The New Betting Exchange.

[john Tuohy]

As some of you might have worked out we are talking about setting up a new "Betting Exchange"?

Why?

At the moment the market is dominated by Betfair, and let's face it they have got a bit complacent.

Number Two is BETDAQ. On the horse racing front they seem to do quite well. Lots of liquidity and action on the in running markets. Not to mention their excellent tipster DAQMAN. The sports side with the possible exception of Football has never really taken off. Not for the want of effort on the part of BETDAQ PR Director Russ Wiseman, who is a member of our "Sports Exchange", and an excellent fellow. Destined for big things. Perhaps "Russ" might like to add a comment if I have mis-represented BETDAQ in anyway,

Also perhaps "Mick Stone" another one of our illustrious members:- an ex- Betfair man might like to throw in his pennyworths. Andrew "Bert" Black who surely reads this excellent site might like to say a word as well. I am sure Gordon, one or two of our other new members, and no doubt one or two of our older members may have a view as well.

So there are a few other betting exchanges out there as well, but does anyone use them?

If you click on Exchange Betting above it will take you across to "Matchbet". Friends of ours. Comments welcome.

The plan in my mind is to set up an "Alternative Betting Exchange".

It will be owned by punters, run by punters, run for the benefit of punters. By "punters", I mean gamblers, traders, sports enthusiasts, etc...

What I want to know is what do YOU think? If we set up a new "betting exchange", what would you want it to look like?

What would you want it to do?

What commision should we charge?

Should we have rubbish like "Betfair Poker" and "Casino Games", or should we be be honest and moral, and just stick to sports exchange punting?

Should the site look the old Flutter, when you knew who you were betting against?

Should we have league tables so we can all see who is "The Top Dog"?

Should it look like the "OLD FUTTER"? Should it look like "BETFAIR" or "BETDAQ"? Should it look like "MATCHBET" or one of the other "fledgling" exchanges?

It's all up to you?

Is this a goer, or am I just whistling in the wind?

Your comments would be gratefully appreciated?

http://www.matchbet.com/live/

[John Nokes]

I am not a trader so can only speak from a typical punters point of view.

Liquidity is the main issue, and realistically its not just a small problem its the be all and end all.

The main reason others have struggled to break Betfairs strangle on the market is that the in running element on say horse racing carries well over 90-95% of the industry market, therefore anyone in the main who bets on horse racing will inevitably bet where they can best use the inrunning side of an exchange in order to manage their market should they require it.

Anyone who bets in running obviously will not be willing to jump ship unless the market is better elsewhere, while everyone is doing this the status quo remains.

This is the same for me unless you can get a set amount of liquidity and know you can manage your market on the majority of your sports betting. If you bet in thousands and need to get out at any point you really need to know the market is first of all strong enough and liquid enough to take back the bets. Even if you bet in tens or hundreds you need to be confident of this, as we all are aware differing amounts of money mean different things to individuals.

For me it would be too hard at this point to try and break this stranglehold looking at it from the same business model that others have tried to do, mainly try and offer the same things for less commission while trying to make profits to pay back investors, and pay staff, before finally giving yourself the big cheque s to speak.

I would try to look at it and offer something more simplistic to start with and hope that it takes off, i am sure if you go into something trying to compete with Betfair on the inrunning markets you are doomed to fail before you start.

I personnally dont know if you could make it work, but i would look into markets Betfair dont offer in running to compete on.
An example would be Championship, League 1 and 2, Non League, certain Scottish divisons in football, where it doesnt really matter who you bet with, as once its placed it lives or dies by your earlier actions, as you cant manage it.
Offer a way to help it be more people orientated ie you know who your betting against, banter on a matchday etc.
Maybe competitions where you pay an entry fee for a season long competition with structured payouts ie 1st 2nd 3rd etc, or maybe a weekly one
If you can get it to grow from this then great, if not you havent lost too much as long as you can keep the costs down.

The big problem is getting people to put money in.

If you have a chunk of money already in Betfair how do you get people to take it out and wait for it to clear to put it onto your site for a bet ?

We all know its easier to just go to the market for football and place a bet on Betfair once the racing is finished when you arent going to beat the odds elsewhere, unless you are hammered by commission charges.

As i say i am looking from a punters point of view and not traders, it may well be different for those users.

People need an incentive maybe, but i hate the free bets thing, people come take and generally dont bother coming back. Maybe the incentive for a lot of users is the fact they want an alternative to work.

[john Tuohy]

I think we are all thinking along similar lines.

More comments welcome.

Regards the "hook" ,maybe members/users share i profits of the new exchange?

[Matt Punt]

Well I have been considering doing 'something' with punt.com for a while.. and i think the brand potential is great. I also have another prime domain which could suit, but cannot post that here yet over privacy concerns.

[john Tuohy]

I agree with everything you say Matt.

At the moment there is a link with matchbet.

I would say status at moment is "potential partner".

I am not sure how this will all develop over the next few weeks and months.

We may have to revert to first principles and write a business plan along the lines you are suggesting.

We would then need a business model, data model, function, etc...

And then possibly decide whether we could use an "amended" matchbet, or whether it would be easier/cheaper tos set up a new exchange.

Obviously there will have to be a lot of discussions if we are going to take this forward, and as far as I am concerned the more members involved the better.

[Matt Punt]

Apologies John, are you using matchbet.com for this ?

[Matt Punt]

I really like the idea of a new exchange, there's a lot riding against it though, as everyone has said every competitor to Betfair has failed, unless you look further afield at intrade maybe, though I'm not sure of their story, their markets are not perfect in the way they work.

I think you need the details to be different, and you need a more general hook to pull people accross - this is the crucial part.

Details that could be *discussed* might include,

- the exclusion of any conflicts of interests: betting on own exchange, utilisation of platform for personal profit etc - cross matching.
- looking for better regulation, particularly in the area of exchange ethics - what do stock exchanges do that betfair doesn't. call yourself an exchange, don't put the bookmaker blazer on when it suits.
- the use of a seperate clearing house for the way the bets are matched, settled etc. this might solve some of the problems above.
- the customer comes first, the customer is the exchange, the level of service must be far superior to that of the current monopoly.
- no exchange games, casino or anything other than a product that offers P2P betting. before the outset we need to admit that this is a niche product, it's not going to set the world alight with profits, it's a small margin high turnover job that needs to be done with integrity.

Like I say, these are just discussion points.. Betfair falls down in these area's. The really important bit is the hook, what difference in design can be made to make the experience worth switching for?

imo it needs to be more social, more interactive, more aobut the users...i thought flutter was a more enjoyable experience because of the user names, though there are issues with annonymity..

we might also want to look at innovative ways to match bets and the possibility of focusing on a niche, whether that be racing, or a particular sport to begin with.

Deep pockets are definitely needed, though I think this could be done fairly cheeply, it's maybe worth investing in some talent to get the idea right, what we're trying to do isn't easy.

Above all, liquidity is what's required, I'm sure some of us are already providing a lot of this or know people who can, but the important point is this needs to be made easy to do. Few people have the time or inclination to waste time posting bets somewhere else other than (or aswell as) betfair, it's too much effort. An API and specialist software looks to be a neccessity.

btw, I have a couple of domain names that might be of interest.

[Maroon Heaven]

Another voice who would like to see another competitor to BF. I'd say the only serious way of getting this off the ground is through a partnership with someone with deep pockets. The likes of coding and software needed is a serious financial outlay, add your staff costs and administraion. I try and use Betdaq but their simply is not the liquidity needed.

[Gordon McIvor Wilson]

Blimey, this topic got the boys' attention! Really good comments and wise counsel, also interesting arrival of Smarkets on the discussion. When the wkend's frantic sporting activity ends, lets draw some conclusions and an action plan = Aussies all out, back later!

[john Tuohy]

Cheers Ron,

Sounds good to me.

[Ron]

The only way a new exchange could stand a chance is by keeping overheads to a bare minimum; this would obviously mean running the business from rent free premises and having minimal staff.
2 & 3 option markets would be the target with 0% commission and profits coming from creative thinking.

Must be a very complex thing to set up, would scare the pants off me. You’re a brave man John but as they say “Fortune favours the brave”