Brokerage house - will it work?

[Jeff]

There's a group planning on opening up a shop that will basically work like a brokerage house for sportsbetting, in that the player will post up with them, while they in turn will have huge accounts at several books.

The player wants to bet Georgetown today, the brokerage house will find them the best available number on the game and bet it for them. So the player will have at his disposal several books for the price of one, so to speak.

This is past the planning stages, as they have software in places and as far as I know are moving forward.

They will operate out of the Dominican Republic.

They propse to take 5% off the players win. If the player loses, the book pays the 5%.

Will it work? Or is the timing just all wrong?

Obviously one problem I see is that the player would have to put all his eggs in one basket, and would still have to worry about sportsbooks going down.

[monkeykeeper]

Already done, they should give idea up

Brian,

Feverpitch.com has been working on its p2p betting exchange for 2 years and developed software costing over 1 million U.S.

Based on person to person betting, I think the killer application is what I call the Sportsbook Market.

They are already negotiating a deal with major Island Sportsbooks. The books will deposit money into a escrow account insuring the player will get paid. The books can place their prices and lines on all events.

So Joe Sixpack: Normally couldnt have 3 outs to shop lines come football, now has the opportunity to open with one firm (publicly traded company) and bet lines from the major sportsbooks. Giving value back to the bettor.

I am very excited about this concept, and really do feel it will change the industry.

To the people in the Dominican Republic, good idea, but for this concept to work you need the safety and regulation of a 1st world country.

[Ronbets]

Jeff,

Only way I'd even consider would be a credit account with low settle #s. I'd hate to see the 'brokerage house' I,m posted with featured on "Unsolved Mysteries"--Missing/Vanished.

[sportshobby]

Great in concept, but what happens when the brokerage house gets stiffed by a big sportsbook going under? They will in turn stiff their customers, which will completely erode the confidence of players. Brokerage house then goes broke.

Without guarantees of monetary safety, this concept just doesn't work.

[ShiftySheik]

So if I use this "broker" I'd have to lay 110 to win 95. If that's the deal, they'll never make it.

I'd rather see a bet exchange that specializes in the US market. Players post offers for anyone to take. The house collects a commision from the winner. This concept could be illegal since the player is acting as a bookmaker. The bet exchanges in the UK have little interest in US sports but there's a lot of action on soccer.

[Dragon]

Shifty, interesting point about the player acting as the bookmaker with the bet exchange. I never thought of it that way, but you're right.

[monkeykeeper]

Good questions by all-- here are the answers

Feverpitch.com is going to go live very soon with a person to person betting exchange.

RonBets/Sports Hobby : The exchange will not fold, as the bookmakers participating in exchange will have to post up the money to take the bets. Novel concept, no need to worry about your bookmaker going bust ever again.

Exchange is publicly traded company, and most importantly is not gambling, thus there risk are minimal.

Shifty-- you know your stuff, p2p betting is extremely popular in the UK. Feverpitch.com is currently offering your suggestion of a bet exchange catering to U.S. market. It is only one that deals in U.S. prices (moneyline)

In terms of commission, the value that the exchange brings will lower the vig on most events as it creates competition among offeror's.

The addition of 5-7 of major bookmakers will provide players with the opportunity to open one account, and have luxury of shopping all the lines.

Trust me fellas, this is going to be huge.

[JC]

Monkeykeeper,

What is your affiliation with Fever Pitch? Have you been retained to handle their marketing or similar?

[brink]

Monkeykeeper what about the potential legal problems of the player acting as the bookie?

It's an interesting idea, although the site is a little confusing. I think it has a chance but has a long road in front of it.

Don't forget, enron was a publicly traded company to. Lots of publicly traded companys go belly up every day. All that being publib means is that they are using other peoples money to fund their business.

What really bothers me though is the escrow accounts. Isn't that what they are supposed to be doing NOW??

[monkeykeeper]

Regulated/Segregated accounts

JC/Brink,

Good questions.

I have been involved in online wagering since 1996. But this is something I have been thinking about as the Holy Greil of internet sports betting. Person to person wagering is huge in Europe, Feverpitch has taken this concept but catered it to Americans (moneyline instead of decimal pricing).

I first found out about Feverpitch through a online investment site. I am a gambler, and have invested in Feverpitch stock. I love the idea, the timing, and the opportunity to buy it in a ipo. I am not an employee of Feverpitch, but do help out with some ideas and feedback on the NA market.

You are right, to work the company must not only be public, but also in a regulated jurisdiction that makes it mandatory to keep escrow accounts for clients. It is mandatory is several island jdx's but they are never enforced.

As most insiders will tell you there is no government regulation or oversight of online gaming firms. Antigua has great regulation on paper, but when no provisions of it are followed it is moot.

Good q's on legality, I have my opinions but feel it would be best if someone from Feverpitch answers them.


This will create a new wave of betting, giving safety, value, options to the player.

Imagine:

Football season is here, thinking of where to open a couple of accounts. Or where to open one if you can't afford to spread the bankroll out.

Imagine, you sign up one place, a publicly traded secure firm. And with the one sign up, you can bet on odds/prices/events posted by the leading Island & International books.

Or you can be what we all have a secret desire to be a bookie and post your own offers at your own prices.

Imagine a site:

Where you are the bookmaker, posting offers or accepting others.

Where you can bet lines from all the big sportsbooks

Where your money is protected by a publicly traded company.

That has interactive live wagering on all events.

Sports from around world.

Unlimited props, what ever you want to bet on (must be verifiable)

I admit I don't bet with most of the offshores. One I look to play bad lines offered by UK books, and two I don't trust any of them completely.

I have been following betfair, a uk p2p sites growth and have long been hoping it would be offered to Americans.

This is going to revolutionize sports betting, giving the value back to the player.

Feverpitch.com is a must look, don't let the future pass you by.

[ShiftySheik]

Moneykeeper, I'll check out feverpitch, this is the first I heard of them. Have you looked at play121.com? They take $US accounts but there is no interest in US sports except for NFL. Most of their players bet small. If they marketed their site over here it would help.

[Feverpitch]

Feverpitch Questions

B/World readers:
We noticed the comments in the forum, and the many questions and will attempt to provide some answer one by one:


Jeff wrote >> “The player wants to bet Georgetown today, the brokerage house will find them the best available number on the game and bet it for them. “

Jeff, instead of a broker 'manually' looking for the best price, wasting time and introducing more friction and cost into the market – we have created a market place for the market players to work out and 'negotiate' prices themselves. Bookmaking is a "free market" waiting to happen – just as the barriers in the stock markets broke down over the 90’s and digital trading took over, so we see the future of bookmaking online.

As monkeykeeper notes, we are already live at feverpitch.com with our initial version of software out there for players feedback, having spent over 15 months producing it as the next wave of sport and race-betting software (and yes it was well over US$1m in development).

We operate out of London, England for regulation and safety of a solid jurisdiction.

Sportshobby>>
Feverpitch can’t get stiffed by a big book going under – players and books alike have to post risk money up front. Feverpitch isn’t extending credit to anyone, and therefore can assure that the players money is safe, in an independent escrow account held in a bank in London, accountable to the public and audited regularly by Ernst Young. Even if the "brokerage house", if you like, goes broke, the players money is safe – now, I don’t think you could have a safer arrangement than that.

>>> Without guarantees of monetary safety, this concept just doesn't work.

We agree with you, that’s why we’ve taken the costly steps of creating a publicly traded company, setting up in London, and implementing escrow accounts that are totally separate from operational funds – in effect “trust” accounts.

ShiftySheik >>
As far as the prices and odds Shifty, the prices will always tend towards the best around. Why? If you think of it as being simple market forces taking place, where there is liquidity, where there is a market, where there are players free to “bid and offer”, if you like, and where there are players there will be competition to get bets on - therefore prices will continually be readjusting – just like in the stock market today.

However, even from the outset on the comission model, I think you may have misunderstood – the 5% on wins model goes like this: you bet $100 to win $100, Feverpitch takes $5. Final outcome: you bet $100 to win $95: almost as good a price as you can get anywhere.

You bet more: you’re commission goes down, your odds improve.

>> I'd rather see a bet exchange that specializes in the US market. Players post offers for anyone to take. The house collects a commision from the winner.

This is exactly what Feverpitch is, and we are currently running a free competition, I suggest you check it out to get a feel for it and let us know what you think. We are currently developing a fully-blown “exchange” model with a huge number of further advantages - versus what we have now, which is a pure “player to player” model.

I'll be back with a few more comments soon,
Regards
Feverpitch

[Bookiebar]

Re: Regulated/Segregated accounts

Originally posted by monkeykeeper
Person to person wagering is huge in Europe, Feverpitch has taken this concept but catered it to Americans (moneyline instead of decimal pricing).

Indeed, very innovative.

I first found out about Feverpitch through a online investment site. I am a gambler, and have invested in Feverpitch stock. I love the idea, the timing, and the opportunity to buy it in a ipo. I am not an employee of Feverpitch, but do help out with some ideas and feedback on the NA market.

You certainly need to be a gambler ! "Prospective investors are cautioned that an investment in an NCM Issuer is a speculative investment and may involve a high degree of risk. Such investments are designed for persons who can bear the loss of their entire investment."

You are right, to work the company must not only be public, but also in a regulated jurisdiction that makes it mandatory to keep escrow accounts for clients. It is mandatory is several island jdx's but they are never enforced.

The only place it is mandatory and enforced is in Australia.

Some questions for feverpitch,

The free contest, do you have measures in place to prevent people opening 20 accounts and middling their way to win?

Will you again be offering australasian sports?

[Feverpitch]

Contest and Australasia

Bookie bar,

Thanks for your comments.

Firstly, the comment about the investment has been taken out of context and is not a reflection of Feverpitch as an Investment or a Company directly. It is a mandatory requirement from the Stock Exchange to comply with the listing rules of the "NCM" market which is a board designed for smaller, entrepreneurial companies and subjects them to far stricter rules than larger public companies.

About the contest, we have definately been monitoring the players to ensure that we avoid what you refer to. We have already picked up a few attempts, and there are some players who won't be wondering why their names aren't on the leaderboard.

With regards to Australasian sports - we are definately considering it and have had requests from our old-members to re-open the Super12 etc, understandably considering many of them are Australasian. We may do that on the feverpitch.com site, but if you are Australasian, perhaps you could comment on what you think the potential demand might be for an Australasian version, a Feverpitch.com.au!

Kind Regards
Feverpitch

[Bookiebar]

The demand, who knows, that's something your obvioulsy in more of a position to answer. What was the demand like before you changed the system?

Are you legally able to advertise in NZ or Australia print and TV?

Also something that your site does not offer which your competition does is termed "best execution". Will you be offering this when you go live?

From what I can tell from the mock trial at feverpitch the way they match bets is a lot better for the punter.

From their site.

What is 'best' execution?

Betfair will always give you the best Odds or Price currently available on the system, even if you place your bet at a worse level (from your point of view) than those available.

For example, imagine you are happy to place an Odds Bet to back Manchester United at 2.5 for £150, and currently Betfair is showing available Odds of 2.5 for £150 and 2.6 for £100. When you place your order at 2.5 for £150, Betfair will automatically give you the £100 at 2.6 and just the remaining £50 at 2.5. In other words, it will always improve your Odds if it can.

In addition, if you leave an order on the system at 2.5 for £5 and one minute later someone leaves an order also at 2.5 for £1,000, you will always get filled first (however small your stake) i.e. first come, first served.

Betfair will always fill your order at a better level than you have requested, if there are Odds or Prices available to do this. You will never be given a worse level.