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I mean, yes, obviously being a bookie where you can set a crazy spread on convoluted bets is more profitable than being an agnostic, fair betting exchange - but

by vkou 1y ago

I mean, yes, obviously being a bookie where you can set a crazy spread on convoluted bets is more profitable than being an agnostic, fair betting exchange - but I was pointing out that even a fair betting exchange has every incentive to kick winners off its platform.

skippyboxedhero 1y ago
The price on most betting exchanges is unbeatable without significant resources (it is set based on Asian books, they will open lines to sharps before betting exchanges list the market). The price on parlays, with the huge spread, is far more vulnerable because there is no large market for these events. Prices for large events are mostly gathered from third parties, parlays will tend to be priced in-house. This is part of the reason why bookmakers control who can bet on what on their site. If they opened parlay line with $100k limit to anyone, they would be bankrupted by the end of the day. The purpose of these bets is to create a product that is exciting for customers and is economic for them to provide...but that requires there to be limit on how much customers can bet. The most profitable product are the handicap markets and point spreads even though the margin for these is usually low single digits. Asian books usually only provide these markets...but the problem is that customers don't like these as much as parlays. The product is entertainment.
aianus 1y ago
Do you think the Chicago Mercantile Exchange kicks out the brokers that make the best futures trades? How is this any different?
- vkou 1y ago
  CME is a bad example, because large market participants actually go there to buy stuff like commodities that they need to keep their businesses going, and many trades are often net-win-win for both parties. (The active trader made a buck, the producer/consumer of the commodity got their goods. They might have preferred getting them at a better price, but they are still net positive from making the trade at the price they got/paid.) The retail day traders trying to play there are, of course, in a win/lose fight.

by vkou 1y ago

skippyboxedhero 1y ago

The price on most betting exchanges is unbeatable without significant resources (it is set based on Asian books, they will open lines to sharps before betting exchanges list the market). The price on parlays, with the huge spread, is far more vulnerable because there is no large market for these events. Prices for large events are mostly gathered from third parties, parlays will tend to be priced in-house. This is part of the reason why bookmakers control who can bet on what on their site. If they opened parlay line with $100k limit to anyone, they would be bankrupted by the end of the day. The purpose of these bets is to create a product that is exciting for customers and is economic for them to provide...but that requires there to be limit on how much customers can bet. The most profitable product are the handicap markets and point spreads even though the margin for these is usually low single digits. Asian books usually only provide these markets...but the problem is that customers don't like these as much as parlays. The product is entertainment.

aianus 1y ago

Do you think the Chicago Mercantile Exchange kicks out the brokers that make the best futures trades? How is this any different?

vkou 1y ago
CME is a bad example, because large market participants actually go there to buy stuff like commodities that they need to keep their businesses going, and many trades are often net-win-win for both parties. (The active trader made a buck, the producer/consumer of the commodity got their goods. They might have preferred getting them at a better price, but they are still net positive from making the trade at the price they got/paid.) The retail day traders trying to play there are, of course, in a win/lose fight.