How is this news? Have they not heard of Betfair, which has been allowing this kind of thing since 2000?
The only thing required to make betting like a market is for the gambler to be able to take the bookie's side as well. Many bookie's use Betfair to hedge their positions in fact.
In financial markets terms, a gambler is much like a prop trader. They're betting on a particular position. That position, unlike a more traditional financial instrument, will be the outcome of a race, game, etc. But this isn't really all that different to, say, betting on oil futures.
A bookie on the other hand operates much like a spread trader. They (try to) take a neutral position and just make money on the spread as the difference in the odds between taking and making a bet is really a bid-ask spread.
American sports wagering - Vegas in particular - has been pretty behind the times until recently. Vegas betting has been limited, partly due to software, partly due to it being "the way", to pretty basic betting. Handicap, head to head, totals, basic propositions.
In run betting is huge in Asia, especially on football (soccer). As the article mentions, sports betting has never been a focus of the casinos. New kinds of betting will hopefully change that.
> Have they not heard of Betfair, which has been allowing this kind of thing since 2000?
Is Betfair really the same thing? Everything I heard about it while reading about prediction markets made it sound like the Vegas bookies that Cantor is being contrasted against - a limited set of bets run at specific times. Not arbitrary dynamically-generated bets at arbitrary times in the game. To me, that's quite different. Like the difference between a video game which is a shooter on rails, and _Halo_ with decent AI bots fighting you.
In addition to that, it also seems to be a big thing that people can place any sort of bets mid-game, rather than stopping all betting as soon as the game kicks off.
That's old news in Europe, not just thanks to a single site like Betfair - nearly every company offers in-game betting, both online and in shops.
Cantor is a brokerage firm at heart -- I dealt with them frequently when I worked on Wall Street. Their entire reason for existence is to match buyers and sellers, and take a cut of the transaction. More markets to do so means more money for Cantor.
I've been to the M Casino. It's not entirely unique, because other casinos are adding the "in game" betting using the same system, which was rolled out initially at the M. This is very different from the normal sports betting because you can bet during the game. Traditional bookmaking will take bets before an event (sometimes even a long time before, for example, the winner of next year's Super Bowl is already a bet you can make in Vegas) but not during it.
I am not sure if a "in game" system ever existing before in Las Vegas casinos to the extent that the M is doing it. The gambling radio shows seem to think it's a novel thing.
I should add that this market (sports gambling) has long had "traders" (people looking to arbitrage games and do other technical actions), "brokers" (people who tell you what to bet on, similar to a stock broker) and "value" players (in the betting case this is guys who look for an imbalance in value, undervalued positions usually caused by too many people betting on one side of a game, similar to Buffet looking for undervalued companies). Recently, I've heard of one of these brokers advertising themselves as an investment group, particularly to the extent that insider trading isn't illegal in gambling (for example, if you have better information on the seriousness of a injury to a key player you have inside information, but instead of it being illegal as it would be in the stock market, it's actively encouraged).
This market is huge. I heard on the radio that Vegas did ~$85 million in bets on the Super Bowl alone.
As a final note, if you don't think you're gambling when you put money into the stock market, then I'm not sure what to tell you.
> I heard on the radio that Vegas did ~$85 million in bets on the Super Bowl alone.
And the thing they didn't tell you is that most of the serious sportsbetting is now done via offshore sportsbooks. Places like pinnaclesports.com offer better spreads to gamblers, and other sites offer much wider arrays of options.
Regarding insider information in sports betting - yup, no rules against it. The professional gamblers who make a living betting share this kind of information, there are secondary markets that distribute such information (for a cost) etc..... These types of bettors, who generally win are interesting - thier actions cause bookies to change their offerrings immediately. They are on watch lists at various bookies. Bookies look for patterns of syndicate betting (where one guy who's known to be a pro gets a bunch of others to get a bunch of bets in as fast as they can before the bookies move the lines - and the bookies are all watching each other, both in vegas and around the world).
Guys known to be pros also end up sometimes with different odds offered to them, with lower limits than the average person as to how much they can bet, etc.
I think what happened here is a shooting in the foot event. WS has always tried to avoid that HFT and algo trading is not gambling. Or even vanilla or more complex derivatives.
Well.. sports betting is basically a market where you buy and sell risk. (You don't often sell at your traditional bookie, but you can hedge to not loose too much).
At it's heart it's just a futures market - the instrument being bought is the bet the bookie is offering you at that moment, and that's that.
There's a built in commission in the price you pay to bet.
The offerings are set based on both the bookie's view of overall market conditions (he wants customers to bet with him, not with someone else) and his view of the outcome of the wager.
And idea book is balanced so that no matter who wins an event, the losers pay the winners and the bookie keeps his 10%.
In practice, this generally doesn't happen, and, especially on big events, bookies and the public don't see eye to eye.... there are outcomes in the game that mean the bookie makes no money, or ends up losing quite a bit.
Various companies have presented this as both a person to person market, where you can set up your own pricing and odds (betting exchanges) - and I recall one (out of irealand I think?) that was actually set up like a real futures market where you could buy/sell at any point.
From the professional bettor's point of view it might not look like the stock market, but it's a market, and there area a lot fewer factors to take into consideration than the stock market - so you get a lot of professional bettors who win, consistently, season over season and make a living at this. All they have to do is statistcally beat the bookies. They do their own calcualtions, their own estimations, all that magic, and watch when the books open for a place where they see an advantage. (The pros usually bet early when the odds are posted, the guys who bet for fun bet up until the last second.)
I'm more interested in their ability (or the ability of the folks they partner with for data processing) to pass along events in real-time; or at least close enough to make a bet/prediction prior to the next play when even the official web-based PBP apps of the four major sports (I.E. MLB at-bat, NHL Gamecenter etc.) are often considerably behind the actual play.
16 comments
[ 3.4 ms ] story [ 35.9 ms ] threadThe only thing required to make betting like a market is for the gambler to be able to take the bookie's side as well. Many bookie's use Betfair to hedge their positions in fact.
In financial markets terms, a gambler is much like a prop trader. They're betting on a particular position. That position, unlike a more traditional financial instrument, will be the outcome of a race, game, etc. But this isn't really all that different to, say, betting on oil futures.
A bookie on the other hand operates much like a spread trader. They (try to) take a neutral position and just make money on the spread as the difference in the odds between taking and making a bet is really a bid-ask spread.
In run betting is huge in Asia, especially on football (soccer). As the article mentions, sports betting has never been a focus of the casinos. New kinds of betting will hopefully change that.
Is Betfair really the same thing? Everything I heard about it while reading about prediction markets made it sound like the Vegas bookies that Cantor is being contrasted against - a limited set of bets run at specific times. Not arbitrary dynamically-generated bets at arbitrary times in the game. To me, that's quite different. Like the difference between a video game which is a shooter on rails, and _Halo_ with decent AI bots fighting you.
Interesting anecdote, apparently Betfair had one of the busiest Oracle installs on the planet. They were (are?) creating some pretty neat infrastructure to get away from it: http://www.infoq.com/presentations/matt-youill-betfair-flywh...
That's old news in Europe, not just thanks to a single site like Betfair - nearly every company offers in-game betting, both online and in shops.
http://www.nytimes.com/2010/04/08/business/media/08futures.h...
Cantor is a brokerage firm at heart -- I dealt with them frequently when I worked on Wall Street. Their entire reason for existence is to match buyers and sellers, and take a cut of the transaction. More markets to do so means more money for Cantor.
http://www.hsx.com/
Used to play that a long time ago...
I am not sure if a "in game" system ever existing before in Las Vegas casinos to the extent that the M is doing it. The gambling radio shows seem to think it's a novel thing.
I should add that this market (sports gambling) has long had "traders" (people looking to arbitrage games and do other technical actions), "brokers" (people who tell you what to bet on, similar to a stock broker) and "value" players (in the betting case this is guys who look for an imbalance in value, undervalued positions usually caused by too many people betting on one side of a game, similar to Buffet looking for undervalued companies). Recently, I've heard of one of these brokers advertising themselves as an investment group, particularly to the extent that insider trading isn't illegal in gambling (for example, if you have better information on the seriousness of a injury to a key player you have inside information, but instead of it being illegal as it would be in the stock market, it's actively encouraged).
This market is huge. I heard on the radio that Vegas did ~$85 million in bets on the Super Bowl alone.
As a final note, if you don't think you're gambling when you put money into the stock market, then I'm not sure what to tell you.
And the thing they didn't tell you is that most of the serious sportsbetting is now done via offshore sportsbooks. Places like pinnaclesports.com offer better spreads to gamblers, and other sites offer much wider arrays of options.
Guys known to be pros also end up sometimes with different odds offered to them, with lower limits than the average person as to how much they can bet, etc.
At it's heart it's just a futures market - the instrument being bought is the bet the bookie is offering you at that moment, and that's that.
There's a built in commission in the price you pay to bet. The offerings are set based on both the bookie's view of overall market conditions (he wants customers to bet with him, not with someone else) and his view of the outcome of the wager. And idea book is balanced so that no matter who wins an event, the losers pay the winners and the bookie keeps his 10%. In practice, this generally doesn't happen, and, especially on big events, bookies and the public don't see eye to eye.... there are outcomes in the game that mean the bookie makes no money, or ends up losing quite a bit.
Various companies have presented this as both a person to person market, where you can set up your own pricing and odds (betting exchanges) - and I recall one (out of irealand I think?) that was actually set up like a real futures market where you could buy/sell at any point.
From the professional bettor's point of view it might not look like the stock market, but it's a market, and there area a lot fewer factors to take into consideration than the stock market - so you get a lot of professional bettors who win, consistently, season over season and make a living at this. All they have to do is statistcally beat the bookies. They do their own calcualtions, their own estimations, all that magic, and watch when the books open for a place where they see an advantage. (The pros usually bet early when the odds are posted, the guys who bet for fun bet up until the last second.)