Bookies take hit!

63587614

Hi lads, What ye make of that results lads. Man U win 1-0.

Surely the bookies took a big hit with this result. Again i'm disappointed to say I didn't get stuck in.

Mellor

What makes you think they took hit?

ModeSkeletor

The bookies don't take "hits". Every large liability they have is hedged somehow.

Keano

Very rarely does a bookmaker take a hit!

Bluetonic

63587614 wrote: »

Hi lads, What ye make of that results lads. Man U win 1-0.

Surely the bookies took a big hit with this result. Again i'm disappointed to say I didn't get stuck in.

Please stay within the limits of your own forum.

http://www.boards.ie/vbulletin/forumdisplay.php?f=1011

Feel free to come back Grand National day.

myflipflops

ModeSkeletor wrote: »

The bookies don't take "hits". Every large liability they have is hedged somehow.

This isn't true. You'll find that any of the large firms are willing to hold a very large liability.

63587614

Bluetonic wrote: »

Please stay within the limits of your own forum.

http://www.boards.ie/vbulletin/forumdisplay.php?f=1011

Feel free to come back Grand National day.

Ha very good, must of taken you a while to come up with that line.

All I know lads is that there are a lot of UTD fans out there and I saw odds a goods as evens on them winning last night.

applehunter

A bookies book is made up in a way that they don't take hits.

Mellor

applehunter wrote: »

A bookies book is made up in a way that they don't take hits.

That also isn't true. Its a common misconception.
It is an over-round, set up so that they make a profit and the hits are reduced. But hits are still very much possible.

For example, say a 50/50 type bet such as a handicap. The bookies offer 10/11 most of the time. On both sides, this is about a 5% overround. If the handicap is accuratly priced, there should be an even amount of wageredon each side, when that is the case, the bookies make a profit equal to the over-round. But the over round doesn't ensure a profit.

But when there is unequal money wagered on one side the potential for a hit arrises. So then the bookies change the price or handicapp to try an even it out. Some times the bets will be heavily on one side and the bookies lose,

Occassionally, a heavily backed that wins (when unlikely) the bookies take a hit. Its not common in socce.

ModeSkeletor

Mellor wrote: »

That also isn't true. Its a common misconception.
It is an over-round, set up so that they make a profit and the hits are reduced. But hits are still very much possible.

I find this, and your whole post very hard to believe. Trading rooms in bookmakers are made up of teams of top mathematicians, statisticians, phd graduates, etc.

If for example (the man utd match for arguments sake) - they were after taking in €2 million on the man utd win at 1.80, (resulting in a €1.6 million loss to them if man utd win), what is to stop them going to the exchanges and hedging say €1.4 million of this? Meaning they would only take a €200,000 hit in the event of a man utd win.

The point I am making is they do not have to take these large hits if they don't want to. Surely if I can see that, they can too? They aren't stupid. It's a multi-billion euro industry.

63587614

If they don't have any liabitity how is it so that some bookmakers get cleaned out and closed down.

myflipflops

ModeSkeletor wrote: »

I find this, and your whole post very hard to believe. Trading rooms in bookmakers are made up of teams of top mathematicians, statisticians, phd graduates, etc.

If for example (the man utd match for arguments sake) - they were after taking in €2 million on the man utd win at 1.80, (resulting in a €1.6 million loss to them if man utd win), what is to stop them going to the exchanges and hedging say €1.4 million of this? Meaning they would only take a €200,000 hit in the event of a man utd win.

The point I am making is they do not have to take these large hits if they don't want to. Surely if I can see that, they can too? They aren't stupid. It's a multi-billion euro industry.

There's nothing to stop them doing this but generally they don't do it.

In your example above, a bookie may lessen their liability but it also lessens potential profit. If the larger companies (Hills, Lads, PP etc, etc) engaged in hedging like that then they wouldn't post the profit figures they do. What you're suggesting is that a bookmaker is nothing but a company dedicated solely to arbitrage which is not true.

Mellor

ModeSkeletor wrote: »

If for example (the man utd match for arguments sake) - they were after taking in €2 million on the man utd win at 1.80, (resulting in a €1.6 million loss to them if man utd win), what is to stop them going to the exchanges and hedging say €1.4 million of this? Meaning they would only take a €200,000 hit in the event of a man utd win.

Because if Man Utd lost, they would pay out on the hedging, plus any bets against man Utd, which would reduce their profits from the 2mil they took.

What you are suggesting would in fact only scale down the money involved, its generally bad from a large bookies point of view as there as all bets are +EV from their point of view. The larger bookies will risk a liability as they can take the hit, the net EV from the bet is greater without the hedging.

PP also take more on on irish international sports bets than other bookies, but the prices have to remain consistant to avoid a dutch book situation across a number of bookies, in that situation. In a shock irish win win here PP could easily take a hit, as they would have more money on the irish side (without prices asjusted), but they are willing to run it out as more often than not they wouldn't lose out.

Bluetonic

63587614 wrote: »

If they don't have any liabitity how is it so that some bookmakers get cleaned out and closed down.

What bookies are these?

With regards to the hedging, William Hill for example have their terminals linked into Betdaq terminals to lay off any big exposure automatically. It's a done thing, simple as that. The degree to which it's done is unknown and is a varying thing.

Mellor

Bluetonic wrote: »

What bookies are these?

With regards to the hedging, William Hill for example have their terminals linked into Betdaq terminals to lay off any big exposure automatically. It's a done thing, simple as that. The degree to which it's done is unknown and is a varying thing.

nobody said that it was never done,
we just disputed thestatement that is was always done.

Bookies sometimes carry a liability when there is far more value in it,
and because they sometimes have a liability, they sometimes take a hit

Bluetonic

Mellor wrote: »

nobody said that it was never done,
we just disputed thestatement that is was always done.

I missed who said it was always done.

ArmaniJeanss

63587614 wrote:

If they don't have any liabitity how is it so that some bookmakers get cleaned out and closed down..

Bluetonic wrote: »

What bookies are these?

Its definitely happened. There was a run of them in the early90s at the start of the Internet betting boom.

Generally they were badly run, with expensive advertising campaigns in the trade papers, betting to too low percentages on major events, offering silly each way terms in golf events, overgenerous bonuses for opening accounts etc. They weren't helped that the major bookies deliberately made it awkward for them to hedge liabilities and Flutter.com was the only active exchange with minimal liquidity.(there wasn't always a Betfair!!).

It got to the stage that the RacingPost and SportingLife refused to take advertisements from certain online bookies as they recognised that they were going to go busto and wished to protect their customers (and possibly themselves).

I'm not 100% sure of any names and don't want to guess for libel reasons, but there was at least 4 in the space of a year in the early 90s.

wb

Bluetonic wrote: »

What bookies are these?

With regards to the hedging, William Hill for example have their terminals linked into Betdaq terminals to lay off any big exposure automatically. It's a done thing, simple as that. The degree to which it's done is unknown and is a varying thing.

John McCririck is a famous example of a bookie going broke!

Mellor

Also in the early days of online, it was much easier to spot flaws, and flaws were more common,
these days, there might be a mistake once a month

Raskolnikov

ArmaniJeanss wrote: »

They weren't helped that the major bookies deliberately made it awkward for them to hedge liabilities and Flutter.com was the only active exchange with minimal liquidity.(there wasn't always a Betfair!!).

Flutter itself went bust because it started using its own money to increase liquidity in the exchange.

NewApproach

Raskolnikov wrote: »

Flutter itself went bust because it started using its own money to increase liquidity in the exchange.

Flutter didn't go broke, they merged with Betfair

wb

NewApproach wrote: »

Flutter didn't go broke, they merged with Betfair

Betfair took over their customers when they were on their knees, and found to be seeding the markets with customers' money.

Mellor

NewApproach wrote: »

Flutter didn't go broke, they merged with Betfair

Dfine merged, sold for $1, = broke

Culchie

Bluetonic wrote: »

What bookies are these?

With regards to the hedging, William Hill for example have their terminals linked into Betdaq terminals to lay off any big exposure automatically. It's a done thing, simple as that. The degree to which it's done is unknown and is a varying thing.

I always wondered how it was possible for the odds to be updated so quickly, and so accurately on betfair.

e.g X golfer has a 3 shot lead on the 18th tee and is 1.02 to win, he puts it out of bounds and all of a suddden he's 2.00 or more, and not only that all the other markets are updated instantaneously (there good be 6 or 7 different markets affected by the same player)

So all the bookies are linked in automatically?

punchestown

I think you will find that is the result of somebody betting live at an event while joe public bets on betfair with the aid of delayed tv coverage! I am watching the snooker at moment and the bbc must be about 6 secs behind real time as the market moves just as the player strikes to miss a pot.

wb

I was doing a bit of work at Punchestown, and we had live feed into the van (pretty much instant). We also had ATR and I timed it. It was a massive eight seconds behind. Anyone at the track, with a live feed, or even with SIS is at a huge advantage. I don't think I'll bet in running any more after witnessing the delays first hand.

Collie D

punchestown wrote: »

I think you will find that is the result of somebody betting live at an event while joe public bets on betfair with the aid of delayed tv coverage! I am watching the snooker at moment and the bbc must be about 6 secs behind real time as the market moves just as the player strikes to miss a pot.

So the git with the phone who cost Perry the matchwas on Betfair mobile?

punchestown

what happened collie d?

punchestown

wb wrote: »

I was doing a bit of work at Punchestown, and we had live feed into the van (pretty much instant). We also had ATR and I timed it. It was a massive eight seconds behind. Anyone at the track, with a live feed, or even with SIS is at a huge advantage. I don't think I'll bet in running any more after witnessing the delays first hand.

I would love to know who is gaining the advantage on course at the irish tracks. I have dabbled myself using two seperate formats; lap top with 3 wireless connection and betfair mobile on phone. They are not quick enough. So what are the pros using?
And as for anyone using atr pics to bet in running! dear god!

wb

punchestown wrote: »

I would love to know who is gaining the advantage on course at the irish tracks. I have dabbled myself using two seperate formats; lap top with 3 wireless connection and betfair mobile on phone. They are not quick enough. So what are the pros using?
And as for anyone using atr pics to bet in running! dear god!

Were you using a bot at all? If you're using the normal betfair screen, it's pointless. You'd want betangel or betting assistant at the very least.

MarkOShea

Punchestown, I'd say you'd nearly want to be on the phone relaying the info back to someone on a wired connection somewhere.

Mellor

In-running at races is very harfd to get an edge,
events like soccer matches, are much easier to exploit an edge

Howjoe1

Bluetonic wrote: »

What bookies are these?

With regards to the hedging, William Hill for example have their terminals linked into Betdaq terminals to lay off any big exposure automatically. It's a done thing, simple as that. The degree to which it's done is unknown and is a varying thing.

Innocent question, when I signed up to betdaq as an ordinary joe soap, I had to do the usually anti money laundering stuff and confirm that I was not a bookmaker. I assumed that the latter part was on the basis that bookmakers were strictly barred? although a glance at the sums of money and exchanges per event clearly shows it is saturated with bookies.

On a seperate matter, i know bookies try to operate a 110% book on racing and maybe 150% book on golf events.

But for match odds on a football game, they appear to operate a 100% book! So how do they make their edge? do they lay in running ? For an example, look at the match odds for tomorrow's UEFA Cup final,

Crumbs

Howjoe1 wrote: »

But for match odds on a football game, they appear to operate a 100% book! So how do they make their edge? do they lay in running ? For an example, look at the match odds for tomorrow's UEFA Cup final,

If you take the best price available with different bookies you can usually make a book of around 101% but each individual bookie would normally operate a book of between 105% and 110%

Mellor

Howjoe1 wrote: »

But for match odds on a football game, they appear to operate a 100% book! So how do they make their edge? do they lay in running ? For an example, look at the match odds for tomorrow's UEFA Cup final,

Are you sure you worked it out correctly?

Football books are generally in the 105-110%, depending on the bet type,
handicapps are generally at the 105% end, with the matches outright closer to 100%

I had a look at the UEFA Cup. its a 108% book on Paddy power

ArmaniJeanss

Howjoe1 wrote: »

Innocent question, when I signed up to betdaq as an ordinary joe soap, I had to do the usually anti money laundering stuff and confirm that I was not a bookmaker. I assumed that the latter part was on the basis that bookmakers were strictly barred? although a glance at the sums of money and exchanges per event clearly shows it is saturated with bookies.

As I understand it the declaration is for tax reasons - as we know gambling winnings for you or me are tax-free as we are just punters. If however we are licensed bookmakers then any profits we make on the exchanges are liable to tax.

Howjoe1

Mellor wrote: »

Are you sure you worked it out correctly?

Football books are generally in the 105-110%, depending on the bet type,
handicapps are generally at the 105% end, with the matches outright closer to 100%

I had a look at the UEFA Cup. its a 108% book on Paddy power

the likes of betfair's book for the CL Final is just below 101%

PP have 110% book. how do the exchanges make any edge with that small a margin?

ArmaniJeanss

Howjoe1 wrote: »

the likes of betfair's book for the CL Final is just below 101%

PP have 110% book. how do the exchanges make any edge with that small a margin?

You misunderstand the concept of exchanges, I think.
They don't make money on the %overround, they take a commision (2-5%)from each winning bet. So if the book is 80% or 140% it doesn't make any direct difference to them.
Its the exchange punters who have the problem of trying to make a profit within the confines of a 99-101 lay-back book (+ commission).

Howjoe1

ArmaniJeanss wrote: »

You misunderstand the concept of exchanges, I think.
They don't make money on the %overround, they take a commision (2-5%)from each winning bet. So if the book is 80% or 140% it doesn't make any direct difference to them.
Its the exchange punters who have the problem of trying to make a profit within the confines of a 99-101 lay-back book (+ commission).

thanks for the informative reply. While I understand that the exchange makes it's money on commissions, is it not feasable for someone laying all in a football match to expect to achieve something greater than a 101% book ?

ArmaniJeanss

Howjoe1 wrote: »

is it not feasable for someone laying all in a football match to expect to achieve something greater than a 101% book ?

Unfortunately not.
Lets say I think TeamA should be 5/1.
So I put up 5.5 on Betfair (9/2) to give myself a margin.
10 minutes later someone else will put up 5.6.
Then some gob****e will put up £10 at 5.8 and someone else will put up £2 at 5.9.
So on almost every decent market you end up with the lay side at 99% and the backing side at 101% (though the real money will often be around the 103% mark (and 97% on lay side).

Howjoe1

ArmaniJeanss wrote: »

Unfortunately not.
Lets say I think TeamA should be 5/1.
So I put up 5.5 on Betfair (9/2) to give myself a margin.
10 minutes later someone else will put up 5.6.
Then some gob****e will put up £10 at 5.8 and someone else will put up £2 at 5.9.
So on almost every decent market you end up with the lay side at 99% and the backing side at 101% (though the real money will often be around the 103% mark (and 97% on lay side).

thanks again, you know your stuff. sounds like i have a better chance backing all at the better odds on offer than trying to lay them all ?

wb

The best way to understand betfair is like this...

Think of two guys sitting at a bar watching a football match. One guy thinks Chelsea will win, the other thinks United will win. They decide that they want to have a bet.

When they agree the odds, the barman holds the money until the match is over. Afterwards, the barman takes a small cut from the winner for his trouble.

Betfair is like the barman in the above story.

Collie D

wb wrote: »

The best way to understand betfair is like this...

Think of two guys sitting at a bar watching a football match. One guy thinks Chelsea will win, the other thinks United will win. They decide that they want to have a bet.

When they agree the odds, the barman holds the money until the match is over. Afterwards, the barman takes a small cut from the winner for his trouble.

Betfair is like the barman in the above story.

Nice explanation.