Wednesday, 11 October 2017

All The Best And Goodbye

Albufeira Steve commented on my previous post:

I don't normally disagree with you but... In an ideal world what you say is true but the days of bookmakers being able to make a balanced book online are well and truly over. Exchanges lowering margins to almost nothing and price comparison sites have seen to that. They can only take money online if they offer top price. They now have to rely on having efficient prices to make a profit. A casino model rather than a bookmaking one. With a bookmaking model it does not matter if sharp punters win as they will be paid by the losers, but with an efficient price model you can not allow sharp punters to take all your profits before prices become efficient, hence the staking restrictions and closing of accounts of those that try. Bookmaking is now much more of a battle between bookmaker and the sharp punter than it used to be, and the closure of accounts is testament to that.
I'm not sure Steve and I actually disagree on too much. I'm sure that sportsbooks don't always have a perfectly balanced book, and sometimes have some exposure, which is what I meant by saying that they avoid taking:
unnecessary risk by voluntarily going in-play with an unbalanced book.
However, by definition, online sports books with a centralised database are in a very good position to manage these risks by simply denying a bet that might tilt the book too much one way. Pinnacle manage this by having limits, and the problem of gamblers being limited or closed is one that is constantly being discussed. 

Exchanges have certainly made traditional bookmakers more competitive as has the arrival of the new business model typified by Pinnacle.

I do disagree with Steve on his statement that online books "can only take money online if they offer top price". 

Cheapest isn't always best, and not all punters have access to all prices. 

1.99 on an exchange looks good, but factor in 5%+ commission, and it's not so good.

It might be worth dropping a point or two just to avoid being seen as a best-price punter, and keep your accounts open for longer. 

There's also the question about trustworthiness and stability with some books, and a punter might well take a worse price with a book he trusts. 

Regardless, each bookmaker will be trying to balance their book for each event and punters seen as cherry-picking prices or arbing will soon find their betting options limited, i.e. take all the best prices, and it's goodbye. 

The old-school model books don't want customers who appear to know what they are doing, whether they are winners or not, and frequently taking best prices is a fast road to account closure. 

Fortunately the exchanges don't care and nor do the likes of Pinnacle, so while your options for entering a market might be somewhat limited, you are still in competition with other punters, not the market maker itself, because it is the weight of customers money in the market that ultimately determines the prices, not what some corporate odds-setters think they should be.

1 comment:

Tony Stephens said...

Initially I did think the same as Steve. However, you do see profit statements from the big bookies saying things along the lines of profits are down due to unfavourable sports results. Surely profits could only be down due to less turnover if they were properly bookmaking with balanced books. What I don't get with the "bookmakers" and what I think should be looked into is why customer A can't get £10 on selection 1 but customer B can have whatever they want at the same point in time.