Via Dave, BetFair:
Changes to Betfair’s bet matching logic – update
Betfair Customer Services 19 Mar 10:47
We’ve been trialling a new process for matching customer bets recently which has prompted considerable debate among some of our customers. Some of that debate has been misinformed and we apologise for that. It is clearly our responsibility to ensure customers are given a clear understanding of what we are actually doing and, hopefully, this comprehensive communication and the forum Q&-A today will help explain what is happening.
The purpose of the recent change is to increase a customer’s chance of getting a bet matched. However, we recognise that the change we’ve made has been the subject of concern for some customers. In response to customer feedback, we will suspend matching bets across selections when an applicable market is turned in-play. For the time being, bets will be matched on in-play markets as they were prior to the change. Matching across selections will be reintroduced only when we can offer best execution or its equivalent. As we have explained before, the new bet matching process does not affect any Horse Racing markets.
Until recently Betfair’s bet matching process would only look to match customer back bets against lay bets on the same selection in the same market. There are often circumstances where we could improve on that, for example, where we have customer back bet requests on all selections but no suitable lay bets to match them against.
In the past those requests would have been initially unmatched, and may or may not have been subsequently matched by other customers. When Betfair first started, we used to perform this additional cross-matching service for customers. This was suspended in 2002 for purely technical reasons – we didn’t have a mechanism for matching across selections without having a negative impact on the performance of the site.
Betfair’s bet matching process is now more efficient and that allows us to reintroduce this functionality. Whilst leaving the existing logic that matches backs vs. lays unchanged, we’ve added functionality that matches bets across runners ONLY if those bets could not have been matched conventionally. At the moment, that doesn’t give us the option of providing a price improvement even where this would be theoretically possible. This is because matching across selections only happens after the conventional matching process that allows us to improve prices has completed.
We are working towards having a bet matching process in place that both allows customers to see the best prices they could have a bet cross-matched at, and to provide a price improvement where this is possible. However, that’s technically much more complex because it requires significant changes to the process that matches backs vs. lays. Understandably, before we could implement that there’s also a significant amount of testing required, both to ensure that the functionality works as expected and to ensure that the performance of the site isn’t affected, and this is taking longer than anticipated.
Clearly if bets are matched where a price improvement would theoretically be possible, but which the current process can’t provide, then matching those bets will result in Betfair accruing the difference. There’s been speculation that the motivation for the change is the short-term additional revenue for Betfair that not being able to provide price improvements would cause. That isn’t the case. The model for Betfair’s betting exchange remains to match customer bets where possible, to provide price improvements where possible, and to charge a commission on winning positions. The motivation for introducing this change is to make it easier for customers to get bets matched, and to reduce the load on the site by making it pointless for customers who use automated tools to bombard the site with traffic looking for arbitrage opportunities.
However, because we’re not currently in a position where we can improve prices when matching across selections, and to clearly demonstrate that the motivation for the change is to improve customers’ chances of having bets matched rather than any short-term profit, we’ve decided to make the following changes:
1. We have suspended, with immediate effect, matching bets across selections for in-play markets until best execution – or its equivalent – can be implemented.
2. We will shortly reintroduce bet matching across selections but ONLY where bets have been requested at prices that we couldn’t improve even if best execution was in place.
e.g. if a customer requests 2.0 to back a tennis player, and another requests 2.0 to match his opponent we will match those bets. However if we have customer requests to back those two players at 1.99 and 2.0 respectively we will not match them. Those bets will remain unmatched.
3. In the near future we will introduce functionality that both displays prices that could be matched across selections and matches them providing a price improvement wherever possible.
In every case, we will communicate any proposed change in advance of it being introduced onto the site.
Your feedback on this issue has been much appreciated and we continue to welcome your comments via the forum, our helpdesk or directly with members of our staff.
While the forum Q&-A is to answer questions specifically related to this topic we will hold regular forum Q&-A sessions covering a much wider range of topics in the very near future.
Sounds great.
Any thoughts, folks?
They didn’-t clear up the issue of how and when BetFair operates on its own markets, though.
[See this post for more on “best execution”.]
Well, firstly, it is self-evident that Betfair are not suspending part of the process just for the good of their health.
Congratulations are therefore due to all of those who stood up and were counted; vis a vis pointing out the inequity of the system. As to those that rushed to praise the new system; perhaps you need to brush up on your knowledge of how Betfair works.
"There’s been speculation that the motivation for the change is the short-term additional revenue for Betfair "
Indeed, and rightly so ..the goal of any exchange is to increase the number of orders that are put through it, so as to increase revenue.
Betfair is not a charitable organisation and does not behave like one; the goal of this process, was to increase revenue.
People power has brought about a climbdown…a first amongst many, we hope.
There are other issues still connected to the best matching that we shouldn’t overlook which will potentially be the biggest earner for Betfair from the new matching system and be irrefutable proof they are indeed acting as the layer on their markets. Sadly I didn’t pick up on it to start with but a forum user called Devils Advocate.
In it’s simplest form, if we consider a 3 runner market with no offers up, A B & C. If two separate players back teams A & B for ?100 at 2 Betfair will now match them up under bet matching also implementing best price matching i’e the back of A can be treated as a lay of B fully matching it. OK fair enough if either A or B go on to win the event but what happens if C now wins ? Both backers have lost and effectively Betfair have acted as the layer of both bets with a no risk situation.
Even though this appears theoretical as there will most likely be offers on board for C which would come into play with the best matching this situation does occur on a regular basis on horseracing which just happens to be Betfair’s largest market.
Rab Bibater,
–
Mike Giberson has said that BetFair is going in the right direction. He has looked at the issue carefully. But he has pointed privately some issues that needed to be addressed. And it was said from day one that the rather good opinion of the new BetFair bet matching logic was based on the information available at the time, information which has been updated almost every day from that day.
–
Thanks for all your comments, and I’ll keep the eyes on this issue and publish a post whenever it is necessary…
This move will have happened because the Gambling Commission have asked for explanations as to what on earth is going on, and Betfair have been unable to satisfy them. Its a jumped before they were pushed statement.
There were numerous reliable posts from people who had met Betfair staff with a range of quotes including "Betfair think this is fair game" etcetera.
There is zero doubt that Betfair were operating against their own terms and conditions in mismatching bets (and profiting from trap bets).
Betfair are not the "good guys" for listening to their customers and making the right decision as a result, they will do whatever they can get away with, and have come to the conclusion that they aren’t going to get away with this.
Regulation does need to be brought in to keep them out of their own markets.
Yes, I agree – the next leg of the strategy must be to return to an earlier regulatory position, that NOBODY employed by the owner of an exchange, should be allowed to trade on said exchange. That is the only fair position for all.
[…] – BetFair withdraws / improves its brand-new matching-bet logic, which was (kind of) endorsed by the C… […]
BetFair Q&A:
http://www.midasoracle.org/200…..r-q-and-a/
[…] – BetFair withdraws / improves its brand-new matching-bet logic, which was (kind of) endorsed by the C… […]
[…] – BetFair withdraws / improves its brand-new matching-bet logic, which was (kind of) endorsed by the C… […]
[…] held a forum Q&A session in March in which we announced that we were working on an improved version of bet matching. This would allow us to match bets across selections, and to match those bets at better prices than […]
Well, firstly, it is self-evident that Betfair are not suspending part of the process just for the good of their health.
Congratulations are therefore due to all of those who stood up and were counted; vis a vis pointing out the inequity of the system. As to those that rushed to praise the new system; perhaps you need to brush up on your knowledge of how Betfair works.
"There’s been speculation that the motivation for the change is the short-term additional revenue for Betfair "
Indeed, and rightly so ..the goal of any exchange is to increase the number of orders that are put through it, so as to increase revenue.
Betfair is not a charitable organisation and does not behave like one; the goal of this process, was to increase revenue.
People power has brought about a climbdown…a first amongst many, we hope.
There are other issues still connected to the best matching that we shouldn’t overlook which will potentially be the biggest earner for Betfair from the new matching system and be irrefutable proof they are indeed acting as the layer on their markets. Sadly I didn’t pick up on it to start with but a forum user called Devils Advocate.
In it’s simplest form, if we consider a 3 runner market with no offers up, A B & C. If two separate players back teams A & B for ?100 at 2 Betfair will now match them up under bet matching also implementing best price matching i’e the back of A can be treated as a lay of B fully matching it. OK fair enough if either A or B go on to win the event but what happens if C now wins ? Both backers have lost and effectively Betfair have acted as the layer of both bets with a no risk situation.
Even though this appears theoretical as there will most likely be offers on board for C which would come into play with the best matching this situation does occur on a regular basis on horseracing which just happens to be Betfair’s largest market.
Rab Bibater,
–
Mike Giberson has said that BetFair is going in the right direction. He has looked at the issue carefully. But he has pointed privately some issues that needed to be addressed. And it was said from day one that the rather good opinion of the new BetFair bet matching logic was based on the information available at the time, information which has been updated almost every day from that day.
–
Thanks for all your comments, and I’ll keep the eyes on this issue and publish a post whenever it is necessary…
This move will have happened because the Gambling Commission have asked for explanations as to what on earth is going on, and Betfair have been unable to satisfy them. Its a jumped before they were pushed statement.
There were numerous reliable posts from people who had met Betfair staff with a range of quotes including "Betfair think this is fair game" etcetera.
There is zero doubt that Betfair were operating against their own terms and conditions in mismatching bets (and profiting from trap bets).
Betfair are not the "good guys" for listening to their customers and making the right decision as a result, they will do whatever they can get away with, and have come to the conclusion that they aren’t going to get away with this.
Regulation does need to be brought in to keep them out of their own markets.
Yes, I agree – the next leg of the strategy must be to return to an earlier regulatory position, that NOBODY employed by the owner of an exchange, should be allowed to trade on said exchange. That is the only fair position for all.
[…] – BetFair withdraws / improves its brand-new matching-bet logic, which was (kind of) endorsed by the C… […]
BetFair Q&A:
http://www.midasoracle.org/200…..r-q-and-a/
[…] – BetFair withdraws / improves its brand-new matching-bet logic, which was (kind of) endorsed by the C… […]
[…] – BetFair withdraws / improves its brand-new matching-bet logic, which was (kind of) endorsed by the C… […]
[…] held a forum Q&A session in March in which we announced that we were working on an improved version of bet matching. This would allow us to match bets across selections, and to match those bets at better prices than […]