DougJ said:
That is the key.
I am pretty new to the exchanges and still don't feel comfortable with them simply because of my own ignorance and lack of understanding at this point. But it seems to me there is a lot of value there and this is where the industry is heading. It certainly makes sense.
A couple of exchanges have gone under recently and although it could be argued an exchange which is also a Bookmaker could in theory use its own exchange to encourage liquidity, it is the overall running of the business that takes its toll, I have it on good authority that Betdaq is losing £15M a year to stay in the game.
While Betdaq has posted a £20M bond to protect any clients funds, Betfair have also ring-fenced players funds by law. Outside of this, no funds are safe, and nothing safe should be read into the fact they are based in Gibralter, although a British colony, has nothing to do with British Law.
While Betdaq has posted a £20M bond to protect any clients funds, Betfair have also ring-fenced players funds by law. Outside of this, no funds are safe, and nothing safe should be read into the fact they are based in Gibralter, although a British colony, has nothing to do with British Law.
winbet said:
Wow...just out of curiousity, how can that be? Once they have the software, what kind of expenses do they incur? I am completely naive when it comes to exchanges but hope to learn more. I was under the impression there was no risk for these guys and they just collected a small percentage of the amount wagered. Less than the normal 10% vig, but they are not covering the bets so it is better than a 5% hold. Can you fill me in Winbet?
Mansion are not charging commission on exchange bets so basically there is no profit. Its common practice for new exchanges to support their own markets, incuring small losses on bets, but they do add up over a year. Although they may have paid for the software etc, it costs a small fortune to run and keep updated , add the cost of back-up to ensure smooth operations at all times and staff, office space, advertising, it doesnt take long to see a loss balloon.
All this will of course have been foreseen and budgeted for, with an ample time-scale for the losses. My worry would be under estimating those losses, Friends working at both Betfair and Betdaq are constantly talking about huge costs, especially on the computing side.
BETDAQ believes that security is paramount. All customer funds are held in ring-fenced accounts and are further secured by a US$ 10 million bond which has been placed with Allied Irish Banks plc.
As usual, you pays your money and takes your chances.
All this will of course have been foreseen and budgeted for, with an ample time-scale for the losses. My worry would be under estimating those losses, Friends working at both Betfair and Betdaq are constantly talking about huge costs, especially on the computing side.
BETDAQ believes that security is paramount. All customer funds are held in ring-fenced accounts and are further secured by a US$ 10 million bond which has been placed with Allied Irish Banks plc.
As usual, you pays your money and takes your chances.
InSpades said:
While I am sure this goes on a lot more at new exchanges because it is the only way to increase volume, do you feel the older and more respected exchanges still do this as well? I am not questioning what you said, I am just curious to know if everyone does this because if so, there is obviously a lot more risk than if they were just taking a commission and had no opinions.
