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.