March 24, 2011
As you can see, when you open the betting window you can now toggle between ‘stake’ and ‘backer stake’ and your liability is shown in the same window.
You can set ‘backer stake’ to appear by default in your account settings but if you have any questions (and more feature requests) get in touch.
December 20, 2010
Every year it’s the same. Snow hits Britain, and suddenly the papers are full of stories about bookies slashing their odds on a White Christmas. It’s sometimes easy to forget that the odds remain heavily stacked in the bookies’ favour.
The definition of a White Christmas specifies that snow must fall at a certain location on the day in order for it to be valid. This means that even with this week’s cold weather a White Christmas remains unlikely. In 7 of the last 10 years the bookies have dramatically announced the slashing of their odds in the run up to Christmas. However, London has not seen a white Christmas since 1999, and technically across the UK there have only been 4 White Christmases in the last 10 years.
You wouldn’t get that impression from looking at the prices of the major bookmakers, who have this year slashed their odds to some of the shortest (and therefore of the worst value) ever:
|Compared to Smarkets||3.35|
At Smarkets, you can get odds which closer reflect the true probability of a White Christmas. The competitive nature of a betting exchange forces our prices to be more efficient, and therefore give better value to smart punters. Next time you read a headline about a bookie predicting a White Christmas, its perhaps best to take their odds with a pinch of salt and find out the real probability on Smarkets.
November 30, 2010
The BBC have now released their top-10 shortlist for the BBC Sports Personality of the Year. The competition has been particularly tough this year after a stellar year for British sportsmen and women, who have managed to reach some of the highest levels in competitive sport.
Favourite to win is jump jockey AP McCoy. With a string of titles to his name, this year he managed to ride to victory in April’s Grand National. McCoy’s victory was impressive, riding Don’t Push It to victory five lengths ahead of his nearest competitor. McCoy’s odds of winning the competition are currently at 52.5% (1.9).
Golfer Graeme McDowell is also considered a serious contender. During the Ryder cup in October, McDowell’s win against Hunter Mahan was crucial in allowing team Europe gain the final point and win the cup. Available at odds of (15.1%) 6.62, he may be well worth a punt.
Fellow Ryder-cup teammate and World Golf number 1, Lee Westwood could also be in with a chance. Though he hasn’t yet won a championship, his constant high standard of play has been impressive, and his odds to win the contest are currently at 9% (11.62)
Its also worth keeping an eye too on Jessica Ennis, David Haye and Tom Daley, all of whom have been tipped for the prize. Check out our full odds in our dedicated market.
October 6, 2010
Trading on a betting exchange can be a complicated thing, so we’ve collated a vast amount of our betting and market trading knowledge and put it all together in the Smarkets Academy for your reading pleasure.
Whether you’re new to market trading and want to know about odds and risk management, or if you’re a little more advanced and looking for hedging and bookie bonus arbitrage tips, the Smarkets Academy should be able to answer your questions.
We’ll be adding content (and a search box) as we write it, but if you want something covered just let us know.
September 28, 2010
This morning’s papers were full of speculation that following Ed Miliband’s shock victory in the Labour Leadership race on Saturday, his brother might quit front-line politics altogether. With the deadline for Shadow Cabinet nominations at 5pm tomorrow, time is quickly running out for David Miliband to declare his intention to stand.
However, is David, who has called for “no more cliques, no more factions, no more soap opera”, really preparing to abandon his party?
Smarkets punters currently appear to think so, with the odds of David Miliband not standing in the Shadow Cabinet Elections at 66%. I suspect it’s going to be an interesting market to watch over the next 24 hours.
September 23, 2010
N.B. The following piece was penned for the FT Alphablog. You can find a link here.
At long last, Betfair is IPOing. This means they won’t be talking for a while – they’re undoubtedly going through the standard quiet period – but as someone who’s been following them for years, I thought I’d lend my thoughts.
Betfair was founded 10 years ago at the height of the dotcom boom by an investment banker and a professional gambler. They were the first company to coalesce the idea of backing as well as laying horses in one marketplace — Microsoft Access powered, no less. They merged a year later with a similiar peer to peer betting site called Flutter which was founded by some Americans, and Betfair was off to the races growing at an amazing pace.
The Betfair IPO is great validation of the UK tech scene. Joining the ranks of MySQL, Skype, QXL and ARM, Betfair shows that Europe produces billion dollar tech companies. There is much to celebrate about Betfair coming to market, and it is also validation that great billion dollar companies can come from the betting industry.
There have been a lot articles about the IPO itself, but since the betting industry tends not to be very transparent or well understood, I thought I’d highlight the top risks and strengths in my opinion of the Betfair IPO.
- Strong revenue growth: Betfair is a revenue generating machine, pure and simple. Their latest reported figure was £340 million in revenue with a profit of £17.8 million. Their revenues have been increasing around 20-30% a year since they were founded.
- Global presence: Betfair has offices in the UK, Malta, Australia, USA and Romania and customers from many, many more countries. This will give them stability as the legal status of betting changes in different countries and decreases the risk of Betfair. Betfair pulled out of France because of its disadvantageous licensing structure.
- Large user base: They have three million accounts. While this is a lot less than Facebook or LinkedIn, it’s a user base that has cash and spends lots of it. The lifetime value of a betting customer can be anywhere from hundreds of pounds to several thousand pounds.
- Product/market fit: Betfair is a platform for everyone: casual punters, large betting syndicates, bookmakers, hedgers and traders. It works well combining the needs of different customers into one website which drives Betfair’s substantial liquidity.
- Diversified revenue stream: Betfair’s dependency on horse racing and sports betting revenues has been lessened by offering poker, casino and arcarde products. Standard betting accounts for roughly two thirds of the company’s revenue.
- Transparency: One of the things I’ve always admired about Betfair is their stance on transparency and licensing. Betfair has only taken customers from countries that allow online betting. Most other betting companies don’t go down this path. I think this corporate value will serve them well in the future.
- US market: There are a lot of signs from Congressman Barney Frank and others that point to the US liberalising its stance on online gambling. This will be a boon for companies like Betfair, who are well positioned to take advantage of the change.
As you can see the bankers will have an easy time selling the strengths of this tech giant. However, there are key risks, which haven’t been discussed in as much detail.
- Slow innovation: Aside from a few cosmetic tweaks, reliability improvements and the Starting Price feature, Betfair hasn’t innovated much over the last few years. For a company that boasts several hundred developers, it should be able to release more major new features. Betfair gets very little traffic from organic search and has no social features apart from a forum.
- Tax on top traders: About a year ago Betfair introduced a “Premium Charge” on their most successful traders, taxing their profits up to 20%. This runs contrary to typical volume rebate schemes where the more one trades, the smaller the transaction costs one incurs. The company claims the tax is to offset the cost of bringing new punters to the platform, but appears to outsiders as a clear move to increase revenue taking advantage of Betfair’s position as a monopoly.
- Expensive transaction costs: Betfair takes 5% of traders’ winnings. If a trader bets £100 and wins £1000, Betfair will charge £50 for the transaction. This is very expensive in a world of $8 online stock executions. As betting exchanges become more financial in nature, these transaction costs will shrink substantially.
- Market Size and Competition: As Greg Wood from the Guardian wrote recently, horse racing liquidity has hit a ceiling. Will Betfair be able to maintain the revenue growth? With high costs and a smaller profit margin than Paddy Power, Betfair has found itself in a bit of “grow or die” situation. It will need to find ways to entice more customers to join its platform and spend their betting dollars with them. Betfair is looking to new sports – particularly football – and overseas markets like the US, China and India as opportunities for growth.
- Headcount: Betfair has a tech team close to 500 people. While there is strength in numbers at times, the most successful tech projects in history started with small, nimble teams. The more tech people involved on a product, the less agile a company can be. Adapting to changing tech trends can be a crucial ingredient to remaining competitive in today’s internet startup world.
The impending Betfair IPO is an exciting time for the betting industry, the UK tech scene and for the founders Ed Wray and Andrew Black. They have been truly disruptive in an old industry. It’s something to celebrate and my hat is off to them for building a valuable company.
April 13, 2010
We let you bet with the odds style of your choice (decimal, fractional, american or percentages) but we set the default display as percentages. The problem is that matching odds between these different display types can lead to some pretty strange percentage odds (such as 17.25%) which were impossible to match with our old slider interface.
In order to make each betting style fair we’ve updated the percentage betting interface. Dragging the slider still jumps in whole numbers but we’ve added an input box next to the slider so you can type in a fraction of a percentage.
We are thinking of changing our default display to a different style, and I’d be interested to hear what you think.
February 19, 2010
We’re pretty sure this is a industry first: Smarkets now allows you to set your own odds in the format of your choice.
There are very few betting exchanges, and the ones that we know of only allow you to bet with their house format. Betfair, for example, only allows you to use decimals. We’ve now released an update which allows you to trade using either percentages, decimals, American style or fractions.
This has been a big piece of work which involved changes across our entire system. We’ve not only updated the event and list pages, we’ve also updated the betting interface to make betting with each system as simple as possible.
Percentages still has the slider (but a better looking one!), fractions has drop down menus for each value, we’ve created a custom input box for decimal (for users familiar with the Betfair interface) and American has an input box. You can switch between formats with the ‘odds’ link at the top of every page.
February 3, 2010
Ever wondered what the difference was between a high-street bookmaker and a betting exchange? This video explains what we see as the main advantages of market betting.