about this? You obviously (and quiet rightly) have an axe to grind.

I think I speak for many when I say we would like to see the facts, so we can make up our own minds about what has gone on here.

Look on the bright side. They have closed you down and give you your money. Other well known exchanges do the same and keep your money, under some BS clause. :D
andyfuller
Posts: 4619
Joined: Wed Mar 25, 2009 12:23 pm

Smarkets have come out saying they don't close successful accounts and as such there has to be more to this story than the simple case of he has been shut down for being profitable.
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mugsgame
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Joined: Wed Mar 25, 2009 11:41 pm

andyfuller wrote:Smarkets have come out saying they don't close successful accounts and as such there has to be more to this story than the simple case of he has been shut down for being profitable.
Isn't that what Betfair go around saying? There is more than one way to skin a cat.

Lets here the facts please.
andyfuller
Posts: 4619
Joined: Wed Mar 25, 2009 12:23 pm

Agree about hearing the facts but I haven't heard of Betfair closing profitable accounts, have you heard of cases?
BackHighLayLow
Posts: 29
Joined: Sat Apr 18, 2009 1:30 pm

andyfuller wrote:Agree about hearing the facts but I haven't heard of Betfair closing profitable accounts, have you heard of cases?
Yes, they were ringing people & threatened to suspend / close traders accounts just after they had their asses kicked in the Oz courts over the race fields thing.
andyfuller
Posts: 4619
Joined: Wed Mar 25, 2009 12:23 pm

I had forgotten about that but did they also do the same to people who weren't making a profit but were costing Betfair money?

Was the issue with Australia not that they were closing profitable accounts for being in profit but because they were costing Betfair money which is a different thing.
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Euler
Posts: 24700
Joined: Wed Nov 10, 2010 1:39 pm
Location: Bet Angel HQ

When I got the phone call, it was quite revealing. Because I was questioning the decision I seemed to get information that maybe he shouldn't have said.

At the end of the day we don't know the circumstances behind it, so it's impossible to comment. But there are a number of players on various exchanges that suck money out of the system for no net gain to the system. Betfair were just very brazen and haphazard about people they 'didn't want' and poorly targeted them as well.
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LeTiss
Posts: 5386
Joined: Fri May 08, 2009 6:04 pm

I admire somebody from Smarkets having responded, but I'd like to know what the exceptional circumstances are with regards to this account!

I know this is proving to be a harder slog than they imagined, but if they are dancing to certain market makers tunes, then that is an absolutely catastrophic decision
corbus
Posts: 149
Joined: Mon Aug 10, 2009 10:27 am

Although I don't understand why an exchange would be bothered about who wins and who loses... Casinos obviously are worried about that because a player plays against the house, but an exchange always wins from any money being matched... so why should Betfair throw me out if I won 100,000 a month? I'd be one that generates a lot of business for them and they'd earn 5000 from my work.
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Euler
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I can see situations where market makers could easily get shafted.

Say you are a yard about to have a gamble on a horse. You know that but the market doesn't. If you can get some early money on they you really could get a meaty price before the price starts to move. You can hold the position or trade out for a big profit later if you can get some fool to give you a meaty early price.

That is why decent liquidity only arrives late on a horse race.
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