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I thought the same thing, and that's typically how pari-mutuel betting works (horsetracks, Jai-Alai, etc). But if some whale comes in and wants to drop a large
by joezydeco 1y ago
I thought the same thing, and that's typically how pari-mutuel betting works (horsetracks, Jai-Alai, etc).
But if some whale comes in and wants to drop a large bet, I suppose the house doesn't want to sit around and wait for the same amount of action on the other side before they take the bet or the game starts. And now they're exposed if the whale wins.
- deleted 1y ago[deleted]
- natmaka 1y agoAFAIK in a pure 'parimutuel' setup ( https://en.wikipedia.org/wiki/Parimutuel_betting https://en.wikipedia.org/wiki/Parimutuel_betting ) the house is never exposed, and if this holds I see no reason for someone understanding this to place a non-parimutuel bet.
- bartread 1y agoNo, let's say I bet £100[0] on an exchange. That doesn't guarantee the bet will be matched. Maybe only £10 of my bet is matched. And it's the counterparty or counterparties to the bet that are on the hook, not the exchange. I.e., it works much like a marketplace for other financial instruments, and the situation I'm describing is much like a "partial fill" on a stock order. The exchange takes its commission on the matched value of the bet no matter what, and they don't care which way it goes. [0] I'm using small numbers because the total value of matched bets on many horse races can be small. If you go in and drop £100k or £10k, or even £1k, especially if you did it all in one go (and assuming the exchange would allow it), there are plenty of races where only a tiny portion of that would be matched. In fact most races have only thousands of pounds or low five figures matched.