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.