Betfair to exit Australia

[Naffman]

We better make on then hadn't we!!!

[gazuty]

Some of the so called bookmakers will also be concerned at losing the exchange as a few of them are just parasites running software to offer prices below Betfair's

I remember the four corners documentary on sports gambling. Every trading room of every corporate bookmaker had dual screens for their odd setters. On one screen was betfair on the other their own odds. Some had multi screens with the other corporate bookies as well, but they all had betfair. Most of the big ones don't need to use it for hedging but most of smaller bookies definitely need it for hedging (or they don't hedge and occasionally need to do a runner on a day every favourite gets up).

Australia is seen as a very lucrative market for sports betting, punting is in the national psyche and most punters are mug punters.

Anyway as Naffman says, better get on with making hay while the sun is out.

[mugsgame]

Race 6 at Doomben. A quote from the pundit on Sky Racing World (was it Larry Olsen?) They are betting 146% at the track.Sounds like some sort of cartel.

If you Aussies like having it up your arses, just bend over. If not vote with you feet and don't bet with them. Go and do something better, like have your back waxed or take the Mrs shopping for shoes.

I'll miss the Aussie racing. It has been very productive for me and even worth getting up at 2:00 at Wednesdays and Saturdays. It's a great product being ruined by the greddy Monopolies. Not an expert on Aussie politics, but it seemed better when the Welsh bird was in charge. She has bigger balls than Cameron and Milliband thats for sure

[gazuty]

Not an expert on Aussie politics, but it seemed better when the Welsh bird was in charge. She has bigger balls than Cameron and Milliband thats for sure

Most people, even on her own side - perhaps especially so - hated her guts. But her biggest issue was she couldn't connect with mr and mrs average. The current incumbent is also unliked, but can from time to time connect. But no matter.

Because no matter the government of the day, Australia has always been in the grip of monopolies, duopolies, cartels and other economic rent seekers (and cheaters, dole bludgers and others living off my insanely high taxes). Getting hold of government licenses and exploiting them (tv radio, phone spectrum, mining, fishing etc etc) has always been a path to riches. Off course betting was strictly government totes and illegal sp until relatively recently. Hell you couldn't even take a mobile phone to a racecourse in case you told someone off course the odds. And then even after privatisation, well 146% says it all.

And Kerry Packer was a master and so now is his son. And Rupert sprouted wings and used what he learned in Australia and rolled out the model around the globe.

Making money in any endeavour is all part of the great game. Be it our efforts on the exchange or in business, overall it's all part of the great game.

[Naffman]

One of the main problems with the Australian model is that only horse racing in-play is allowed. And in saying that, there is barely any money waiting to get matched (3K on weekdays - with most at 1.01). I wonder if the government allowed in-play betting on cricket, football etc; how much the financial outlook of Betfair would change.

Anyways, it is only speculation of Packer's move, so we will just have to wait and see.

[burdo77]

I'm not sure how bookies work, however in a highly competitive industry wouldn't you think that the bookies need an exchange to balance their books, unless they just balance their books with their affiliates???

[Euler]

I think it's worth keeping an eye on but we have to wait and see what happens. Would surely be a blunder to exit their second biggest geography.

Betfair looked set to crush all traditional bookmakers in a global firestorm, but now it seems they are set to become a niche in the UK market. A bit embarrassing if you ask me if they continue to pursue these odd policies. You don't move forward by going backwards.

It's a bit like Ebay setting up auctions rooms. Or Facebook saying there is no future in social networking. The exchange is a game changer, or should be.

[andyfuller]

It is/should be a game changer but is it enough of a profit maker v traditional bookmaking? That I think is where the problem lies.

[LeTiss]

My take on that angle Andy, is that in the early days of BF, they were new and innovative and the 5% commission was absolutely fine, as they were a growing business

However, once they reached saturation point in the UK they realised a stagnant profit margin wasn't good enough, so they looked to take over the world by entering every country possible.

When that didn't go as planned they resorted to fleecing their existing database with various new charges like data usage and premium charge

Their thirst for increased profits then led them down the path of becoming a fixed odds operator.....basically becoming the exact monster they were trying to destroy 10 years ago. They seem to have developed a corporate version of 'Stockholm Syndrome'

Where do they go from here though?
The company seems to have lost the plot, they have lost their flair for innovation, and appear to be heading towards ultimate disaster

They will have nobody to blame, but themselves and their pure greed

[kelpie]

My take on that angle Andy, is that in the early days of BF, they were new and innovative and the 5% commission was absolutely fine, as they were a growing business

However, once they reached saturation point in the UK they realised a stagnant profit margin wasn't good enough, so they looked to take over the world by entering every country possible.

When that didn't go as planned they resorted to fleecing their existing database with various new charges like data usage and premium charge

Their thirst for increased profits then led them down the path of becoming a fixed odds operator.....basically becoming the exact monster they were trying to destroy 10 years ago. They seem to have developed a corporate version of 'Stockholm Syndrome'

Where do they go from here though?
The company seems to have lost the plot, they have lost their flair for innovation, and appear to be heading towards ultimate disaster

They will have nobody to blame, but themselves and their pure greed

+1

There's only real two things in betfair's future - demise or delist. If they can get away from shareholder pressure, and ditch the current imbeciles in the wheelhouse, there might be some hope. I know... how likely is that

[CaerMyrddin]

Any hopes BF will keep opening Australian markets without an Australian license? Or would that be illegal?

Just guessing, but believe that much of the liquidity is coming outside Aus and if they could do it, ironically in the long run we would be better without those beloved turnover charges?

Am I being too optimistic?

[gazuty]

Any hopes BF will keep opening Australian markets without an Australian license? Or would that be illegal?

Just guessing, but believe that much of the liquidity is coming outside Aus and if they could do it, ironically in the long run we would be better without those beloved turnover charges?

Am I being too optimistic?

Yes. The racefield, ie list of horses in the race and saddlecloth numbers, is protected by copyright in the hands of the race club. No one else can publish the field without permission. Hence each licensed bookmaker needs an agreement with the race club/organiser.

If betfair Australia is sold, the local outfit will retain those rights (you would expect) and betfair UK will sail off into the distance. They are unlikely to thumb their nose and try and do it anyway in breach of copyright. Sure there are some smaller outfits that try and do that, but the Australian government builds pressure on anyone from a legitimate jurisdiction to play by the rules. Especially if you are an organisation that ever wants a licence to operate here.

So very very unlikely betfair UK continues and allows foreigners to bet outside Australia on Australian races. As a listed company, they are not IMHO going to take the risk of enforcement action against them.

[Naffman]

Looks like the deal is getting close - http://www.theaustralian.com.au/busines ... 6859567285#

[Euler]

Of all Betfairs corporate strategic errors, this has to be right up there.

[PeterLe]

Of all Betfairs corporate strategic errors, this has to be right up there.

That would be a good question at the AGM