The culture and legality of wagering and trading on sports differs greatly around the world. The terms white, grey and black are the common vernacular to describe the varying degree of acceptability in each territory. In the UK, sports betting and trading has been fully legalised for decades and almost every shopping district in every town and city hosts a range of retail bookmakers.
Europe as a whole is generally considered to be fairly well advanced in legislative matters in sports betting and contains some of the leading licencing authorities globally including the Isle of Man, Malta and Gibraltar. However the largest markets globally; China, India and the US take a very different legal view of sports wagering.
The appetite for betting on any sport, whether it be football, basketball, NFL, cricket or tennis, also differs between cultures, but it is fair to say that every country in the world has some degree of sports trading appetite in its population. In Asia and the US, both generally considered to be grey markets (except for some exceptions like Nevada and on some sports such as horse racing), these markets’ demands are supplied via a pyramid of agents. Local, bottom-tier agents will supply the retail market and provide wagering facilities ‘on the ground’. A system of credit is often used, rather than cash deposit, with settlements between the local agent and the player made on a weekly or monthly basis, depending on level of credit supplied.
The Asian betting industry is entirely different to its European counterpart. The agent system itself, and the Asian handicap betting product, is very much the result of how the industry has developed along cultural and historical lines. Asian bookmakers have been using agents long before the internet came about, as it enables their services to be offered to clients in regions outside their immediate reach and in neighbouring countries. Once an agent has reached a certain level of liability or risk, they will pass this on to other more ‘senior’ agents. At every level of the pyramid, an agent has a rough guideline of their credit risk and once this level is reached, they too will pass on trades or hedge their position along the chain to the next tier. This continues until it reaches the ‘master agent’, who will place the bet with the bookmaker, in effect completing the pyramid structure.
Looking at this structure from the top downwards; once an operator has opened a book, it will usually appoint an individual master agent for a specific country. This Master Agent will be given a certain amount of credit and deposit and will sometimes share in the risk of the book. The master agent will then have his own sub-agents, who will also place some deposit and get a certain amount of credit and may negotiate their own deal where settlement is on turnover rather than on losses. These agents will find their own sub-agents and will set up similar payment and credit structures, all of them earning commission from the losses of their end-user players. Each part of the chain becomes responsible for its reporting own line.
The earnings model for agents is as follows: the bookmaker takes commission on wagers and gives the ability to take up to a certain percent of risk on bets to Master Agents. The Master Agent often makes a risk deposit at the Asian betting office, to guarantee the payment of winnings from bets. The Master Agent can then pass on a specific part of his commissions as well as the ability to assume risk on bets to his Master Agent and the Master Agent can do so for Agents.
The system may sound somewhat complicated, but it ensures that single person is ever responsible for the entire betting accounts of players – rather the entire pyramid of agents supports it. The deposits and bet winnings of customers are therefore guaranteed no matter what happens. Agents with poor reputations quickly find themselves out of a job, with no chance to return.
Sports Trading Network includes many reputable agents operating from licensed jurisdictions globally. These agents ring-fence deposits, settle promptly and can source accounts from a large number of licensed Asian bookmakers. In addition they are able to take on very large volume trades at best-price without closing winning accounts. In some cases, a credit line can also be negotiated to offer traders the possibility to significantly leverage their trading levels. Finally, for those trading individuals or syndicates using auto and high-frequency execution, the Network’s agents can supply online accounts to support such trading activity.