Matchbook Funds Safety

[betyuda]

I m not sure if i m comfortable having 10gs in matchbook though. i have my doubts.

[heyman]

I couldn't find a link about Matchbook paying slow, and think the grade should be raised to B or B+. There is a lot of talk about matchbook being in debt or having a big debt a few months ago, so I think money is safer at Bodog and the other recommended books.

I don't know how much MAtchbook rating dropped due to what happened at WSEX, but I don't think they are connected anymore. There seems to be more mystery regarding MAtchbook ownership compared to other books, and management could screw things up.

Well, that's the point. The question was in regard to safety of funds. All the reasons given for matchbook's rating drop fall into two buckets:
technical problems (downtime and a few technical goofs)
complete speculation (debt or slow-paying)


And let me further expand. I am not corporate lawyer and have no inside information but this is the risk as I see it.

Assuming matchbook is not separate solely for tax purposes, or to defraud/commit crimes, or matchbook secured WSEX’s debt, or owns WSEX’s building/land (any corporate lawyers know other exceptions?) etc I’m not sure what it matters as they are separate legal entities – matchbook isn’t liable for WSEX’s debt.

Of course, the owners of WSEX might be cash-strapped, have underwater mortgages, divorce etc. and have been counting on income from WSEX and matchbook and need to bleed matchbook dry. I don’t think it is very likely for all that to happen and for them to be short-sighted enough to lose the cash cow matchbook. It doesn’t take much imagination to think of possibilities where matchbook folds/steals but in my opinion it’s no more likely than greek, bookmaker etc - it's the cost of doing business.

[KC]

I m not sure if i m comfortable having 10gs in matchbook though. i have my doubts.

I never leave less than 3K on hand there, need at least that much. When the balance hits 6K fed ex home half.

[Dark Horse]

Of course, the owners of WSEX might be cash-strapped, have underwater mortgages, divorce etc. and have been counting on income from WSEX and matchbook and need to bleed matchbook dry. I don’t think it is very likely for all that to happen and for them to be short-sighted enough to lose the cash cow matchbook. It doesn’t take much imagination to think of possibilities where matchbook folds/steals but in my opinion it’s no more likely than greek, bookmaker etc - it's the cost of doing business.

There is a general misconception that exchanges are cash cows. Tradesports certainly wasn't. The problem is always liquidity, and it appears that MB may have 'solved' this by allowing credit players to seed the market. If this indeed is the case, it completely changes the risk-free dynamic of an exchange. If, as SBR suggests, MB has managed to dig itself a hole, that would mean that the funds of all players are at risk. For the simple reason that MB could not survive a run on the bank. I might add that Tradesports always had the guarantee that players funds were safe, and kept in a separate bank account. Why is MB not offering the same guarantee?

It becomes a matter of evaluating the people running the show. Which is not easy, because little is known. A top book could only be run by topnotch people, who know every in and out, every trick of the trade. But the requirements for an exchange are far lower. Just about anyone could do it. The problem with the folks running Tradesports was that their background was leaning heavily towards financial markets. They were never really able to close the gap to sports bettors. But at least they were economic experts. I do not think that the same can be said for MB management. They appear to have taken a major risk to -artificially- get around the problem of liquidity.

Half the people here don't understand the difference between a book and exchange. And a large segment of people is under the impression that, as long as payments are made fast, the exchange is good as gold. What they fail to see is that, if SBR's allegation is accurate, those players are paid with other players funds. This scheme can go on for a long time, but, compared to the pure exchange that was Tradesports, this is an exchange at its worst. MB gambled, and the game they bet on is playing out as we speak.

[Hareeba!]

There is a general misconception that exchanges are cash cows. Tradesports certainly wasn't. The problem is always liquidity, and it appears that MB may have 'solved' this by allowing credit players to seed the market. If this indeed is the case, it completely changes the risk-free dynamic of an exchange. If, as SBR suggests, MB has managed to dig itself a hole, that would mean that the funds of all players are at risk. For the simple reason that MB could not survive a run on the bank. I might add that Tradesports always had the guarantee that players funds were safe, and kept in a separate bank account. Why is MB not offering the same guarantee?

It becomes a matter of evaluating the people running the show. Which is not easy, because little is known. A top book could only be run by topnotch people, who know every in and out, every trick of the trade. But the requirements for an exchange are far lower. Just about anyone could do it. The problem with the folks running Tradesports was that their background was leaning heavily towards financial markets. They were never really able to close the gap to sports bettors. But at least they were economic experts. I do not think that the same can be said for MB management. They appear to have taken a major risk to -artificially- get around the problem of liquidity.

Half the people here don't understand the difference between a book and exchange. And a large segment of people is under the impression that, as long as payments are made fast, the exchange is good as gold. What they fail to see is that, if SBR's allegation is accurate, those players are paid with other players funds. This scheme can go on for a long time, but, compared to the pure exchange that was Tradesports, this is an exchange at its worst. MB gambled, and the game they bet on is playing out as we speak.

Excellent post Dark Horse.

A proper review of a betting agency should include an examination of their finances. Sadly that appears never to happen.

I have no doubt that many of them don't have sufficient cash resources to cover their clients' balances. Not saying that Matchbook is one of them.

Matchbook offers a lot to players. Is the risk worthwhile? Who knows?

Never leave more money at a book than you need to. I understand however that that can be problematic for US players who can't move funds about as easily and quickly as the rest of us can.

[bubba]

sbr- what say you. bill or someone in the know. are funds safe at matchbook? can i put 5 figures in there for football season? this wholl,e thread seams like speculation. would they let you visit there office? i bet they would. is sbr willing to do a matchbook visit before football 2010. could they get an A rating even if they choose not to advertise here? ty

[bubba]

and while i am on the subject. why does matchbook not advertise here anymore. did sbr not want them (because they dont trust matchbook) or did matchbook not want to advertise here anymore. i know there rating was lowered right after they were off as an advertiser but who dropped who?

[heyman]

There is a general misconception that exchanges are cash cows. Tradesports certainly wasn't. The problem is always liquidity, and it appears that MB may have 'solved' this by allowing credit players to seed the market. If this indeed is the case, it completely changes the risk-free dynamic of an exchange. If, as SBR suggests, MB has managed to dig itself a hole, that would mean that the funds of all players are at risk. For the simple reason that MB could not survive a run on the bank. I might add that Tradesports always had the guarantee that players funds were safe, and kept in a separate bank account. Why is MB not offering the same guarantee?

It becomes a matter of evaluating the people running the show. Which is not easy, because little is known. A top book could only be run by topnotch people, who know every in and out, every trick of the trade. But the requirements for an exchange are far lower. Just about anyone could do it. The problem with the folks running Tradesports was that their background was leaning heavily towards financial markets. They were never really able to close the gap to sports bettors. But at least they were economic experts. I do not think that the same can be said for MB management. They appear to have taken a major risk to -artificially- get around the problem of liquidity.

Half the people here don't understand the difference between a book and exchange. And a large segment of people is under the impression that, as long as payments are made fast, the exchange is good as gold.

"Cash cow" as in I believe, even if all the credit gossip is true and there is confluence of ownership problems, matchbook’s future income and present value of its future sale price is higher then the assets on its ledger. The owners are rational businessmen. They have a guaranteed income stream from an established leader (how many books do more volume then matchbook for the big MLB/NFL/NBA/NHL/NCAAB/NCAAF?) with nearly no overhead costs. They don’t need a sales department (no bonuses), no phone-in lines for bets, no oddsmakers.

But the real point is Matchbook has the best prices and very high liquidity, it is #1 to Pinnacle’s #1A or perhaps the other way around for US sports. I am supposed to believe that without credit matchbook will dry up? Betfair caters to similar numbers of people, with similar wealth, standard of living, ancestry etc etc yet charges more in commissions. But we’re to believe that the American public would rather play at -110 shops and can't support one dominant exchange? The longer matchbook stays with the same software/website, pays everybody, and has by far the lowest prices the more matchbook is worth to its owners. It’s a boulder gaining momentum down a hill; I cannot imagine ownership pulling the plug now.

And I haven’t a clue what tradesports has to do with matchbook, except that matchbook was better and tradesports paid everyone (the best and fastest they could to wash their hands of it and move on).

Edit: I was wondering what you said about tradesports and came accross this gem right at the top.

Exactly. They became a dinosaur when Matchbook stepped in to show how it is done.

http://forum.sbrforum.com/sportsbooks-industry/117832-important-tradesports-will-ceasing-operations-friday-november-28th-2008-a.html

And to the reason we are even talking about this – the speculation. The guessing going on here is coming from unnamed sources brought to us by people who make their money from matchbook’s competitors.

What they fail to see is that, if SBR's allegation is accurate, those players are paid with other players funds. This scheme can go on for a long time, but, compared to the pure exchange that was Tradesports, this is an exchange at its worst. MB gambled, and the game they bet on is playing out as we speak.

So now it’s a Ponzi scheme?

[heyman]

I have no doubt that many of them don't have sufficient cash resources to cover their clients' balances. Not saying that Matchbook is one of them.

Of course they don't and shouldn't. It's a terrible waste of money. US banks are only required to have ~15-20% liquid funds in reserve and that's largely to protect the FDIC guarantee.

[Hareeba!]

Of course they don't and shouldn't. It's a terrible waste of money. US banks are only required to have ~15-20% liquid funds in reserve and that's largely to protect the FDIC guarantee.

ok, depends on your definition of liquid funds v cash resources perhaps
if books are using client money to fund their own operating capital, pay rent, wages, etc. then they are not solvent
client funds should always be separated from the owners' funds and readily accessible to meet withdrawals promptly

[RickySteve]

If Matchbook had any f'ing clue whatsoever they'd not reserve offers from available balance. That would go a long way toward increasing liquidity, at zero risk to them. Maybe then they wouldn't feel compelled to grant gigantic credit lines for well-known degenerates to spew diarrhea all over MB's balance sheet. Also advertising is generally sort of a decent idea for any business.

Matchbook 'management' took a can't-miss concept with prime market position and turned the whole thing into a case study in colossal cock-ups.

[Dark Horse]

Heyman, you have correctly quoted some things I said about Matchbook. I was an early proponent here, even the one making the case for their rating being upgraded. However, what you failed to grasp entirely is that ... things change. What I said about Matchbook two or three years ago is not necessarily true today. I am, of course, flattered that you would assign such lasting importance to my observations, but, alas, the planet rotates on. If you have not yet grasped this concept I would recommend the life story of Galileo.

But the essence of your brief summary is absolutely correct. I once saw great potential in Matchbook. If this were the stock market, I would have bought the MB stock early, when it was a rising star, and I would have sold it quite some time ago. You may have noticed that Matchbook in those early days even posted on this forum. What is not said is often just as important as what is said. So take Matchbook's silence here on SBR's downgrade of their operation as, at least, somewhat meaningful. They could have explained that everything was under control and in great shape. But where they once responded here to concerns and ideas, they no longer take that trouble. Can they no longer afford to see eye to eye, and be open and transparent about their business?

[increasedodds]

I'd feel comfortable with 6 figures in matchbook. They make 5 figure payments or transfers in a few hours.

[tofuman]

where is proof that matchbook gives credit to players?
they don't need to give credit to create liquidity for MLB or football.
and if they don't give credit to anyone then they should not have any financial problems.

[jizay]

Fish, would MB payout big money without a hassle. Something like $50,000 for example?

MB recently paid a player over 100k by bank wire. Pretty prompt, not much hassle (there was some haggling over the fee).

[heyman]

Heyman, you have correctly quoted some things I said about Matchbook.

One thing.

What I said about Matchbook two or three years ago is not necessarily true today.

<20 months.

I am, of course, flattered that you would assign such lasting importance to my observations, but, alas, the planet rotates on.

Observation. Singular. Matchbook was the topic. You brought up tradesports as a case study for a failed exchange and stated a couple of reasons that it was superior to matchbook. I thought that quote was relevant to an otherwise irrelevent point about tradesports.

Actually, I’ll explain further:
You held tradesports up as an example that exchanges aren’t cash cows, yet you admitted when they closed that they diverted markets, screwed up customer service, and decreased their liquidity by increasing their fees. How is that an indictment on exchanges overall and not just Tradesports?

But the essence of your brief summary is absolutely correct. I once saw great potential in Matchbook. If this were the stock market, I would have bought the MB stock early, when it was a rising star, and I would have sold it quite some time ago.

I didn’t summarize anything you said – I let it stand on its own (lack of) merit.

Let’s look at that quote again. “They became a dinosaur when Matchbook stepped in to show how it is done.”
There is no future tense. You believed at that point that matchbook eclipsed Tradesports and was an example of a well-run exchange. That’s not potential, that’s realized potential. And the A-rating and player poll lent support to that.

You made and latched onto one diversion (Tradesports) and the one quote I used in response to that diversion. The heart of the matter is - what has happened since then? You ignored the majority of my post (#43 above) which was a rational look at the matchbook’s current standing and their solid history, given information that we know now. Since that was ignored I am led to assume that you believe the speculation. I have questions about the source and accuracy of the speculation. That was also ignored.


Now I’ll summarize:
- I respond about matchbook’s connection to WSEX and expand by saying that matchbook is a cash cow that’s worth more alive then dead.
- You object to my saying exchanges aren’t cash cows and hold up tradesports as an example and speculate that matchbook is a ponzi scheme.
- I give reasons for exchanges and matchbook being cash cows and how tradesports isn’t representative of the future of exchanges or matchbook.
- You now drop your exchange/matchbook argument in favor of more idle speculation.

I’m not exactly sure what you’re arguing now. I already stated that the reasons for their downgrade are technical problems (infrequent) and speculation (unnamed and unfounded). You might be right that matchbook is a ponzi scheme but you’ll be right for the wrong reasons. Since I don’t think I stated it, I’ll give you a new reason to argue unconvincingly:
There is no tangible or logical reason matchbook shouldn’t be trusted with the other A rated leaders of the industry.

The internet is an echo chamber. If one rumor gets repeated enough it looks like a fact. Similar to major military decisions in Iraq based largely on oft-repeated ‘information’ from a single unreliable taxi driver as the source. I have provided much of my thought process, I am unimpressed with yours.

[heyman]

If Matchbook had any f'ing clue whatsoever they'd not reserve offers from available balance. That would go a long way toward increasing liquidity, at zero risk to them. Maybe then they wouldn't feel compelled to grant gigantic credit lines for well-known degenerates to spew diarrhea all over MB's balance sheet. Also advertising is generally sort of a decent idea for any business.

Matchbook 'management' took a can't-miss concept with prime market position and turned the whole thing into a case study in colossal cock-ups.

Excellent analysis, reads like it is right off the reels of the WSJ…

[yanksfan]

What has SBR claimed about Matchbook?

[KC]

What has SBR claimed about Matchbook?

I think they were downgraded due to their site going down a lot, not because of any payout disputes

[username474]

I'd feel comfortable with 6 figures in matchbook. They make 5 figure payments or transfers in a few hours.

This ^ The day that they stop giving the option to recieve 6 figures in a week then I will worry. Pinny,cris and greek still trust MB. And I am certian that Pinny,Cris and greek know way more about the inner workings of Matchbook then SBR or anyone that posts in SBR. Threads like this hurt the liquidity and need to be stopped. When I look at the list of books that are rated higher then MB according to SBR I want to bang my vucking head on a wall. A lot of people here need a better hobbie then to make unsubstantiated speculations based on a SBR rating.

[Dark Horse]

Heyman, I was one of the first to sing the praises of Matchbook. Many followed after that. MB obviously benefited from Pinnacle leaving the US market. I was also among the first to get out when things went south. And as far as I'm concerned, that's all there is to it. If you must know, the two main factors by which I judge a book, or exchange, are the professionalism of the people running the show, and the financial stability. And I can't grade MB high in either category. So stay up to date in a fast changing world or fall behind. It's all the same to me. If you want to split hairs over whether I said something two years ago or twenty months, you got the wrong person.

[username474]

Maybe if they did not payout 107k in less then 48hours via b2b just two months ago I would be a little less hard edged about it. The way I see things, they made a few mistakes lost THEIR money and are being hung to a cross for it. When checks or payments start coming in slow, I will be the first to get out the nails. Of course I am biased and openly admit that I would love to see every bookmakers car blow up in one synchronized blast (yes with them in it, I am hardcore) and all that is left in the rubble, are exchanges. But we need to circle the wagon here in till there are real warning signs other then them getting stiffed by degens. They had money to front, they got stiffed, end of story.

[Domer]

Been playing at Matchbook for many years now with the number of deposits and cashouts well into the triple digits, NEVER a problem. Twice there was something wrong with a transaction and they gave me commission credits as compensation while they promptly fixed it. MB is by far the best "legit" out if you're unable to access Pinnacle or Betfair. If you know about MB and are not using MB, you are either not a serious bettor or you're an idiot. That's harsh but reality.

I had my concerns a few months ago about Matchbook when SBR started their downgrades, but after talking with a few people, came to realize that the most likely explanation for SBR downgrading a book that has had 0 problems is because MB pulled their ad after football season. SBR is cheapening their own product, and eventually a competitor will take advantage of their lack of transparency.

And to the talk about Tradesports, Tradesports was closed to spin off Intrade, a site that was incredibly successful in the last election cycle and is petitioning the CFTC for legitimacy. It had nothing whatsoever to do with Matchbook.

[heyman]

I was also among the first to get out when things went south. And as far as I'm concerned, that's all there is to it.

Matchbook didn’t go south.

If you must know, the two main factors by which I judge a book, or exchange, are the professionalism of the people running the show, and the financial stability. And I can't grade MB high in either category. So stay up to date in a fast changing world or fall behind.

This whole thread you have not provided any actual backing which would show how you reach the judgement that their financial stability is ‘not high’. The things you think you know, you don’t. I can change my mind at any point if information changes, but at this point there is no tangible or logical reason matchbook shouldn’t be trusted with the other A rated leaders of the industry.

If you want to split hairs over whether I said something two years ago or twenty months, you got the wrong person.

That was your Tradesports diversion. I explained in detail why Tradesports was irrelevant above and quoted a one-liner from you. It is how I destroy a part your argument as well as show your past inconsistency. Of course the other part of your argument you gave up on as it was clearly indefensible. Not to mention the assertion that matchbook is a ponzi scheme which is truly without any support whatsoever. It is pretty obvious at this point that you have no information or reasoning to back up any of your beliefs.

[heyman]

Been playing at Matchbook for many years now with the number of deposits and cashouts well into the triple digits, NEVER a problem. Twice there was something wrong with a transaction and they gave me commission credits as compensation while they promptly fixed it. MB is by far the best "legit" out if you're unable to access Pinnacle or Betfair. If you know about MB and are not using MB, you are either not a serious bettor or you're an idiot. That's harsh but reality.

I had my concerns a few months ago about Matchbook when SBR started their downgrades, but after talking with a few people, came to realize that the most likely explanation for SBR downgrading a book that has had 0 problems is because MB pulled their ad after football season. SBR is cheapening their own product, and eventually a competitor will take advantage of their lack of transparency.

And to the talk about Tradesports, Tradesports was closed to spin off Intrade, a site that was incredibly successful in the last election cycle and is petitioning the CFTC for legitimacy. It had nothing whatsoever to do with Matchbook.

Good post. I think the main problem is the lack of transparency. I was under the impression that matchbook was A- (instead of A/A+) for so long because of their technical problems. Those problems haven’t gotten appreciably worse and yet they don’t put their supposedly inside information on the review, just in a couple of posts in the forum. If this was a different industry I would guessed that it was a protection against being sued for libel (can only lose if sued for libel if information claimed is not true). As it is, the anonymity, possible financial motives, and the lack of transparency are enough for me to give little weight to the claims that were made, now, about 6 months ago.