Liquidity Pooling

Fizzer555 had a comment on Betfair's Cross Market Liquidity Pooling:

My first thought was, how are they going to deal with different commission rates. I don't use the Betfair Asian Handicap markets very often because of a lack of liquidity and uncompetitive pricing - but the commission rate was only 0.75% and you could use it to get small bets matched near kick off at prices equivalent to the match odds market but at lower commission. Not sure when they changed it but just looked at some League One matches today and the commission rate is now 5%, so problem solved for Betfair and one less opportunity for us.

Again, I don't believe that Betfair help themselves here by offering so many different AH markets on matches. A look at the Portsmouth v Mansfield Town game currently in progress shows no less than 33 different AH markets ranging from Portsmouth -4.0 (have Portsmouth EVER beating anyone by more than four goals?) all the way to Mansfield Town -4.0. Most of those markets will have seen zero traded, and simply put people off. When you need to scroll down the page for 5 minutes before you see any signs of life, the tendency is to give up. Why they don't start with a sensible +/- AH market, and then add adjacent ones if the justification is there, I'm not sure. Actually, I am sure - it's simply easier to plonk 33 markets down and move on.

For the same reasons as Fizzer, I rarely use Betfair's AH markets myself, but I would if they were competitively priced. Unfortunately a 0.75% commission rate means nothing to anyone paying the Premium Charge so that was never an incentive.

Betfair's AH liquidity is surprisingly low. As Fizzer points out, their incentive low commission rate of 0.75% seems to have quietly gone away, so the excellent point about different commission rates has been resolved, and the chances of similarly targeted incentives in the future is reduced because of the 'Pooling'.

Had I read my "Premium e-mail Newsletter" from Betfair yesterday, I would read about this earlier. Here are some more comments and plans for the release:

That’s [the AH] a simple example, but in practice the range of bets we will show and match will be much wider. The first sport to see liquidity pooling will be Football and initially this will apply to four markets: Match Odds, Draw No Bet, Double Chance and the -0.5 to +0.5 lines in the Asian Handicap.

We hope to load the first matches using this new logic early in November, but how widely and
quickly we roll this out will depend on how testing goes between now and then. Of course we need to test not only that the logic works as expected, but that performance is good too and above all our customers are safeguarded.

There is also a proposed change to the Correct Score markets:

We currently offer all quoted scores from 0-0 to 3-3 in Football Correct Score (C/S) markets, with “Any Unquoted” listed as a selection to cover all possible scores where one or both teams scores four or more goals. In many situations, perhaps where one team is a strong favourite like Barcelona at home to Elche, “Any Unquoted” will be the favourite in that market. It’s effectively an inexact proxy for “Barcelona to win and score heavily”. 

We’ve had some customer feedback asking for “Any Unquoted” to be split into three selections, “Any Other Home”, “Any Other Away” and “Any Other Draw”. That would give customers more choice – those who wanted to back just Barcelona to score a hatful should get a slightly better price, while those who still want to bet on (or against) all three outcomes can dutch them.

We are going to trial running correct score markets with those three selections instead of “Any Unquoted” later this year. With football markets offered every day at this time of year there will never be a point where we don’t already have a correct score market loaded on the site, so it won’t be possible to simply switch all markets over to the new selections. That means that we’ll start loading new markets with 19 selections as “Correct Score New”. Already loaded markets will remain as they are now, with 17 selections and called “Correct Score”. Once all correct score markets with “Any Unquoted” have been settled, all correct score markets will have the new template and we’ll rename them all simply “Correct Score” as now.