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There are betting exchanges where the platform charges a commission but doesn’t care if you win or lose.

bryanrasmussen 1y ago
How can it not care if you win? They still have to pay out correct? Do they then limit the maximum payout that can be expected? I don't know as I don't bet but it seems counter-intuitive that just charging a commission would change the dynamic.
- koolala 1y ago
  Aren't the payouts purely user funds so they aren't actually risking anything? They do charge commission.
  - bryanrasmussen 1y ago
    If that were the case though they would be prone to the same problems that any bookie is, an upset where a few high bets wipe everything out.
    - bluecalm 1y ago
      It's an exchange. You offer to bet X and wait for a matching offer. If no one wants to bets that much your order waits in a queue - same as on a stock market. There is 0 risk for the exchange and the bettors can only use what they put in front. Bookies run some risk because they accept the bet first and try to hedge (or got more people to bet on the other side) later. The exchange doesn't have this problem. Exchange doesn't even need to charge commission cause they make money on float.
- stonesam92 1y ago
  The exchange is not taking the other side of the bet; they're just matching you up with another user who wants to take the opposite position to you and then taking a fee for providing that service.
  - bryanrasmussen 1y ago
    OK makes sense, thanks for clarification. on edit: so the problem is that of course the other user can default, but that is not the exchange screwing with you because it is to their benefit.
    - eterm 1y ago
      The other user can't default, the money is all put in up-front.
  - bluGill 1y ago
    The problem I you compete with other exchanges and so need to compete on odds or customers go elsewhere. If there is an imbalance in your system because the favored home team has more people on you platform (or someone else has extra of the unfavored team and so has better odds) you take the losing side just to keep the customers and then pay out when you lose. the above is much less likely if you are national, but there may be small competitors with an advantage live this you are trying to compete with
    - kgwgk 1y ago
      > If there is an imbalance in your system That’s what the moving price / odds is for, to rebalance the willingness to take both sides of the bet.
      - bluGill 1y ago
        Now your costomers go elsewhere fori the better odds and don't come back.
        kgwgk 1y ago
        A restaurant won’t start selling clothes because if they don’t the customers will go elsewhere to buy clothes and they won’t come back. A stock exchange won’t start holding a book of shares to give “better” prices to customers. What would that even mean? If the price is better for the buyer it will be worse for the seller! (If you mean that they will buy for a high price and sell for a low price to keep all customers happy maybe the customers won’t go anywhere but the “exchange” will go bankrupt.) Why would a betting exchange be different? Does Betfair for example act like you suggests or is it just something you’re imagining?
Loocid 1y ago
Not as much as traditional bookmakers but they absolutely care. Betfair has a "premium charge" where if you earn over a certain amount in a year, you get charged a fee equal to a % of your gross profit. Its the same as poker. An exchange wants a bunch of equally skilled players betting against each other. If everyone has zero edge, all the money stays on the exchange betting over and over and the money eventually all goes to the exchange in commissions. Players with a strong edge dramatically reduce the time before the losing players run out of money, meaning less commissions for the exchange.
- piltdownman 1y ago
  If you earn over a certain amount in a year, and are categorised as a deriving your majority income from gambling in a 0% tax Territory (Austria, Australia, Belgium, Bulgaria, Canada, Czech Republic, Denmark, Finland, UK/Ireland etc...), you can offset the % charged as an expense. FWIW, an exchange doesn't necessarily want a bunch of equally skilled players betting each other, they want a lopsided book on the bigger markets to attract domestic bookies and match-makers laying or staking across multiple platforms to leverage Matched betting discrepancies on promotions for new players etc... //Players with a strong edge dramatically reduce the time before the losing players run out of money, meaning less commissions for the exchange. Poker Players with a strong edge have a +ev Variance. Over 100 hands they're not guaranteed to be a winner. Over 10,000 hands they are. YMMV massively in other sports, but for horse racing the big gamblers tend to only put down big money once or twice a year on maidens and trial-runners for Cheltenham or Grand National. They wouldn't touch a big festival other than for fun.

How can it not care if you win? They still have to pay out correct? Do they then limit the maximum payout that can be expected? I don't know as I don't bet but it seems counter-intuitive that just charging a commission would change the dynamic.

koolala 1y ago
Aren't the payouts purely user funds so they aren't actually risking anything? They do charge commission.
- bryanrasmussen 1y ago
  If that were the case though they would be prone to the same problems that any bookie is, an upset where a few high bets wipe everything out.
  - bluecalm 1y ago
    It's an exchange. You offer to bet X and wait for a matching offer. If no one wants to bets that much your order waits in a queue - same as on a stock market. There is 0 risk for the exchange and the bettors can only use what they put in front. Bookies run some risk because they accept the bet first and try to hedge (or got more people to bet on the other side) later. The exchange doesn't have this problem. Exchange doesn't even need to charge commission cause they make money on float.
stonesam92 1y ago
The exchange is not taking the other side of the bet; they're just matching you up with another user who wants to take the opposite position to you and then taking a fee for providing that service.
- bryanrasmussen 1y ago
  OK makes sense, thanks for clarification. on edit: so the problem is that of course the other user can default, but that is not the exchange screwing with you because it is to their benefit.
  - eterm 1y ago
    The other user can't default, the money is all put in up-front.
- bluGill 1y ago
  The problem I you compete with other exchanges and so need to compete on odds or customers go elsewhere. If there is an imbalance in your system because the favored home team has more people on you platform (or someone else has extra of the unfavored team and so has better odds) you take the losing side just to keep the customers and then pay out when you lose. the above is much less likely if you are national, but there may be small competitors with an advantage live this you are trying to compete with
  - kgwgk 1y ago
    > If there is an imbalance in your system That’s what the moving price / odds is for, to rebalance the willingness to take both sides of the bet.
    - bluGill 1y ago
      Now your costomers go elsewhere fori the better odds and don't come back.
      - kgwgk 1y ago
        A restaurant won’t start selling clothes because if they don’t the customers will go elsewhere to buy clothes and they won’t come back. A stock exchange won’t start holding a book of shares to give “better” prices to customers. What would that even mean? If the price is better for the buyer it will be worse for the seller! (If you mean that they will buy for a high price and sell for a low price to keep all customers happy maybe the customers won’t go anywhere but the “exchange” will go bankrupt.) Why would a betting exchange be different? Does Betfair for example act like you suggests or is it just something you’re imagining?

Loocid 1y ago

Not as much as traditional bookmakers but they absolutely care. Betfair has a "premium charge" where if you earn over a certain amount in a year, you get charged a fee equal to a % of your gross profit. Its the same as poker. An exchange wants a bunch of equally skilled players betting against each other. If everyone has zero edge, all the money stays on the exchange betting over and over and the money eventually all goes to the exchange in commissions. Players with a strong edge dramatically reduce the time before the losing players run out of money, meaning less commissions for the exchange.

piltdownman 1y ago
If you earn over a certain amount in a year, and are categorised as a deriving your majority income from gambling in a 0% tax Territory (Austria, Australia, Belgium, Bulgaria, Canada, Czech Republic, Denmark, Finland, UK/Ireland etc...), you can offset the % charged as an expense. FWIW, an exchange doesn't necessarily want a bunch of equally skilled players betting each other, they want a lopsided book on the bigger markets to attract domestic bookies and match-makers laying or staking across multiple platforms to leverage Matched betting discrepancies on promotions for new players etc... //Players with a strong edge dramatically reduce the time before the losing players run out of money, meaning less commissions for the exchange. Poker Players with a strong edge have a +ev Variance. Over 100 hands they're not guaranteed to be a winner. Over 10,000 hands they are. YMMV massively in other sports, but for horse racing the big gamblers tend to only put down big money once or twice a year on maidens and trial-runners for Cheltenham or Grand National. They wouldn't touch a big festival other than for fun.