MATCHBOOK says goodbye to 2% commission...

**Mudcat** · 03-10-09, 10:07 AM

On first read-through, sounds great. Almost seems too good to be true. I am left with a, "What's the catch?" feeling.

I guess my one big question right now is (and forgive me if I am missing something obvious - I am still waiting for my first coffee of the day to kick in): how does volume fit into this? I understand the 1.0%/-0.2% commissions but it kept talking about how it is volume based. Are those only going to apply to certain sized bets or to people who play a certain amount of overall action?

But again, my gut reaction here is, fantastic!

**bigugly** · 03-10-09, 10:20 AM

I'm not done processing this either....actually I'm in class on 4 hours of sleep.

I think the volume based reference is only referring to how much volume you bet instead of the net win. (scalping) Previously, if you bet on both sides you could pay 0 commission if the bets offset each other.

Not to mention that you aren't simply charged commission on winnings but on every bet you match, and then only on the lower of the risk/win amounts.

**guy9bundes** · 03-10-09, 10:27 AM

Originally posted by Mudcat

On first read-through, sounds great. Almost seems too good to be true. I am left with a, "What's the catch?" feeling.

I guess my one big question right now is (and forgive me if I am missing something obvious - I am still waiting for my first coffee of the day to kick in): how does volume fit into this? I understand the 1.0%/-0.2% commissions but it kept talking about how it is volume based. Are those only going to apply to certain sized bets or to people who play a certain amount of overall action?

But again, my gut reaction here is, fantastic!

The fee is applied to the LESSER of the "bet" or "to win"
amounts. So if you bet $500 to win $100, the fee is based on 1% x $100.
Similarly, if you bet $100 to win $500, the fee is the same 1% x $100.

same thing for credit of 0.2%

It will apply for everyone

**VegasDave** · 03-10-09, 10:30 AM

It is pretty much the same thing for a 50/50 bettor isn't it?

If I bet $100 on 100 games at (+100), and I win 50 and lose 50...

Old way:
50 wins = 2% taken off of each win = -$100
50 losses = 0% taken.
Total Commission: $100

New way:
50 wins = 1% taken off of each win = -$50
50 losses = 1% taken off of each loss = -$50
Total Commission: $100

Am I reading this wrong?

**guy9bundes** · 03-10-09, 10:35 AM

Originally posted by VegasDave

It is pretty much the same thing for a 50/50 bettor isn't it?

If I bet $100 on 100 games at (+100), and I win 50 and lose 50...

Old way:
50 wins = 2% taken off of each win = -$100
50 losses = 0% taken.
Total Commission: $100

New way:
50 wins = 1% taken off of each win = -$50
50 losses = 1% taken off of each loss = -$50
Total Commission: $100

Am I reading this wrong?

No, it doen not matter if you win or lose here.
The only thing that is matter is if you are on the accept side or the offer side.

Accept side = 1% commission
offer side =0.2% credit

**Santo** · 03-10-09, 10:38 AM

I think you're right, except the fee is now additional to the bet... so when you lose a $100 bet your account will be debited $101.

What this will do is penalise market makers and scalpers. It runs the risk of having deep, tight markets that are only being picked off by $20 betters in my opinion.

If I'm offering $2.5k at +110, and the market the other side is -112. Mudcat comes along and wants $2500, he's going to ask for +111. Now I'm not going to move because I want the 1.2% (Don't lose 1%, gain 0.2%) and Mudcat's not going to move because he wants the 1.2% Who blinks first? Probably the market maker when the market moves against one of us...

**VegasDave** · 03-10-09, 10:44 AM

Originally posted by Santo

I think you're right, except the fee is now additional to the bet... so when you lose a $100 bet your account will be debited $101.

What this will do is penalise market makers and scalpers. It runs the risk of having deep, tight markets that are only being picked off by $20 betters in my opinion.

If I'm offering $2.5k at +110, and the market the other side is -112. Mudcat comes along and wants $2500, he's going to ask for +111. Now I'm not going to move because I want the 1.2% (Don't lose 1%, gain 0.2%) and Mudcat's not going to move because he wants the 1.2% Who blinks first? Probably the market maker when the market moves against one of us...

Interesting, thanks for the clarification.

From the bettor's standpoint (someone who doesn't make offers), this really doesn't change a thing; the "1% is better than 2%!" is just a mirage really.

Smart move by matchbook.

**HeeeHAWWWW** · 03-10-09, 10:46 AM

Had a play with it on NY vs Milwaukee. Say $100 risked on Milwaukee.

Best price on Milwaukee was -155, and win or lose I get charged 1% of the to-win side. So $100 to win $64.52, charge of 64 cents. Effective price is -157.55, wheras under the old 2% on winnings it was -158.15

Instead I queued for -154, and it was matched, so $100 to win $64.94, and instead of a commission I get a payback of 13c. Effective price is -153.49, whereas under the old 2% it was -157.13

In other words, if you can be bothered offering and waiting, this is a godsend. You get better prices that even pinnacle can offer (they had -157 when I did this). For accepting it's only a marginal improvement.

**guy9bundes** · 03-10-09, 10:47 AM

Originally posted by Santo

I think you're right, except the fee is now additional to the bet... so when you lose a $100 bet your account will be debited $101.

What this will do is penalise market makers and scalpers. It runs the risk of having deep, tight markets that are only being picked off by $20 betters in my opinion.

If I'm offering $2.5k at +110, and the market the other side is -112. Mudcat comes along and wants $2500, he's going to ask for +111. Now I'm not going to move because I want the 1.2% (Don't lose 1%, gain 0.2%) and Mudcat's not going to move because he wants the 1.2% Who blinks first? Probably the market maker when the market moves against one of us...

I disagree, Matchbook is doing this in order that they will not need market makers.
And if it will result the best lines in the industry I will be gladly pay the 1% commission on accept offer.

**Santo** · 03-10-09, 10:53 AM

I think it's going to be hard to judge until it's deployed... I can see arguments for how it would work both ways.

As for not needing market makers, I'm just not sure they have enough big money customers to do it without them, currently most of the NBA and NHL markets are market maker driven.

**Casi** · 03-10-09, 10:55 AM

The market makers suck anyway, no early volume in the NBA.
Including the 2% commision, i didn´t use them at all.

**Peep** · 03-10-09, 11:22 AM

I think it is great they are trying to encourage market makers, that is what they need to have it really take off.

So all you aspiring bookie wannabees who want to get your feet wet cheap.....

**Justin7** · 03-10-09, 11:32 AM

Wow. All I can say is wow.

**playz** · 03-10-09, 11:32 AM

I like the market makers part with commissions. But 1% for accepting a bet either if you win or lose is the essentially the same thing as 2%. If you want to reduce everything then it should be 1% or 1.5% on winning bets ONLY. I rather have baseball at the usually 1% for the season then this commission structure.

Regardless this will most likely increase liquidity for them and is a wise decision.

**Santo** · 03-10-09, 11:34 AM

There is also a worry that recreational betters may be put off by facing a fee when they lose a bet I think.

**playz** · 03-10-09, 11:40 AM

Originally posted by Santo

There is also a worry that recreational betters may be put off by facing a fee when they lose a bet I think.

Yes they should revise it to like 1.5% on winning bets. If they now reduce baseball the .5% as it says at the bottom of the homepage for specific sports then it is good.

**playz** · 03-10-09, 11:41 AM

When does this new commission take place though?

**Art Vandeleigh** · 03-10-09, 11:45 AM

Originally posted by Santo

There is also a worry that recreational betters may be put off by facing a fee when they lose a bet I think.

For sure.

**AgainstAllOdds** · 03-10-09, 12:08 PM

Originally posted by Justin7

Wow. All I can say is wow.

Justin, can you share your thoughts on this new system?

**Justin7** · 03-10-09, 12:14 PM

Hmm. Perhaps I misread it. 1% of any offer accepted is similar to what they had.

It's super-sweet for liquidity though. I think you'll see a lot of 1-cent spreads with this, with no one wanting to "accept". But if you have 1-cent spreads with a 1% commission, you're playing with an effective 3-cent spread. Add that to more liquidity, it's a good thing.

**bettilimbroke999** · 03-10-09, 12:15 PM

Originally posted by Casi

The market makers suck anyway, no early volume in the NBA.
Including the 2% commision, i didn´t use them at all.

Agreed, early liquidity at matchbook is terrible, markets always start out the night before -108/-108 and with 2% comm on winnings basically no one does any matching, perhaps now the markets will be deeper and tighter so that you can actually get a reasonable bet down early at decent odds since there will be a 1.2% bonus for market offers vs market accepts, think about it if u make an offer and win the bet you are saving 2.2% over the old way

**Santo** · 03-10-09, 12:16 PM

Liquidity will certainly increase, I'm not convinced that crossed offers (and thus matchbook's commission) will though.

**bleedblue** · 03-10-09, 12:18 PM

Originally posted by Peep

I think it is great they are trying to encourage market makers, that is what they need to have it really take off.

So all you aspiring bookie wannabees who want to get your feet wet cheap.....

This is far from true...In fact the opposite is true...

Consider a market maker who has:

TeamA- 1000 wins 1050
TeamB- 1000 wins 1050

in the old system he'd be guaranteed $50, and would pay 2%commission on the $50 ($1).

In the new system he would pay 1% on the first $1000 bet ($10) + 1% on the other $1000 ($10) for a total of $20 commission. The difference is huge. This is very bad for market makers, scalpers, or any other people that may bet both sides of a market...

I'm slowly auditing my account to see how much more commission I would have had to pay, and it is bad. So far for the college bowl season, I paid a total of $81.55 (1.5% commissions) off a total profit of $3706. In the new system, I would have paid $204.19...

Anyway, I'll probably have more thoughts later...

**bigugly** · 03-10-09, 12:23 PM

I'm hoping you don't still pay commission on a push...that would seem unreasonable. Probably nothing to worry about.

**HeeeHAWWWW** · 03-10-09, 12:33 PM

Originally posted by bleedblue

In the new system he would pay 1% on the first $1000 bet ($10) + 1% on the other $1000 ($10) for a total of $20 commission.

Or he's offered, and got $4 back rather than paying commission....

**bleedblue** · 03-10-09, 12:38 PM

Originally posted by bigugly

I'm hoping you don't still pay commission on a push...that would seem unreasonable. Probably nothing to worry about.

The current wording suggests that you pay commission regardless of the outcome, so a push would still get charged.

However, I would hope they wouldn't go that far...

**bettilimbroke999** · 03-10-09, 12:53 PM

Originally posted by bleedblue

This is far from true...In fact the opposite is true...

Consider a market maker who has:

TeamA- 1000 wins 1050
TeamB- 1000 wins 1050

in the old system he'd be guaranteed $50, and would pay 2%commission on the $50 ($1).

In the new system he would pay 1% on the first $1000 bet ($10) + 1% on the other $1000 ($10) for a total of $20 commission. The difference is huge. This is very bad for market makers, scalpers, or any other people that may bet both sides of a market...

I'm slowly auditing my account to see how much more commission I would have had to pay, and it is bad. So far for the college bowl season, I paid a total of $81.55 (1.5% commissions) off a total profit of $3706. In the new system, I would have paid $204.19...

Anyway, I'll probably have more thoughts later...

This is wrong in the new system if he made the market and he had

Team A 1000 to win 1050
Team B 1000 to win 1050

He would get the 50 PLUS .2% of 2000 in bets he offerred that were accepted for an additional 4, his total profit would be 54 the new way vs 49 (50-1) the old way

Clearly the new system penalizes market acceptors and rewards market makers which should result in tighter/deeper markets (more 1 cent lines as Justin said earlier) as no one will want to pay an additional 1.2% to accept an offer rather than make one and have it accepted, essentially if you are just making offers rather than accepting them you are actually being paid .2% to gamble on lines with virtually no juice, sounds like a great deal

**Santo** · 03-10-09, 01:00 PM

A lot of market making consists of taking existing offers, as when the market moves from -110/+104 to -114/+108, you will take any bets in between -110 and -114.

My figures show that my commission paid would go up many times under this new system. I can work around that to some extent, but the workaround probably involves lower volume.

**JoshW** · 03-10-09, 01:02 PM

I think it will hurt markets short term as the spreads will be low, but everyone will want to offer and not take bets, but over time, I could see this being very good for them. Lots of liquidity and 1% commission is low enough that on 1 and 2 point spreads on the market, regular bettors are still getting a hell of a deal.

**bleedblue** · 03-10-09, 01:04 PM

Originally posted by HeeeHAWWWW

Or he's offered, and got $4 back rather than paying commission....

Oh wow, my bad...I thought they were still charged 1%, but get .2% back...That makes a huge difference...

I'm still undecided on how I feel about this, though it is better for the majority of the players...

**bettilimbroke999** · 03-10-09, 01:05 PM

This new system clearly encourages one to make offers rather than accept them, if u see a weak number at matchy you are not "making the market" by sucking up odds which would inevitably have been matched by someone else anyway you are just scalping the market, clearly this new system penalizes scalpers but not market makers

**Santo** · 03-10-09, 01:06 PM

What I'm saying is that in the process of making a market, you inevitably take weak offers.

**Dark Horse** · 03-10-09, 01:14 PM

I'm trying to understand the timing of this. MLB about to start. So this could be a way to draw a much greater crowd to Matchbook, from other books. The other obvious thought is that liquidity is, or is expected to be, way down because of the economy.

For pregame and live trading this isn't that great. Every time you buy and sell you pay 1%. That can add up. Unless you put up the offers, when you get paid 0.2%. So as Santo said, it will be less aggressive and more of a waiting game to see who is willing to pick up the 1.2%.

And traders better have a percentage chart that translates the odds into what they're looking at on a 0-100 scale. In that regard, Tradesports was much clearer. Idea for the tool section, Ganch?

**bleedblue** · 03-10-09, 01:18 PM

Originally posted by Santo

What I'm saying is that in the process of making a market, you inevitably take weak offers.

If this new system goes the way Matchbook hopes it will (1 cent lines), you will be taking more weak offers and getting less offers matched, wont you?