Betfair's biggest gamble
Having been on Betfair since it started I've watched Betfair grow from a baby into a sprawling corporate beast.
Back in the early days of Betfair, not much happened and it was only the arrival of liquidity that attracted the big betting whales to the markets, with both those things in place a virtuous cycle began. Volume created volume and Betfair grew and grew. Based on the original structure of Betfair, during my public talks I positioned them as a new kind of risk market and one that could conceivably dominate traditional risk exchanges. It looks like that cycle and the concept has now been broken.
A fully functioning market is more akin to an ecosystem and requires many types of users. Up and down the food chain there is a complex interaction of types. All participants, whether they accept it or not, are interdependent on each other. Break that chain anywhere and you immediately have problems for everybody.
I've been told directly by Betfair that they have carefully worked out who will be affected. They may have worked out who will be affected by the charge but I am not convinced they have worked out the wider impact on the ecosystem they created. Changes may not happen instantly but I am certain that, given such a shock to the system, the market will change. People who lose up to 22.5% of their profits are not going to sit idle. One of the benefits Bet Angel users have is that I will hurt as much as anybody, so we have many incentives not to sit idle.
On a wider point, the mere fact that Betfair have changed tack will ensure that more trust is lost with customers. This means people will change behaviour regardless of whether any particular customer is affected directly or not.
In the short term and while other moves are afoot, lets look on the bright side. If you are affected by the change then you are doing incredibly well. Judging by my inbox Bet Angel users are doing incredibly well. Well done.
Overall my view is that, quite appropriately for a gambling company, Betfair have taken an absolutely massive gamble.
Back in the early days of Betfair, not much happened and it was only the arrival of liquidity that attracted the big betting whales to the markets, with both those things in place a virtuous cycle began. Volume created volume and Betfair grew and grew. Based on the original structure of Betfair, during my public talks I positioned them as a new kind of risk market and one that could conceivably dominate traditional risk exchanges. It looks like that cycle and the concept has now been broken.
A fully functioning market is more akin to an ecosystem and requires many types of users. Up and down the food chain there is a complex interaction of types. All participants, whether they accept it or not, are interdependent on each other. Break that chain anywhere and you immediately have problems for everybody.
I've been told directly by Betfair that they have carefully worked out who will be affected. They may have worked out who will be affected by the charge but I am not convinced they have worked out the wider impact on the ecosystem they created. Changes may not happen instantly but I am certain that, given such a shock to the system, the market will change. People who lose up to 22.5% of their profits are not going to sit idle. One of the benefits Bet Angel users have is that I will hurt as much as anybody, so we have many incentives not to sit idle.
On a wider point, the mere fact that Betfair have changed tack will ensure that more trust is lost with customers. This means people will change behaviour regardless of whether any particular customer is affected directly or not.
In the short term and while other moves are afoot, lets look on the bright side. If you are affected by the change then you are doing incredibly well. Judging by my inbox Bet Angel users are doing incredibly well. Well done.
Overall my view is that, quite appropriately for a gambling company, Betfair have taken an absolutely massive gamble.
posted by Peter Webb at
3:25 AM
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