Win And Done

My ratings and FTL table are finally up to date, although the latter will have to wait a day as there is some Monday night action. The action packed EPL schedule contrasts quite dramatically with the lack of action elsewhere in late December / early January. One surprise is that Liverpool are still rated third in England, ahead of Tottenham Hotspur, Arsenal and Chelsea. Much has been written about the money to be made from laying Liverpool this season, but my numbers show that this might not continue in the second half of the season. When it comes to football, results can be deceiving. Football is a low scoring game of just 90 minutes, often decided by just one goal, and luck plays a big part. For me, any rating method that looks only at results is fundamentally flawed. 

The bottom three (18th to 20th) in the EPL are Wigan Athletic, Reading and Aston Villa, with Queens Park Rangers in 17th place.

The XX Draws started the year with a Classic winner (Southampton v Arsenal), but ended 2012 with a poor run for the Extended selections, currently on a losing run of eleven. This weekend's three completed selections to date did at least have the consolation of all being 0-0 at Half-Time, but ended 1-0, 3-0 and 2-0 respectively.

During the holidays, the big winner appears to be Premier Edge who ended 2012 with 8 winners from 10 selections, and now sit in third place +9.67 points from 101 selections. One other notable climb up the table is backing Ian Erskine's 'Lay The Draw' selection, After one winner in 24 selections, and a loss of 19.70 points, the selections have won 7 of the next 11 to climb into profit. Another example of how quickly fortunes can change with draw backing.

One controversy that started to surface before my break concerned Smarkets, an exchange I have previously mentioned a few times, and writing in July 2011 that:

Smarkets may be little known for now, but they are fast gaining attention and a reputation for responding to the customer. As the poster above said, "Do you really think in 20 years time people will be paying up to 60%?" No, they won't, not when Betfair ceases to be a monopoly, a day that is one day nearer than it was yesterday, and nowhere near 20 years away.

While there are two sides to every story, and the truth lies somewhere in the middle, the gist of it is that one customer somehow had an edge sufficient enough to cause Smarkets, and their three major market makers, problems. After winning £20k in six months, the customer's account was closed. Smarkets deny that it was because it was a winning account, but their claim that it was because the client 'threatened their licence' (by reporting them to the LGA) is something of a stretch, seeing as their own terms and conditions advise dissatisfied customers:

Customer Disputes

Customers should contact support@smarkets.com if he or she feels that the Smarkets Betting Rules were not properly enforced. Any disputes will be dealt with in a prompt and professional manner. If Smarkets does not resolve the dispute to the customer's satisfaction, he or she should contact the LGA at complaints@lga.org.mt.

Emails from Smarkets (under pressure from their market makers) reveal that the customer was requested to change his betting style, or face his account being frozen, but the 'offer' was declined:

James,

It appears I'm not being clear. I'm asking you to stop trading until you provide liquidity or until I can get more liquidity providers. I understand the principles of free markets but we are a small startup who has not yet reached critical mass.

I will put a freeze on your account if I have to but I'm asking nicely. I think I've been pretty honest with you. I would appreciate some courtesy.

Jason

All things considered, this is not good news for anyone. For Smarkets it has proved to be a continuing PR disaster, (betting forums are full of references to this, and the Bookmakers Review has downgraded Smarkets' rating - see below) while for those of us who would love to see a viable alternative to Betfair emerge, (this 50% is killing me and no doubt many others), the message appears to be that this alternative is still some way off.

Smarkets says they cannot support consistently winning punters

According to a report from a player on exchange trading forums Geekstoy and BetAngel, London-based exchange Smarkets is now closing player accounts for winning too much.

The player that reported the complaint stated that his Smarkets account was closed after winning an estimated £20,000 over a six month period.

In the back and forth that followed between the betting exchange management and the player, with Smarkets claiming to have suspended the account only after the player threatened the company's Maltese license and the player saying that by complaining to the LGA he only exercised his rights, some very interesting information emerged.

Even though Smarkets claims to have no policy of suspending winning accounts, the company asked a successful player to change his betting patterns as apparently the market makers providing liquidity to the exchange were not happy with his "greening up".

In other words, Smarkets asked the player to adjust his successful betting strategy to a slightly less profitable one.

In an email to the player, Smarkets management stated: "Please don't close out your positions on Smarkets and green up against the market maker. I know this is a pain to ask you but we're small and I need to build the trading ecosystem in the right way for our markets to be able to mature."

And again: "I have just spoken with the market maker. They are complaining again. We're too small right now to risk losing a market maker. It's probably best if you stick with Betdaq and Betfair for the time being. I need to get more market makers and more recreational punters on board before we can support consistently winning punters. Most of our customers are arbers."

Because of the inconsistencies with the exchange business model and for admitting to depend on a limited number of market makers, Smarkets has been downgraded to 2.5 (3-).

UPDATE 02-01-2013: The article above is not about the player that reported the complaint on Geekstoy and BetAngel asking to have his account re-instated being right or wrong. As a matter of fact, Bookmakers Review doesn't even know the identity of the player and we believe that Smarkets, like every other betting operator, have the right to choose with whom they want to do business with.

What is of interest to BMR are the statements of the betting exchange management admitting Smarkets is a small operation, heavily dependant on few market makers. This is enough to suggest Smarkets as a betting operation is vulnerable to problems and a rating of 2.5 better reflects such situation.