Social Betting

I thought this was an interesting piece from Ruud Verdellen on www.egrmagazine.com

Social media and web 2.0 appeared on the horizon five years ago and ever since then the egaming industry has seen a lot of companies trying something dubbed ‘social betting’, including BetArcade, Betfair’s Taikai, and Pikum, backed with £4m from Virgin, to name but a few.

And while companies like Smarkets and Betable are still trying, all of those others have since gone out of business. Why?

Having been involved with the Taikai product and social media in general over the last few years, I believe that one of the main reasons is that betting is simply not a social activity.

A director at Unibet came up with the word ‘moneytainment’ which sums it all up: you bet to make money and you do it for the thrill of winning. You don’t bet for friendly banter, or for the fun of it.

While you might enjoy winning a few quid from a mate, would you enjoy it when your mate is losing his whole income to you?

Would you like to be reminded by friends when you lose a bet?

Probably not, I think. You’d like to delete that losing tip you put in a Tweet or status update.

What many of you might now respond is that Betfair runs a very successful forum, on which thousands share their tips and comments on each other’s bets. This is true. But the main reason for the forum’s success is... it’s anonymous.

Everybody can pretend to have placed a winning bet and nobody cares about giving losing tips. This is very different to the things you would be doing in your social environment.

The second reason social betting has failed is an obvious one: liquidity, as with no liquidity, it will be difficult to attract new users and to offer existing users an exciting proposition.

But there are new opportunities on the horizon for social betting, when Facebook launches its virtual currency platform in June.

That could solve the liquidity issue, as companies would have access to 21m adult users in the UK, assuming Facebook would only allow gambling companies to access the platform.

The million pound question, then, is who will come up with the right betting proposition? One thing seems to be clear: it will have to be a less conventional type of betting than we have seen before.

Pikum, as you may have read, folded earlier this year. The truth is that for many people, betting is a bit like sex - something done in private (and in the case of Anonymous - something done alone).

Joking aside, for anyone serious about investing on sports, it's not an activity that lends itself to teamwork. Who in their right mind would find an edge, and then reveal it to others? Once the word is out, the edge vanishes. It's an ideal occupation for the mathematically inclined nerd, who has the inclination and patience to search for edges, often in the most unlikely of places, and the balls to commit money to the venture.

I noticed on yesterday's Betting For A Living blog, the auther posted

I can't say too much without giving away my strategy (which I would rather not do in order to protect the edge I may or may not have)...

well, as he's talking about in-running horse-racing, I'd be willing to bet that unless he has inside information (which he hasn't mentioned) it would be quite remarkable were he to have uncovered a strategy giving him an edge in such a well followed and, shall we say, 'dodgy', sport. Not impossible, but highly unlikely, at least in my opinion.