Thinking about starting an exchange.

[tachi]

countless have tried opening an exchange, 99% have failed. it's all about liquidity: to atract customers to place bets, there need to be offers. to get offers, you need customers. since a start-up won't have any customers, it's a circle you can't break out of, and will make the operation fail every single time, unless you make the offers yourself.
in other words, it's necessary to continually seed an enormous amount of markets with your own money and make sure the odds offered in these markets are better than the prices offered by books. a concept that exchanges often don't seem to get: why bet with them if there are better prices elsewhere. the exchange might say: but you can make your own offer and get better prices that way, isn't that great!! every bettor knows, or will find out within minutes, you'll never get matched at any exchange other than betfair on a regular basis unless your odds are way off and therefore they won't offer anything until they're paid to do it or there are enough other customers online to match them (which is hardly ever the case at any exchange with the exception of Betfair).

anyway, you'll have to swallow both operational and betting losses first either seeding markets yourself or subsidizing others to seed for you before you'll have any customers willing to bet with you consistently, let alone a critical mass of customers big enough to cover your costs.
once you're past that initial stage though, but you'll likely never get there, you can sit back and watch the money come in. Raise commission, do whatever you want, now the catch 22 of liquidity being provided is working for you, instead of against you. People are relying on your platform and make offers amongst themselves all the time because they know if the price is reasonable they'll get action. Only one exchange has made it to that stage, and that's Betfair. All others are either somewhere in between basically looking like they won't make it (matchbook wbx betdaq), or are long gone (and there were dozens in Europe who failed).

To make a long story short, unless you have very very deep pockets and are willing to invest everything that's in those pockets, I wouldn't do it.

very good post.I'll add only the most important thing that made Betfair super big-the aggressive marketing.
Since the beginning they advertised not only on the internet,but also in all Europe,TVs,etc.Plus
they offered a 30€ bonus just like the usual european bookmakers,but without country restrictions for bonus eligibility.It was evident they lose a lot from their sign up offers (being an exchange) ,but it worked to attract customers.
They replied to every stupid e-mail asking what is an exchange,what is back and lay,etc.

[durito]

Matchbook is close to worthless to the majority of advantage gamblers. Other than making close to 0EV hedges, what does it actually offer?

except for fishhead

[bookie]

PLEASE DO PROPS. you can make your own props up with no risk

no other site would have it, and ppl would be talkign about it all the time on boards

Why would you think this? Matchbook has props up and rarely does someone put up an offer.

[katstale]

I wish people wouldn't tease me like this with talk of another good exchange. It's almost like a 5 dimes thread without any Tony quotes.

[jjgold]

I do not play at exchanges but if Blackie is behind it I know it is real safe and you will get paid real fast

I will PLAY THERE

[byronbb]

obviously you've not played at exchanges much?

market depth is essential information and makes the exchange tick .. without that turnover would be crap by comparison

could you imagine a stock exchange not having that information readily available?

You mean like a dark pool?

[Santo]

Matchbook is close to worthless to the majority of advantage gamblers. Other than making close to 0EV hedges, what does it actually offer?

They were far more useful under their old commission structure, I'm not betting at the moment (taking spring/summer off until football whilst I relocate etc), but even last football season I was probably giving them 0.5-1% of the volume I used to.

[TomG]

Currently, Matchbook requires all offers be held in reserve. This is a colossal waste of player funds. It's also entirely unnecessary and hurts potential liquidity.

Allow players to make offers on "margin." For example, suppose a player has $1,000 in his account. Allow him to make a series of offers that in total exceed his $1,000 balance. When an offer is accepted, deduct the matched amount from his available balance. As long as his largest offer is less than his current available balance, allow all of his offers to stand. If the available balance falls below the largest offer, issue a "margin call" and automatically reduce the size of the largest offer.

Everyone would benefit from the added liquidity/flexibility without the exchange having to extend any credit beyond available balances.

[aca]

Currently, Matchbook requires all offers be held in reserve. This is a colossal waste of player funds. It's also entirely unnecessary and hurts potential liquidity.

Allow players to make offers on "margin." For example, suppose a player has $1,000 in his account. Allow him to make a series of offers that in total exceed his $1,000 balance. When an offer is accepted, deduct the matched amount from his available balance. As long as his largest offer is less than his current available balance, allow all of his offers to stand. If the available balance falls below the largest offer, issue a "margin call" and automatically reduce the size of the largest offer.

Everyone would benefit from the added liquidity/flexibility without the exchange having to extend any credit beyond available balances.

This and no infos about matched money are two main downgrade "features" MB against Betfair!

[jackkkk2009]

no doubts. matchbook would be the best choice in the industry. betfair is a little dangerous. coz they confiscate your funds without any reason.

[BLACKIE]

I wish people wouldn't tease me like this with talk of another good exchange. It's almost like a 5 dimes thread without any Tony quotes.

No teasing here. I will be concluding some meetings over the weekend and if all goes well may have a blueprint for an exchange.

[SPECULATOR 13]

HI BLAKIE,

You ask if the market would support another exchange?
Without a doubt!
BOOKMAKER tried to start a exchange called BETMAKER.Everyone who loved the exchanges(myself incl.) was exited to no end at the prospect of having another source than MATCHBOOK,because they have been having some problems lately.However bookmaker didn't bother to do anything to get betmaker going as matter of fact they did everything for it to fail or at best be ignored.I red on peepplace that bookmaker folded betmaker about a week ago.

But Matchbook is POORLY managed and Rebatewager Group is greatly managed with high skilled people, if they get into exchange business they can make it work well.

If what GOLD say is true you will definitely succeed because they are a whole lot of people out there whom have been schooled over the past little while in the security and piece of mind provided by exchange betting.You do not have to worry about being collard when you win or cut-off after a major losing streak trying to get back and go forward.Betfair as taken over the euro market but aside for matchbook we do not have any alternative on this side of the pound.Offer the same commission as matchbook,have a great customer service like PINNACLES, the Back/Lay options of the Euro exchanges,ADVERTISE ALL OVER THE INTERNETwith bonuses to attract the bonus whores,make it easy for people all over the world to found their account and withdraw their money,provide a 800 or toll free number(s),and maybe be willing to lay your own money as someone mention earlier to match the bets in order to get the ball rolling by showing liquidity and CHA-CHING!!!
I really hope BLAKIE that you will get the exchange off and running for week 1 of the NFL
Good luck old chum

[Flying Dutchman]

Is this happening?

[HeeeHAWWWW]

Plenty of room to grab marketshare off betfair, with their greedy commission + premium charge.

The problem is simple though: how to reach the critical liquidity? Betdaq seem perpetually stuck in a limbo zone.

[pokernut9999]

As Blackie stated earlier he has some players in his VIP club that have the money to bring liquidity.
If he thinks he can make it work he will , Blackie is a smart man .

[BLACKIE]

Had some interesting conversations over the last week and it looks like we will be moving forward. Should have an outline and project plan put together by the end of next week and we feel we could have an NFL pit up and running for this year.

[Naz18]

That sounds great..

[Climate]

Do it. Sounds great.

[Cougar Bait]

Blackie, in case you missed it...

[katstale]

If u need to borrow my tech guy to beta test--let me know.

[flyingillini]

Blackie, in case you missed it...

Now give this man his freeplay!

[Cougar Bait]

Now give this man his freeplay!

Points is better as I deal with a local currently...

Thanks for the tout there Illini...you're the man

[SPECULATOR 13]

Had some interesting conversations over the last week and it looks like we will be moving forward. Should have an outline and project plan put together by the end of next week and we feel we could have an NFL pit up and running for this year.

[BLACKIE]

Blackie, in case you missed it...

Thanks cougar unfortunately this iPad touch doesn't have flash so I'll have to check it out later as I am traveling today. Pm your contact info to me as I think we might be able to use a man of your skills for some of our viral marketing stuff later this year.

[BLACKIE]

If u need to borrow my tech guy to beta test--let me know.

Thanks but we should be fine a long time player from my VIP book just sold an electronic trading program for a shit load of cash and it looks like we'll be able to use his programmers to build this. Will definitely be. Looking for input and feedback to fine tune the product before it launches.

[Raleigh77]

Interesting.

[flyingillini]

I can view SBR.TV from my Ipad but not from my Iphone.

[BLACKIE]

I can view SBR.TV from my Ipad but not from my Iphone.

I can't. Do I need to do something in the settings?

[flyingillini]

I can't. Do I need to do something in the settings?

Not sure guey, when I first got it, SBR was the first site I went to and I tried to watch a video on SBR.TV. It worked fine. Not from the Iphone though. Someone on here might know the answer though. Orale guey! Sureno Vida!

[Cougar Bait]

Thanks cougar unfortunately this iPad touch doesn't have flash so I'll have to check it out later as I am traveling today. Pm your contact info to me as I think we might be able to use a man of your skills for some of our viral marketing stuff later this year.

Sent. Let me know what you're looking for and we will talk.

[flyingillini]

SBR hasn't offered Cougar a job yet but Blackie has! Good work Cougar! Congrats Buddy!

[sportsbetwin]

Copy Betfair and educate on how to lay.
Betfair is the best PR book out there and they teach people how to use it.
Matchbook is a good concept but it could be so much more.

[jjgold]

Betfair has masterminded the exchange business

Matchbook has not

Blackie and his team will

Look forward to it

[shari91]

SBR hasn't offered Cougar a job yet but Blackie has! Good work Cougar! Congrats Buddy!

How awesome is that???? Great catch Blackie and congrats Coug!

[mtneer1212]

Blackie,

As an IT engineer in real life, I have a few suggestions to apply when rolling out this great venture. And by the way, this is an excellent idea!

1. Before rolling it out to open the NFL season, roll out a BETA test model in June/July and use interested parties on this forum, like myself, Fishhead, JJ, Flying Illini, etc..... to test it thoroughly using baseball. Reward Beta testers with an added sign-on bonus when you open up shop for football. This way you can get the kinks worked out in advance, and get feedback on the interface, etc....... Plus you can get a buzz started early.

2. You must get it advertised and out there. I believe a great name for your new venture would be "The Black Market", in honor of you...

3. You may need to seed it early with liquidity on both sides, until the customers come running in. Maybe also some freebies to get people to sign up, get used to it, much like you did with your $250 free promo for RebateWager and Blackdog.

4. You absolutely need an interface that people will understand in two minutes. It takes a while to understand Matchbook, and before all of you tell me how matchbook is easy, remember it is the small-timers that keep a book liquid, not pros like yourself. And if they don't get it, it will fail.

5. Football and Baseball Playoffs would be excellent to start this venture with in September.

You have an opportunity here, Blackie, to take a big market share by doing something special. The key however, is getting it right from the start. If it looks poorly designed from the start, it may will kill the whole venture. Please, please use BETA testers. If you need any help on how to do Betas, and how to get good feedback, feel free to contact me, and I will work with you and your team to get it done right.