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[Muddy]

Betfair - where winners have just become losers
Betfair retain a public image as a pioneering start-up, but customers' loyalty may be tested by their new "premium charges"

The life story of the Betfair betting exchange is relatively brief, but it has certainly packed a lot into its nine-year existence. From a tiny start-up, fired by the vision and genius of its two founders, Andrew Black and Edward Wray, it has grown into a billion-pound business, with hundreds of staff in plush riverside offices, customers in dozens of countries, and a Queen's Award for Enterprise nailed to the wall.

And amid all the staggering numbers, there is another, less tangible, achievement. Betfair is now one of the world's biggest betting businesses, yet it has always managed to retain a public image of the pioneering start-up, defying the corporate norms. Many of its clients still feel like members of a club, and have the same sort of regard for Betfair that Apple-fanatics do for their Macs. This has always helped to keep them "sticky", and allowed Betfair to defend its near-monopoly.

The loyalty of some customers may be tested to the limit, however, by Betfair's decision, announced yesterday, to introduce "premium charges" for some of their biggest winners. Betfair insists that the new charges will affect "less than 0.5%" of its customers, but still seems to stand in complete contradiction to the company's oft-repeated boast that this is a place "where winners are welcome".

The charges, and the conditions under which these will be incurred, are explained in a 1,200-word posting on the Betfair website. The rules are, clearly, quite complicated, but plenty of their customers are starting to consider the implications. One Betfair client who contacted the Guardian yesterday said that if the charges had been imposed over the last few weeks, he would have been forced to pay "a five-figure sum".

"They think they can do it because they have an effective monopoly. I look forward to their next advertising campaign. Instead of 'where winners are welcome', they can say, 'come to Betfair, where winners get screwed'," he added.

At least one of Betfair's winners, though, took a different view. "It's the best news I've had for ages, as it's not going to cost me a penny," Harry Findlay, professional punter and owner of Denman, said. "I'm a gambler, so the way I bet, it won't make a difference. The people who will be screaming will be the maths professors with computer models, the ones who just never lose. If they clear off, it should be even easier for me to make money."

Even so, Findlay could still appreciate a basic problem with Betfair's move. "I'm in favour for selfish reasons," he said, "but when I first heard about it, I thought it must be a joke, as it's so completely against the ethos of the whole company." Betfair's enemies in the racing establishment may also be interested in the news. After all, if Betfair itself can cream off an extra charge from people who must, in effect, be running a business on the exchange, why can't the Levy Board do it too?

Betfair was started by punters, for punters, and has transformed the betting landscape in less than a decade. Yesterday's news, though, could mark the moment when it stopped being a plucky start-up, and turned into just another faceless corporation.

 

[maxdemo]

So they make the Vig and the commission....wow what a model that insures they get paid and then some.

 

[Mr.Smith]

<TABLE class=forumline cellSpacing=1 cellPadding=3 width="100%" border=0><TBODY><TR><TD class=row1 vAlign=top align=left width=150>esv
Fresh face


Joined: 08 Sep 2008
Posts: 2
Location: Sweden

</TD><TD class=row1 vAlign=top width="100%" height=28><TABLE cellSpacing=0 cellPadding=0 width="100%" border=0><TBODY><TR><TD width="100%"> Posted: Mon Sep 08, 2008 10:26 pm Post subject: Betfair introduces 20% tax on winning players</TD><TD vAlign=top noWrap> </TD></TR><TR><TD colSpan=2><HR></TD></TR><TR><TD colSpan=2>Got an interesting mail from Betfair today explaining their new "Premium Charge" policy... details here.

<TABLE cellSpacing=1 cellPadding=3 width="90%" align=center border=0><TBODY><TR><TD>Quote:</TD></TR><TR><TD class=quote>Premium Charge Summary

You will only be considered for the Premium Charge if, over the previous 60 weeks, you satisfy the following criteria:

Your account is in profit;
Your total charges paid are less than 20% of gross profits; and
You bet in more than 250 markets.

Each week the customers who meet all the conditions set out above will be charged the lesser of:
The difference between 20% of the previous week’s gross profits and the total charges paid during the week; and
The difference between 20% of the previous 60 weeks’ gross profits and the total charges paid during that period.

</TD></TR></TBODY></TABLE>

In other words, Betfair is of the opinion that 20% of your winnings rightfully belong to them. If your account shows profit over the last year, and the total commission you have paid is less than 20% of those winnings, Betfair will steal money from your account to make up for the difference.

Every week that your account turns a profit, Betfair will deduct 20% from your winnings until charges paid equals or exceeds 20% of your net winnings over the last 60 weeks.

Seriously, what's the point of a betting exchange that doesn't allow players to win?
</TD></TR></TBODY></TABLE></TD></TR></TBODY></TABLE>

Are you fucking kidding me??????

 

[red007]

wasn't betfair the ones who alerted atp about that scumbag fixer donkey? too bad atp didn't do anything about it.

 

[SportSavant]

wasn't betfair the ones who alerted atp about that scumbag fixer donkey? too bad atp didn't do anything about it.

apparently they have a few deals with certain organizations, including the NHL

May 25, 2008

<NYT_HEADLINE version="1.0" type=" ">Web Site Puts Focus on the Fix in Sports Bets </NYT_HEADLINE>

<NYT_BYLINE version="1.0" type=" ">By JOE DRAPE
</NYT_BYLINE><NYT_TEXT>LONDON — With Internet gambling predicted to surpass $20 billion in 2008, and with illegal wagering accounting for $150 billion in the United States, by some estimates, the temptation for those seeking to influence the outcome of games has never been greater. Now, a raft of gambling scandals in sports, from cricket to soccer and most recently tennis, has raised an uncomfortable question: Are the games we watch fixed?
Last Monday, a report commissioned by the major tennis governing bodies recommended that 45 matches played in the last five years be investigated because betting patterns gave a “strong indication” that gamblers were profiting from inside information. And those matches, the report said, may be only the tip of the iceberg.
The match fixing might never have been discovered had it not been detected by Betfair, which has revolutionized online wagering since its Web site started in June 2000. At any moment, Betfair’s customers have $360 million on account and are at their keyboards, matching odds with fellow bettors in 80 countries. It is eBay for gamblers, with wagers being made in real time, usually after the matches have begun.
Betfair has become a focal point for the growing list of match-fixing scandals. Over the past seven years, it has alerted dozens of sports about suspicious betting activity, leading to investigations in horse racing, soccer and now tennis.
“You’re at risk of being victimized by inside information if you’re playing these markets,” said David Forrest, an economics professor at the University of Salford in England. “While Internet gambling has offered transparency, it has offered temptation as well. There’s greater liquidity for the cheats, and new forms of wagering and more money than ever. There are more incentives for athletes or officials to manipulate or fix a game.”
The most prominent scandal has involved the tennis player Nikolay Davydenko, ranked fourth in the world and seeded fourth in the French Open, which begins Sunday. At a tournament in Sopot, Poland, in August, Mr. Davydenko went from being a heavy favorite against 87th-ranked Martin Vassallo Arguello of Argentina to being a significant underdog during the match.
Mr. Davydenko’s odds got longer, and more money came in for Mr. Vassallo Arguello, even after Mr. Davydenko won the first set. Mr. Davydenko retired because of an injury with Mr. Vassallo Arguello ahead, 2-6, 6-3, 2-1. During the match, Betfair notified the ATP, the men’s professional tennis association, that its security team had recognized irregular betting patterns. After the match, Betfair voided $7 million in bets, the first time in its history that it had taken such a measure. It turned over all of its data to the ATP.
Mr. Davydenko has denied wrongdoing. He has refused a request from ATP investigators for the cellphone records of his wife and his brother.
The incident, along with the fact that at least a dozen ranked players told members of the news media that they had been asked to throw matches or had heard of similar approaches made to other players, prompted the 66-page report, “Environmental Review of Integrity in Professional Tennis.”
Now many in professional tennis are calling for a global anticorruption body for sport, to run along the lines of the World Anti-Doping Agency. The idea has been embraced by most major sports in Europe.
“Insider trading is a bigger deal in sports than in the financial markets,” said Justin Wolfers, a professor of business and public policy at the Wharton School at the University of Pennsylvania, who studies gambling. “We have the Securities and Exchange Commission here. Why not the same for what is a multibillion-dollar sports gambling market?”
From its office above the Thames, Betfair has been the de facto watchdog for sports. Computers glow 24 hours a day, and televisions beam in snooker, basketball, soccer and horse racing, among the sports on which Betfair offers 4,000 kinds of bets a week.
Betfair’s founders, Andrew Black and Edward Wray, whose backgrounds are in the stock market and investment banking, say they have built a better mousetrap. More than a million customers of the Web site, Betfair.com, wager against each other, setting their own odds and paying a fraction of what traditional bookmakers charge.
As Internet gambling has boomed from a $6 billion industry in 2003 to the more than $20 billion expected this year, according to the Maine-based research firm Christiansen Capital Advisors, Betfair’s revenue has grown to $372 million, from $64 million in 2003. Last year, by taking 2 percent to 5 percent commissions on winning bets, Betfair posted profits of $64 million, according to its annual report.
Its founders wanted to transplant the fundamentals of investment banking to sports. Now, Betfair handles 15 million transactions a day, or more than all of the European stock exchanges combined. Sports betting is legal in Britain; 8,000 betting shops are licensed and regulated by the government, as are the Internet gambling sites based here.
Betfair offers betting on major sports based in the United States, like the N.F.L., the N.B.A. and Major League Baseball. But it does not take any wagers from the United States or China, Japan, Hong Kong or India, places where online gambling is illegal. The men’s singles competition at the United States Open was the most popular tennis event on Betfair in 2007, with $307 million bet.
What Betfair brought to gambling was transparency. It has agreements with 32 sports governing bodies and is seeking more, promising to share in real time any unusual betting activity.
“We can tell you every single bet ever placed and who made it, from what funds and where those funds are going,” said Mark Davies, a Betfair managing director and a former bond trader. “It is a complete audit trail, and we want to share it with the governing bodies of sport.”
But many sports governing bodies have refused Betfair’s offer, Mr. Davies said, including the International Olympic Committee. During the 2004 Summer Games in Athens, Betfair matched $80 million in wagers on Olympic events. A spokeswoman for the I.O.C., Emmanuelle Moreau, said that the committee had taken proactive measures to address gambling threats. She also said it expected to have a system in place to be alerted to irregular betting before the Beijing Games in August.
“I have been told by one sport that they did not want to sign an agreement because they did not want to know the level of corruption that existed,” Mr. Davies said. “But it exists, and we’re just showing what has always been there.”
Still, others say that Betfair’s “in-running bets,” which may not necessarily affect the final outcome, are ripe for manipulation.
This month, for example, the British Horseracing Authority charged nine people, including a prominent trainer, Paul Blockley, and a jockey, Dean McKeown, with corruption, saying they shared inside information that their horses were not going to run well. The bettors, including five racehorse owners, had put money on horses to lose, which Betfair permits.
“Betting corruption existed before Betfair,” said Paul Scotney, the director of integrity services and licensing for the British Horseracing Authority, which has disciplined more than a dozen jockeys, as well as trainers and owners, with the help of Betfair’s data. “But Betfair offers other, and more, ways of cheating.”
More worrisome for Mr. Forrest, the economist and co-author of a recent study, “Risks to the Integrity of Sport From Betting Corruption,” are sports like tennis, in which a player can deliberately lose the first set against an inferior opponent so that the odds rise, then go on to win.
“It is a greater incentive for an athlete or official to participate in this type of manipulation,” Mr. Forrest said. “It is within their control, and they do not have to lose the match.”
Jenny Williams, the chief executive of the Gambling Commission, which regulates Britain’s gaming industry, said her agency was gathering information about in-running betting and its pitfalls.
“The jury is still out,” Ms. Williams said. “You can produce a theoretical risk, but we need to determine if it is going on.”
How many of the world’s sporting events are fixed? By virtue of the fact that match-fixing is a crime and most gambling is illegal, most economists and sports officials hesitate to guess.
The United States is hardly immune. On May 16, federal prosecutors asserted that the N.B.A. referee Tim Donaghy admitted to betting or providing inside information to gamblers on more than 100 games, many of them that he had officiated. The league said Mr. Donaghy was a rogue referee, but there are enough instances of gambling scandals in the world to suggest that match-fixing is also part of the American landscape.
In 2006, for example, Mr. Wolfers, the Wharton professor, after reviewing 16 years of college basketball results, found that point shaving had occurred in about 1 percent of the games. A Stanford economics student, Jonathan Gibbs, suggested in an undergraduate thesis that similar forces may be at work in the N.B.A.
In fact, the National Collegiate Athletic Association’s gambling survey of 21,000 athletes released in 2005 found that 35 percent of male athletes and 10 percent of female athletes said they had bet on college sports in the previous year. Of the 2,132 Division I football players surveyed, 1.1 percent (23) reported accepting money for playing poorly in a game. Of the 388 Division I men’s basketball players surveyed, 0.5 percent (2) reported such conduct.
A total of 2.3 percent of the Division I football players and 2.1 percent of the Division I men’s basketball players surveyed said they had been asked to influence the outcome of a game because of gambling debts, and 1.4 percent of the football players and 1 percent of the basketball players acknowledged actually affecting the outcome.
Mr. Wolfers said there was more to worry about in American sports, on which more money was bet illegally and without regulation. “There is a greater potential for corruption,” he said. “Bad guys are going to get away with more stuff unless we channel it into a legitimate economy.”
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[SportSavant]

Betfair has signed 40 Memoranda of Understanding with governing sports bodies around the world including ATP, FIFA and the IOC.
Betfair alerted the ATP about suspicious betting activity on the Davydenko / Vassallo match in Poland in 2007. (see NY Times article )