Bitcoin Betting

A recently added blog to my blogroll is Bitedge which has some interesting content on the topic of Bitcoin, in particular it's relevance for gambling, which is apparently high, with over 50% of Bitcoin transactions being gambling related.

The author, a former Betfair Australia and sportsbook.com employee, whose bio reads:

I am a keen sports bettor returning 4% profit.
I have been living of bitcoin since 2013.

That 4% is a realistic claim in my humble opinion, although from the later screenshot, we will see that the author is still relatively new based on his profits to date and number of markets traded.

They had a recent post on Betfair's Premium Charges, and if you read the comments there are some suggested alternative books for those successful enough to be looking for ways to avoid these punitive charges.

A couple of highlights from the PC post, although not a surprise, were that:

The premium charge has been a public relations disaster for Betfair. It has made the customers that loved Betfair and were their best source of positive word of mouth become Betfair’s worst source of negative word of mouth.

Then after explaining the maths in detail, he asks:

Confused? You’re supposed to be, that’s part of the strategy. It keeps getting more complicated to make sure no one except the banking and finance industry types who implemented the charge can understand it.

One example of how sneaky and insidious the premium charge is is that if you win all your bets in a week and pay 5% commission Betfair will treat it as if you paid 2.5 % “total charges” and make you pay another 17.5% premium charge bringing you to 22.5% which Betfair will say is 20% according to the premium charge rules.

Betfair try to rationalize this by saying if you lost bets they would have applied 2.5% implied commission toward “total charges” even though you actually pay no commision on losing bets.

This does not stand up because the premium charge is by definition for winning customers so the implied commission and “total charges” malarkey is just a condition to generate more premium charge and to make it more complicated and confusing.

The author then shares his Betfair Lifetime Profile from April / May 2013, which is curious given that we are now four years on from that date, although he does say that since 2013 he has been betting with Bitcoin so perhaps that's as recent an update as he has.

A net profit of £4.07 per market is great if his bets are automated or bet-and-forget, but if they required manual trading, I'm not sure the hourly rate makes it worth while.  

For comparison, my PC portal tells me I have been active in just under 24,000 markets lifetime, which at £4.07 each works out at less than £100,000 in total, which over 13 years comes to a rather modest £142.67 a week. A handy bonus, but don't give up your day job.

The author then suggests that PC payers move to Bitcoin betting. 

What you should do is re-evaluate other places to bet. I did and discovered bitcoin betting; boy did Betfair do me a favour there! If you are about to have to pay premium charge then the best bitcoin sportsbooks will more than replace Betfair.

The odds are good and the websites and customer experience’ are brilliant. You get to bet anonymously from anywhere in the world, you get free and instant deposits and withdrawals of any amount 24/7 and no premium charge!

It's not clear to me that "the odds are good" at all -

There are more suggestions though:

If you want a direct replacement for Betfair BetBTC (review) closely copies Betfair’s model. Fairlay (review) is another good bitcoin betting exchange with even better odds.

The premium charge is not going away until bitcoin operators get major traction in the market. Betfair have already taken the huge negative public relations hit and now they won’t want to lose the revenue for the effect it would have on the share price. So rather than try to fight it just move to bitcoin land, it’s better over here.

I had never heard of any of those sites until today, so this is not a recommendation - do your homework before if you are thinking of making a move.