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Comment by bettringf | Hacker News Reader

I worked at a quant sports betting trading company, on occasion it would send the employees to place annonymous few grand bets at physical shops because it's such a problem getting people to continue accepting your bets if you are any good.

And found out that the more you bet, the more percentage commission you pay to exchanges like Betfair, which is quite contraintuitive - commission goes up with volume, not down.

I also learned a few tricks of the industry - when you open an online account they look up your address on Google Maps to see what kind of place you live in.

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My betfair commission was heavily discounted back in the day, but that was only on volumes of ~£50,000 a day, and a fair bit more on weekends. Nevertheless their commissions were outrageously high, but the scale of the liquidity they had available was amazing.

50k a day, was that money you were betting? Or were you managing a betting service and betfair was the underlying exchange? I know very little about that world

~£50,000 a day in trading volume, that's a lot! What markets were you trading on?

> it's such a problem getting people to continue accepting your bets if you are any good.

Why don't they just use those people to adjust their odds faster for everybody else ? Or do they limit the size you can bet rather than just banning you ?

> I also found out that the more you bet, the more percentage commission you pay to exchanges like Betfair, which is quite contraintuitive - commission goes up with volume, not down.

I guess they try to cream the most addicted people, seems quite intuitive to me.

> Why don't they just use those people to adjust their odds faster for everybody else ?

Volumes are not huge like in finance, you will lose more on the bet that you will make back in your marginally improved odds.

> I guess they try to cream the most addicted people, seems quite intuitive to me.

The professionals, not the addicted. The addicted expire quickly and they typically don't use exchanges anyway.

Top sports books do that already. Lesser sports books don't have enough liquidity to react in real-time. In fact a simple winning strategy is to check what odds Pinnacle gives and see if any bookie offers better odds (arbitrage betting). It will only work for 2-3 bets before you're rate-limited though.

Yeah this is the entire business model of oddsjam. They basically offer a service that compares all book odds to pinnacle and call it "plus EV betting".

> Why don't they just use those people to adjust their odds faster for everybody else ?

The logic of bookies is simple: Don't do business with people who win more than they lose.

It doesn't matter how the customer is getting an edge. A brilliant algorithm? A complex arbitrage system? Deep insight from years studying the sport? Cheating? Time travel? The bookies don't care.

The only thing that matters is, if you win more than you lose you've got some sort of edge. And if you've got any sort of edge, it's more profitable not to do business with you.

Same for casinos. That's why they kick you out if you win too much or too often. They don't need to prove you did anything wrong like cheating. If you aren't making them money you're out.

>Why don't they just use those people to adjust their odds faster for everybody else ? Or do they limit the size you can bet rather than just banning you ?

Some of them ban outright and some restrict your stake. When I worked for a bookmaker we had an account that had made several hundred thousand £s from us and was limited to betting relatively small amounts. He would always bet as soon as our odds would open and then we'd adjust them.

I thought the point of bet exchanges was that you're betting against other users, so the exchange doesn't have to care how good you are or how much you're betting. Why would they add friction for high rollers? Old bookmaker habits, or they're more than just a platform provider and are participating in the markets?

Are you able to tell us more about your operation? Size, scale, profitability etc?

How were you compensated? You mention 'shops', so I'm guessing this was in the UK?

Could you not just bet with the Asian bookmakers? (sbo, pinnacle, ibc etc.)

Pinnacle (not sure it's 'Asian', I believe their main offices are in Toronto) takes a lot of action on major markets. For smaller markets such as player props, Pinnacle takes very little. If you were confident in beating major markets, such as EPL or NFL, Pinnacle will very regularly take $50k a click, with rebets possible. However, if you're betting major markets, even the 'softer' books such as DraftKings would probably be willing to take a lot as well.

The soft books usually kick out or limit players if they are beating smaller markets such as player props, team props, derivatives (for example, a 1Q team total, etc). A 'sharp' book such as Circa or Pinnacle might not explicitly limit an individual player, but in general they don't offer as many markets, so it's not an apples to apples comparison.

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