General

Betfair was founded in the year 2000.

The turn of the millennium bought much excitement to a gambling world that had seen change over the previous decades but slowly stagnating. The idea of a betting exchange was a revolution and it was an exciting time for backers and layer alike. For the first time the general public could become bookmakers without a licence.

It was truly a remarkable time.

Since those early days we have seen a number of betting exchanges such as Matchbook, Betdaq, Smarkets, Betconnect and Spreadex. We shouldn’t be scared of competition and it is good to have options. However, there is only so much money in the betting pool and with a vast number of bookmakers and betting exchanges there is cause to be concerned by the money being spread too thinly which doesn’t really help anyone. I don’t have the data to detail the liquidity of the Betfair markets some 15 years ago but they must have been a lot stronger than seem these days.

I follow two-year-horse racing and the limited money on the Betfair markets is concerning. When you see just £20,000 bet on a race (£10,000 in real money terms as the back and lay are shown) with perhaps 30 minutes before the off it is getting to the point where the markets are on the verge of collapse. When you consider that much of this is the same money going around with backs and lays with traders looking for a quick profit the actual real money bet on any given race must be miniscule. It’s true, the markets liven up in the last 10 minutes before the start of the race as the traders come in with bigger cash and the traditional gamblers look for value.

To be honest, the early markets, especially the evening before are almost worthless. You may get lucky and get a few quid on a horse but it really is a dance between the traditional bookmakers and the betting exchanges which makes markets volatile. I guess for the traders this isn’t all bad news. Certainly with poor liquidity there is ample opportunity for the markets to be manipulated with a small amount of money. I am sure some manipulate the exchange markets hoping the bookmakers push out the betting and someone steps in to take advantage. The bookmakers are then quick to readjust the betting and go much shorter odds which I’m sure they take advantage of too. Often these ‘gambles’ drift back out to similar or larger odds.

The only time you can guarantee good liquidity is on the major meeting especially the likes of the Cheltenham Festival when the betting is robust.

There is little we can do about poor liquidity. Perhaps if one or two of the platform disappear it will bolster the market strength but that’s unlikely to happen.

Personally, the exchanges are just about strong enough to cater for my needs because I’m betting smaller money or wait until just before the start of the race. However, if I wanted to bet £1000 it would be a pointless exercise. Sure, I could lay a bet of £1000 if I thought I could get a horse beaten but that doesn’t seem to happen on the early market where most backers and layers keep their cards close to their chest.

The betting exchanges are functioning. It’s as though they are ticking over and punters just wait for the late market to do business. Perhaps this is just the nature of the beast and a similar pattern on the stronger market too.

However, many punters are concerned that the liquidity is so poor that they would rather bet with bookmakers. However, with their restrictive nature of limiting or closing any account that may threaten their profit line you will be struggling to make much ground. I have heard of many punters opening up multiple accounts under different people’s names and betting small money across the board to slip under the radar. It really does seem a testing time for the gambling industry with welfare issues at hand which just makes a difficult situation worse.

It seems you are damned if you win or lose.

However, the betting exchanges are a lifeblood for many punters and I’m thankful they exist as bookmakers would sound a death knell to most profitable punters as they are restricted.

It’s a strange situation when bookmakers have turned into extremely ugly accountants.

They’ve taken the turf out of the equation which long term sees everyone lose.

For the time being, my first and last port of call will be the betting exchanges. At least if you get a bet placed you don’t have to fear the worst that your account won’t exist tomorrow.

The most common reference regarding psychology and gambling is in the field of psychopathology and gambling addiction. Clearly, this research has been helpful in not only defining the clinical aspects of compulsive gambling but finding treatments to help individuals.

However, there is another side to gambling psychology which is becoming popular and that is how psychology – the study of behaviour and mind – can be used as a tool for advantage. It’s a fascinating and little known subject for the simple reason that most research is undertaken by individuals or corporations who invest often large sums of money to appreciate gambling from the perspective of the human condition.

Psychology has become something of a dark art for both backers and layers using this powerful data and insight to take advantage of those who simply do not know that psychology is being used against them.

I have found a couple of psychological angles based on theories and principles which detail such advantage. One is related to the Contrast Principle which hypothesizes that people often over compensate when judging variables. This is an interesting finding because it gives an opportunity for those informed. An example, gamblers often consider a beaten horse has little chance of reversing the form. Consequently, the price offers greatly value.

Many advantages relate to social psychology, particularly stereotypical behaviour or fixed action patterns, which suggest – via the human condition – that individuals behave in very predictable ways. As these behaviours are unconscious, those with insight win your cash.

The betting exchanges are an area where psychology is at play. These well-informed gamblers use psychological theories and principles to making a killing. The great white sharks in a small pond feeding on its prey.

It’s a fascinating subject matter.

I would suggest to anyone using betting exchanges to watch how they bet, especially those actions which lead to regular loss. They may fall prey to a layers using psychological angles and beating the odds. It could be something very simple such as the timing when placing a bet. In fact, it could be almost anything. Simplicity is often key. However, the only person who knows these psychological principle is the one who has done the research and found statistical significance. Obviously, the sale of such information is unlikely.

The use of psychology within gambling is a subject you won’t hear or find much literature. In fact, this is one of few posts on the internet because little is known about this subject. However, make no mistake it is used by the few who are making a living from something most cannot envisage or see.

The ultimate winning principles with a psychological underpinning.

The Secret.

Who doesn’t want to know the secret to success? If only you had believed enough!

But what is the law of attraction and can it help you become a successful gambler?

The philosophy of like attracts like. The focus of intentions and thoughts. You can attract positive outcomes and success into your life. In essence, if you believe you are a professional gambler it could happen.

‘It’s the latest self-help book everyone needs!’

But could it help you become a professional gambler?

The law of attraction instils that we have a direct influence on this process. However, whatever you may hear, there is no scientific evidence to support this premise. It is a belief system which cannot be objectively tested. Positive thinking and strong mindset doesn’t guarantee success.

The law of attraction is disguised as your best friend, hope and all you have ever wanted.

It’s why you have to question any guru who details how mindset is so important and it comes before you get the ‘secret sauce’. There is a reason for that. The mindset is to get you onboard with the program and suck you in.

You are given the illusion that you can achieve the impossible if you follow the system.

No amount of motivation or believe will transform your life alone.

It gives the impression that you don’t need any skill. As if you have the right mindset and believe you can outweigh your lack of skill to a point it is more important than skill.

‘Just keep on trying. It was just about to work for you but you quit. You just didn’t put in enough effort. And guess who I blame…’

‘You!’

To be a successful gambler is based on skill. Anyone who tries to tell you different – it’s a scam.

The guru will say: ‘You just didn’t believe enough.’

Strip away the pseudo science and it’s an empty box. Who is the person to gain? It’s not you.

Consider these main concerns:

• Lack of scientific evidence

• Over simplification of complex issues

• Victim blaming

• Unrealistic expectations

• Lack of accountability

• Neglect of negative emotions

• Financial exploitation

• The placebo effect

The law of attraction isn’t something used to help you succeed it is actually something used against you.

Please remember to gamble responsibly. There are no guarantees to success. Most professional gamblers started from a blank slate and learned their craft. It was by trial and error. It is a life of hard knocks.

If someone tries to use the concept of the law of attraction to afford gambling success I can tell you without doubt it is a scam.

Good luck.

At racecourses across the country you will see bookmakers, often known as turf accountants, offering odds against the next race on the card. It’s a tradition which goes back centuries and unlike many countries, which use a tote system, a unique characteristic of horse racing in the United Kingdom.

In essence, bookmakers need to know little to nothing about the horses in a given race. How could they possibly have an opinion on each and every horse? It’s impossible and pointless. Bookmakers have a system where the odds are slightly in their favour (akin tot he house edge at the casino) which means long term they have the odds in their favour. This gives them a winning advantage over punters. However, a skilful punter can turn the tables on even the most canny layer. For this reason both need to respect each other.

Looking at horse racing results you will see the total starting price (SP).

For example, the 7:00 Wolverhampton, won by Crimson Coronet (4/7f), had a total SP of 120%. This percentage is the possible profit for the bookmaker spread across the horses in the race. In this instance there were nine runners.

Bookmakers are not guarantee a winning book and it is dependent on the result. If the favourite wins it is very likely the bookmaker will lose money on that race.

In general, if the favourite wins a race, the bookmaker will lose. If the second favourite wins, they will try to break even and if any other horse wins they should make a profit. If an outsider wins, they could make a killing. However, this is dependent on whether a bookmaker has laid a winning outsider which could see significant liabilities.

For example, if a 50/1 shot is laid to £80 it would see a potential loss of £4,000. At smaller racecourses, bookmakers would struggle to take that much money per day let alone per race. There simply isn’t that volume of business beyond those more prestigious meetings such as the Cheltenham Festival. Any bookmaker worth their salt tries to make a good book. By that I mean, they limit significant loss on any given horse. Clearly, they should negate such liabilities by laying off some money with other bookmakers or using betting exchanges. You will notice bookmaker often use Betfair to help manage liability. For instance, if someone bets on a horse priced 50/1 and the betting exchange offers 100/1 they could, in theory, take just about half of that bet as profit without fear of loss.

Betting exchanges have transformed the forming of traditional betting markets. This has lessened the skill or need for odds compilers. I can remember being at Great Yarmouth racecourse in the days before the betting exchanges. You would see a few brave bookmakers pricing up the next race. They were literally testing the market. It was being formed before your eyes. This was a time when skilful bookers stood out from the crowd.

Today’s bookies have the luxury of working with a formed market. This doesn’t mean some don’t use their own skills or take an opinion on a race. This could see them make more money or, if their opinion is wrong, they may increase their losses. Rarely do bookmakers want to take an unnecessary gamble as they’d rather leave that to the punters.

Most bookmakers are keen to make a tight book which sees them minimise losses. However, if the favourite win they are likely to lose on that race. Sooner or later the rag comes in first and it’s a bumper payday.

In truth, bookmakers have made huge profits while others have gone out of business.