As global sports betting markets evolve, so does the bookmaker’s efficiency in managing risk. Moving the price in time, hedging to reduce liability and reacting to in running events are crucial in trying to stay ahead of the ever more sophisticated punter.
Although most sportsbooks have their own ratings to set their prices for a sporting event, many also copy or “scrape” the market prices from others. This could be for the purpose of keeping their prices in line with others. They may not wish to be the best market price on all or certain selections. Should a competing sportsbook or a ‘whale’ place a very large trade, other sportsbooks are able to see the shift in price this causes. This in turn means they can shift their price accordingly without being susceptible to large amounts of risk. This movement to shorten a price pre-empts the trader increasing his exposure at the same price or arbs them because they are slightly out of line.
By shortening the odds in reaction to a large stake elsewhere, the bookmaker who hasn’t taken the initial volume at best market price, can adjust their price with this knowledge in mind. The initial bet may have just been a punter wanting to have a large bet or more worryingly for the bookmaker, he might be a ‘smart’ player. This could be a professional individual or betting syndicate who derive their own prices from complex mathematical models using things like Poisson distribution and regression analysis. They may have sifted through masses of data and statistics to come up with their own prices and try to beat the bookmakers long term. It is key for bookmakers to stay ahead in this way.
…in Asia the accounts will not be closed or limited and the desired volume can be placed with one book.
On the other hand the professional sports trader or syndicate will always look for ways to get around such price moves if they are seeking to place large bets at the best possible price. They want to avoid what is known as “slippage” in the industry. Slippage can be prevalent in any market, not just betting. It can be found in well established institutions such as the financial markets. Slippage is the difference between the expected price of a trade and the executed price.
For example, if a large betting syndicate was attempting to place a big bet at best price they would log into one bookmaker, place the available volume at their requested price. This may well be accepted and executed. However, if their desired volume is larger than that available with the initial bookmaker, the price may slip by the time they move onto the next bookmaker and log in again, select the bet, enter the stake etc. If this is multiplied across half a dozen bookmakers, their desired price will be long gone and they may have only got a very small amount of their initial stake on.
Professional traders who attempt large volume trades in the western markets are frustrated at the small wagers they will no doubt be limited to if they are long-term winners. If they are reduced to this multiple log in process, they will spend a long time getting any significant volume of trades successfully matched.
This basic market mechanism which is prominent in Europe, has driven ‘smart’ European players to look towards Asia for large volumes and slim spreads, especially in football trading. Whereas long-term successful traders in Europe face many challenges, in Asia the accounts will not be closed or limited and the desired volume can be placed with one book.
Sports Trading Network includes very large and successful software companies based in Europe that allow professional traders to place large volumes across multiple bookmakers at best price with one mouse click. The multiple placing means that all trades with each bookmaker is executed at the same time at a user-determined price and volume. The result is best price, large volume without sacrificing extensive time and effort across multiple interfaces. This applies to both deadball and in running betting where time is key. The most commonly traded global sports such as football, basketball, tennis, golf and cricket, can all be traded in this way.