Saturday, 8 March 2014

Moral Obligation

As expected, the court-sider case against Sporting Data’s Daniel Dobson has been dropped. In the civilised world, it is always hard to gain a conviction when no crime has been committed, and currently there is no law against transmitting data from a sports event, (nor is there a law prohibiting a blogger from linking to third-party posts while we are on a legal topic).

The bigger issue of whether a betting exchange should allow certain accounts to consistently benefit from access to fast data (yes, legal and bought at some expense) remains however.

It is hard, actually impossible given the speed at which they close accounts when someone shows they have half a clue, to imagine a traditional bookmaker offering in-play prices and allowing account holders to consistently pick those prices off as they become favourable.

That Betfair allows the practice is thus a concern. It could be argued that it is not ‘their’ money that they are losing, and technically this is correct – they pocket their commission and possibly don’t care which accounts flourish and which accounts wither, but they probably should, and their implementation of the Premium Charge suggests they are well aware that a small number of highly profitable accounts at the cost of a large number of losing accounts is not viable long-term.

As mentioned previously, and stated by Betfair themselves, the n-seconds delay is to protect customers. Clearly, the n is often insufficient, and Betfair are failing in their duty as a public company to look after the best interests of their share-holders and customers.

From a financial perspective, the inevitable long-term consequence is that markets will become more illiquid, and as we have seen in other markets, once liquidity starts to dry up, it’s a rapid downward spiral, resulting in reduced profits.

From a moral perspective, shouldn’t Betfair look after their customers’ money in the same way as they would their own?

Now that the legal proceedings have been resolved, it would be appropriate for the Gambling Commission to perform their own investigation into the fairness (or unfairness) of some in-play events. It would be hard to argue that the betting is fair, when the same accounts are consistently winning.

As we now know, Sporting Data is a company set up by three former Betfair employees, a fact that may or may not be relevant to Betfair’s decision to allow this practice to continue, but it is a relationship that should be part of the Gambling Commission's investigation if only to clear the air. Traders on a publicly owned exchange should be informed about just how uneven their playing field is.

Somehow, I can’t imagine that this state of affairs is what the Founding Fathers of Betfair had in mind when they set the exchange ball rolling, but then again there have been several changes over the years that would have them turning in their graves, except for the fact that they are very much alive of course.

7 comments:

Anonymous said...

The main problem I have with all this is not while the match is taking pace, but that betfair effectively facilitate the matching of bets after an event has been decided. i.e. customers are betting on an impossible outcome.

Incidentally this is the same during, for example, a game of football when all correct score outcomes are left open for betting whether they are still possible or not

Danny Murphy said...

I think it's high time we got some answers from Betfair about the activities of Sporting Data.

There is a clear conflict of interest here because as Sporting Data must be paying 60% PC Betfair have an economic interest in this company flourishing. Why have a bunch of smallish traders paying 20% PC when you can have a factory trawler ship harvesting everything and returning 60%?

No doubt Betfair are giving Sporting Data every assistance so they can make more and more money.

Danny Murphy said...

About the data side of it - Clearly it is not a criminal offence to transmit data but is it a civil wrong curently I wonder?

Do the ATP and WTA own their data? If a third party is buying it (ie the score)from the ATP and distributing to bookies for in-play purposes then it's possible the data may be copyrighted. After all if the third party is paying the ATP handsomely you would think there is something in the contract to protect their rights regarding the data.

A few years ago there was a big kerfuffle over publishing Premierleague fixtures as it turned out the PL owned the rights to the data and I think you need a license to publish the fixture list now.

Could that be a way forward for the ATP and WTA - allow people to transmit the data if they have a license?

It is absurd this situation has arisn in this day and age where you have groups of people transmitting the score from gadgets hidden in their pockets. Why doesn't Betfair or some third party get a license and then sell the data for anyone to use?

Anonymous said...

I don't see how there can be a law against telling someone the score.

The ironic thing is that the umpires do exactly what this chap does. Pressing a button which automatically transmits the score to people to lay bets (bookmakers) so they have the information ahead of those they are laying (punters)

Anonymous said...

Does anyone remember the match where the score was given the wrong way round and the layers were aware so offering bigger prices to people on Betfair who thought they were backing a player at a much higher price to win then the probability and then came the crushing news that the scoreboard was the wrong way round . How we laughed on the Betfair forum as the backers were fuming

Anonymous said...

Someone will always have an edge with data and as they should. Court siding is open to everyone.

I read that Sporting Data turned over 150k in a match and actually finished up losing 2k. The big bad company provided all that liquidity and lost money.

Sweeping 1.01 aside I will put my models up against courtsiders. Fast data doesn't always mean smart prices, wait on the edges and punish their greed.

Build a bridge and get over it.

JLivermore said...

"duty as a public company to look after the best interests of ... customers."

Since when is this a public company's duty?

I recently saw some milk in a supermarket which had a 'use by date' of the next day. Putting that milk in front of fresher milk (to be sold sooner) is not in the customers interest. Presumably it is in the interest of shareholders.