Smarkets Blog

Well it was one of the most memorable Premiership weekends I can remember, and with Man City v Liverpool sure to top it off nicely! Wigan received a spanking from Chelsea who have scored 6 goals in the last two games, Arsenal brought Blackpool back down to Earth with the second 6 – 0 victory of the weekend, and as if we hadn’t had enough goals, Newcastle added another 6 to the tally with an emphatic win at St James Park. Man Utd received a taste of their own medicine conceding a 90th minute goal, and with Chelsea in rampant form they will need to pull their socks up for the coming games if they want to keep up.

Overall even with a couple of unexpected results the Smarkets team did reasonable well. Only three members lost any money, Jason falling falling prey of placing all his eggs in the Man Utd basket. Daniel nearly broke even betting on a Draw in each game and could turn a profit if tonight’s game ends a draw, and Jamie came a cropper when neither his long shots or his safe bets came in.

Brad, Russ and Scott turned a small profit, with the Everton result and Aston Villa loss pulling profits down. I managed a reasonable +2.4 units considering a 4 unit loss on the Villa game, and hope the Reds can earn me a few more this evening.

However the winner by a far is Alex with his emotional hedge unfortunately coming off against the Hammers. His team may have lost, but at least he has undisputed bragging rights.

So in conclusion either bet against your team, or bet against West Ham!

I also wanted to mention something I observed watching one of the markets for these game.  When the prices for this competition were taken on Friday morning Newcastle were at 3.26. At kick off they were around 2.5, which is quite an extreme swing. Punters gave Newcastle a 30% chance of winning on Friday, yet by Sunday they were seen as 40% likely to win. The crowd moved for Newcastle, and they were right! Wisdom of crowds can be a very powerful prediction tool, especially when there are large swings towards an outcome in a short space of time.

The first thing I check when I notice a price swing like this is whether a piece of previously unknown information has now been factored into the new price, for example an injury. Though sometimes it can just be the increase volume of bettors placing bets before the game moving the price. They don’t necessarily know something no one else does, but just want to bet on their team or the favourite!

You can profit from these movements through a risk free trade (if you buy and sell at the correct points), or just get better value by timing the placement of your bet. Patterns can often be seen from 3 days before a game to kickoff, with one of the most commonly occurring the favourite shortening. This makes sense, as the event nears and more bets are placed they are generally placed on the favourite pushing prices down. So you often get the best price for a favourite on a Friday before the weekend. Though this can also be explained by the fact there is more time for something unexpected to happen the further you are from the game, so it is harder to accurately predict what will happen. So you are at risk if you place an early bet on say Man Utd, and Wayne Rooney catches the Flu last minute!

Whereas profiting from these movements is very difficult using a bookmaker, with betting exchanges you can, using techniques ranging from simple to very complex. This is one of so many advantages of a betting exchange!

Time for the next batch of Walkers Flavour Cup contenders to go head-to-head. Six flavours were rigorously tested at Smarkets towers, and this was the result:

A close run heat that one, but Argentinian Flame Grilled Steak takes the honours with +5.

Only three more flavours to test (Welsh Rarebit, Scottish Haggis & Irish Stew) and we’ll have a complete leaderboard. Check out the latest odds in our Flavour Cup market.

A nice piece here from Fox TV (never thought I’d say that) on the wisdom of crowds and how prediction markets function.

The John Stossel show covered a bunch of other aspects of the American gambling industry in this six part series, all of which can be found on on www.midasoracle.org.

Jason appeared at London start-up conference GeeknRolla this week. He gave some practical advice for prospective start-ups here are his slides and talk:

Plugg 2010

Hunter and I had a great time at Plugg meeting lots of other entrepreneurs from the Continent. It was our first time to Brussels. Definitely recommend trying some Belgian chocolate and chips! I attached a video showing Hunter’s two minute pitch below. He’s the first one of four in the clip. Can’t miss the moustache!

There have been some exciting developments in the online betting industry. It’s great to see more innovation coming to betting tapping into the tremendous market opportunity. Even though it’s worth an estimated $20 billion (and growing), most of the big online bookmakers offer the same boring products with no web 2.0 features that internet users have come to expect. The top three online betting companies are Betfair, Ladbrokes and William Hill.

Betable went live today with their pool betting product. Congratulations to the Betable team for launching! Betable has been under development in San Francisco for a year or so. Recently some of the team moved to London. It’s great to see other startups launching in the space. For those unfamiliar with pools, bettors put their money in a pot and the winners split the pot after commission (usually 10-20%). Pools have the advantage that participants don’t have consider the odds – the odds are computed after the betting has ended.

Pikum made waves when it launched a similar pool betting product two years ago. Pikum offered betting on football markets, but didn’t let participants create markets as you can on Betable. It ran out of money before it was able to gain any traction in the marketplace and folded a little less than a year after launching.

Bragster (formerly launched as Gottabet in 2008) aimed at mate to mate bets that users could create themselves. “I bet you £20 you can’t eat all the donuts”. They weren’t able to gain significant traction in bespoke bets, so they rebranded as Bragster to a social network centred around bragging rights. Not just a clever name! They were acquired last month by the Guinness Book of World Records.

Boolabus has taken an agency model and offer the big bookmakers (e.g. Ladbrokes) cool software that they can plug into their websites . Their focus has been largely what’s known as “in-play” betting – betting after the match has started. Even though the odds update in semi-real time, bookmakers still add quite a large profit market to their odds so the punter doesn’t get good value. The punter doesn’t have the option to lay a bet either.

Betfair pioneered the concept of betting marketplaces a decade ago. They have been building up their US presence after making the purchase of TVG, a horse racing TV network. Betfair is a fantastic product for the professional bettor, offering the best liquidity in the marketplace, but it has a high learning curve for the casual punter. Like the other major bookmakers, Betfair has almost no social features to speak of (although Betfair has a forum).

Smarkets is innovating betting marketplaces by bringing the power of exchanges to a wider audience. We’re creating a simpler user experience with a social layer. On Smarkets, the price of a bet changes in real-time. This type of market dynamic is perfect for live events. For example, betting on the cycling race where a crash could wipe out half the field or an election where a news story could decimate a candidates chances, Smarkets works very well. Also, Smarkets allows to participants to buy or sell an event at anytime up until the event has concluded.

We have a host of social betting features that we’ll be launching shortly. Our next major release includes the UK election markets. We’ve been hard at work at Smarkets for almost 3 years building a scalable and reliable technical architecture.

It’s great to see innovation coming to betting. Pikum and Gottabet failed, but the new crop of betting startups Smarkets, Boolabus and Betable are forging ahead in this massive industry begging for new blood.

We’re excited to announce we’ll be in Brussels presenting at the Plugg Start-Ups Rally. Plugg is a pan-European conference for startups organised by TechCrunch’s Robin Wauters.

Out of the 116 companies submitted, we made the Top 20 selection. The top three startups will appear in the finals to vie for the Plugg Start-Up of the Year Award. Check out the list of other start-ups.

We will be pitching to the esteemed jury and audience on Thursday March 11th. Check out the schedule and if you are going to attend, make sure you come and say hello.

Thank you very much to everyone who came Tuesday night! Hunter and I are very excited to release Smarkets, a simple and social way to bet, publicly for the first time. Smarkets is invite only at the moment. We will be sending out invite emails out over the next few weeks.

I’d also like to thank our co-sponsors of the evening, CSB Group. CSB has been instrumental in helping us get our company incorporated and applying for our gaming license in Malta

Other coverage:
Techfluff.tv and Russ’s Flickr set.

Ed Stone

Originally uploaded by intranation

Smarkets continues to grow! I am pleased to announce that Ed Stone [Twitter] will be joining our team. Ed has been involved in the web industry for over ten years working as a developer and later manager. He brings a wealth of web expertise to Smarkets and has worked in both London and Syndey.

Prior to Smarkets, Ed was the Web Development Manager for Yahoo! Search Europe, and then Project Director at Squiz UK, introducing them to web standards and progressive enhancement. I am really happy Ed has decided to make Smarkets his new home!

Smarkets is proud to announce the addition of Russ Garrett [russ.garrett.co.uk / Twitter] to our team. He brings an extensive amount of web experience to Smarkets and will head up our technical operations.

Russ loves working at startups. Prior to Smarkets, Russ was one of the first employees at Last.fm (via Audioscrobbler). He worked as System Architect for the past six years growing it from a small project to the top streaming music website that it is today. Russ also started the Hackspace Foundation which provides a collaborative environment for people to work on technology.

I am really excited that Russ is joining us. He’s one of the best in the business and will play a key role in helping Smarkets scale as we grow.