A 'no-compete' clause in my current contract meant I couldn't work on BitBookie.com - although I was thinking a simple exchange similar to Betfair. What you've done looks interesting.
In case you were curious how they make money, here is BitBookie's answer:
"It's too early to monetize, but when we do, it will probably be through ads or affiliate programs.
I think that not charging a house take will have a positive effect on the quality of the site. Most sites do have a house take and that creates an incentive for them to be very pushy about driving bets. It's annoying and distracting. It's like being in a real casino!"
Aren't ads and affiliate programs hard to make money on unless one i very pushy with them?
I'd expect making money via a house take would require much less pushiness, because that involves making money off of something that people are coming to the site to do (gamble).
With ads, one is making money off of something no one is coming to the site for.
From what I understand about people who gamble online is that they move around a lot due to signup offers and other such stuff, so if they are advertising offers on the website I reckon it wouldn't be to hard to make money. Don't take this as fact though, just what I know from friends who are gamblers.
I used to have an online gambling website, and it is very lucrative to be a publisher. Mainly bc the model is different than traditional affiliate programs. The typical mode is that if you drive someone to sign up, you get a flat amount ($50-150) and a percentage of that users' LIFETIME input into the website (typically 8-10%)
It probably doesn't, but since they're using bitcoin it circumvents the way that the US government enforces things like the UIGEA - pressure on banks/payment processors to not accept this class of funds. Bovada is a site that offers both sports betting and poker to US customers, but has to do some tricky things in regards to payment processing. Full Tilt Poker was shut down and their funds seized for this reason, circumventing the payments process by claiming that players bought bogus items instead of funds on the poker site.
Am I correct to understand that it is not possible to determine the payout for winning at the time of placing a bet, since the proportion of bets could change? Payouts are determined when the book closes, not based on the ratio when the bet is placed?
Correct, they use parimutuel betting, where all bets are placed in a group pot and the winners are paid their original stake plus some portion of the losers' stakes. This means that bitbookie doesn't have to set betting lines (probabilities) for all the events, which is something that takes a lot of skill and effort. Essentially it's easier for those who are not familiar with sports betting to say 'I pick team A to win' as opposed to 'I think team B is going to lose, but not by more than 7.5 points, so I should bet on them even though they're the worse team" that is a common play in spread betting.
A problem with this is it gives a huge incentive to bet as late as possible. You know where the money is you have more information about the event and so your bet can be better placed. Unfortunately this will mean there isn't any point betting later either as people will not have bet earlier.
Bitbet attempts to solve this by giving a higher weight to earlier bets. Not sure how well that works but the site seems to be used.
The best way to think of this is that there are no odds at all. All money goes into a pool and is shared evenly amongst the winners. That's it. The fewer people* that bet on the winner, the larger their share.
Talking about the odds while the betting is open is really talking about what the payout would be if the event occurred with the current pool.
*It is of course about the amount of money, not the number of people.
Apparently there is zero information about who runs this site. Yes, it looks nice, and seems to be a clever idea. But personally I wouldn't trust them with my coins.
There's nothing to stop one from starting with small bets, and then ramping up as one grows more trusting. Since there would be no reason for a wager to move from an entry-specific address before the event finished, one could even verify that one's coins haven't been spent on something else before they should. Actually we can look at all events in history and confirm that payouts balance with bets, if we want.
This could be a concern while the site has only operated for a short period. During that period, keep your wagers small. After the business is seen to be profitable, it becomes something of a golden goose, and this threat would be limited to rogue employees rather than the firm itself. Protecting against rogue employees could still be an interesting problem.
Admittedly, the concern we're discussing is one reason why I wouldn't mind if this firm charged a really small distribution percentage.
Is this vulnerable to a scenario where they have a bunch of coins in escrow and then they run off with them? If, for instance, the betting pools for world cup start filling up, whats to stop them from doing that?
edit: how in the world is this a dumb question / comment
Where did you see about an escrow? Or are you asking hypothetical?
Since the site does not address this issue, there is nothing to stop the site from up and leaving with all the coins. With a mixer, they can easily disappear too.
as I understand it, the bets go to holding pools (presumably controlled by bitbook.ie) until the events outcome is determined, at which point they are dispersed accordingly, maybe I got that wrong
That's a good question. They may not state it explicitly but all betting sites would have an escrow (or 'wallet') system. The alternative, where if you lose, they send you an invoice for what you owe would be, er, uncommercial.
Suggestion: horse racing, or at least the big race this weekend. California Chrome could win the Triple Crown! (That hasn't happened since 1978.) I expect even a simple CC vs. the field event would see a lot of bets...
Parimutuel has simplification benefits for the pool-operator and casual recreational bettor... but is of little interest to big-money/smart-money.
Why not? Unless they're the last money in, they might not be getting the odds they expect... and thus might even have their money on the 'wrong side' of the bet, given the final odds.
Yeah. There is a strong incentive for anyone using this site to wait as long as possible. Unfortunately that probably results in a kind of feedback loop preventing the site from being used.
Clicking through to the World Cup page, I note a serious deficiency in this "parimutuel" system: only two entries per event, even when it's "wins the World Cup"! It certainly explains why the pools are so tiny. Expect to see great arbitrage opportunities among the myriad different pools. Regular bettors get screwed by this.
The pools would be bigger if there were 32 entries for the "wins the world cup" event, which any mature parimutuel implementation would have. Instead, there are 32 separate events, with two entries per. I'm not complaining about the exotics like "wins group A", although those also should have four entries rather than two.
There is a deficiency - but it'd be hard to exploit at great scale, because as you bet the advantage goes away, and then later bettors might leave your stake with bad odds. Only being the 'last mover' in all the pools allows definite arbitrage.
Only being the 'last mover' in all the pools allows definite arbitrage.
If so, now we know the actual profit model of this business.
Actually there would still be value in getting one's arbitraged wagers in just before the window closes: at this moment the general public would be unlikely to drive one out of the money and the site operator would have no incentive to do so.
Actually, assuming that bets are respected up through one atomic blockchain block before pool closing, the operator can't ensure they're last-to-move, because of the mechanics of Bitcoin-transactions-into-blocks. All bets are public, and all bets into the 'last block' before the pool closes would be equally valid. (Bitbook.ie could use some other 'we saw your transaction in time, even though it didn't make a block' approach... but that would be so open to abuse and customer complaint I doubt it'd fly.)
So this again presents more problems for potential arbitrageurs as soon as there's more than one last-minute "sniper": not only are they unsure if their bet will be minted into a block in time, they can't be sure N others following the same strategy don't try the same thing, making the final odds awful.
To the extent the operator has any discretion, it's just to make a final ruling on whether a block arrived "soon enough", or is the first block for which bets are a "no-go". There's a very, very slight abuse potential in such discretion: their decisions are publicly observable, and biased/arbitrary decisions would result in a lot of griping and lost credibility.
On the other hand, large mining pools would have significant power to control the 'last money in', in the blocks just before an event closes. (If they see imbalanced odds they like, they could blockade other bets, and only allow their own confederates' late money in, and only to the extent that the odds remain favorable.)
Maybe that's the real business model: kickbacks from side-betting mining pools!
...they can't be sure N others following the same strategy don't try the same thing, making the final odds awful.
Sure, but this is a challenge with parimutuel wagering in general. It's why the lines at the window are longest with one minute to post: there is more information about odds closer to the end.
How long does it take to go from wanting to place a bet, to your money being in the pool? My knowledge of bitcoin is lacking but I was of the understanding that there is some time before the transaction/transfer is verified? Thus if you wanted to submit a wager close to closing time, you would probably be unable to?
IS there trend data available? Can see see where the public money is going, or is it simply a case of monitoring the blockchain for transactions going to the wallets (pools) you're interested in?
I placed some bets yesterday before but near the closing time. They were shown as included in the pool but after the event they were considered rejected. I would think that the blockchain would include some information that would allow it to be determined that it was sent before the closing time.
Interestingly, my rejected bets for the losing team were not returned, but instead paid out to the winner. I'm informed the site owner already.
I like the idea, but I'm not sure I would get anywhere near this as a US citizen. I can easily envision a federal prosecutor trying to make a name for himself coming up with an argument that it violates the Wire Act, and since it is parimutuel, then everybody who placed a bet also accepted a bet.
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[ 2.9 ms ] story [ 163 ms ] threadA 'no-compete' clause in my current contract meant I couldn't work on BitBookie.com - although I was thinking a simple exchange similar to Betfair. What you've done looks interesting.
Good luck!
"It's too early to monetize, but when we do, it will probably be through ads or affiliate programs.
I think that not charging a house take will have a positive effect on the quality of the site. Most sites do have a house take and that creates an incentive for them to be very pushy about driving bets. It's annoying and distracting. It's like being in a real casino!"
I'd expect making money via a house take would require much less pushiness, because that involves making money off of something that people are coming to the site to do (gamble).
With ads, one is making money off of something no one is coming to the site for.
I'm really interested to see how the 'no cut' ideology helps circumvent the stupidly strict USA gambling laws.
Bitbet attempts to solve this by giving a higher weight to earlier bets. Not sure how well that works but the site seems to be used.
Talking about the odds while the betting is open is really talking about what the payout would be if the event occurred with the current pool.
*It is of course about the amount of money, not the number of people.
Admittedly, the concern we're discussing is one reason why I wouldn't mind if this firm charged a really small distribution percentage.
edit: how in the world is this a dumb question / comment
There is however a phone number listed here, https://bitbook.ie/contact
Why not? Unless they're the last money in, they might not be getting the odds they expect... and thus might even have their money on the 'wrong side' of the bet, given the final odds.
That could limit the interest and liquidity here.
EDIT: I'm not wrong about this: https://bitbook.ie/make_bets/abf97e24-ded0-42bb-832d-669e275...
If so, now we know the actual profit model of this business.
Actually there would still be value in getting one's arbitraged wagers in just before the window closes: at this moment the general public would be unlikely to drive one out of the money and the site operator would have no incentive to do so.
So this again presents more problems for potential arbitrageurs as soon as there's more than one last-minute "sniper": not only are they unsure if their bet will be minted into a block in time, they can't be sure N others following the same strategy don't try the same thing, making the final odds awful.
To the extent the operator has any discretion, it's just to make a final ruling on whether a block arrived "soon enough", or is the first block for which bets are a "no-go". There's a very, very slight abuse potential in such discretion: their decisions are publicly observable, and biased/arbitrary decisions would result in a lot of griping and lost credibility.
On the other hand, large mining pools would have significant power to control the 'last money in', in the blocks just before an event closes. (If they see imbalanced odds they like, they could blockade other bets, and only allow their own confederates' late money in, and only to the extent that the odds remain favorable.)
Maybe that's the real business model: kickbacks from side-betting mining pools!
Sure, but this is a challenge with parimutuel wagering in general. It's why the lines at the window are longest with one minute to post: there is more information about odds closer to the end.
IS there trend data available? Can see see where the public money is going, or is it simply a case of monitoring the blockchain for transactions going to the wallets (pools) you're interested in?
Interestingly, my rejected bets for the losing team were not returned, but instead paid out to the winner. I'm informed the site owner already.