By Alan English
Here's a question for you. Why do bookies drive Cadillacs? Why do British
bookies like Ladbrokes and William Hill have market capitalizations in billions
of dollars? The answer is pretty simple. It's because the odds are stacked in
their favor. And why is that? Easy. Because they decide the odds.
Hard to believe, but most bettors don't even realize that they are being
systematically fleeced. Bookies take refuge behind numbers. Most bettors are not
willing or able to do the math that would make it clear just how much the odds
are stacked against them.
Say you have 10 horses in a race and the bookie is offering odds ranging from
2-1 to 40-1. The smart bookie will have one thing in mind when he lays those
horses: try to make sure whatever horse wins, he wins too. Doesn't always work,
but slowly but surely most bettors will lose their money. It has always been
that way. It's a numbers game and the bookies crunch the numbers.
But guess what? Things are starting to change. I'm talking about a revolution
in wagering. What if there was a place where bettors could have some action
between themselves, thus cutting out the bookie?
Say it's Week 1 of the NFL season, Philadelphia at Tennessee. I like the
Eagles and some guy in Nashville is convinced the Titans are looking good this
year. We both like a little wager, so what are the options?
We could go to our regular bookie and take whatever odds he's offering. We
would just have to accept that in-built in those odds is a vig, otherwise known
as the bookie's profit, no matter who wins the game.
Alternatively, we could be part of a wagering revolution and log on to
tradesports. It's a sports trading exchange, an electronic marketplace where
people with differing opinions on the outcome of a sports event come together.
They're called buyers and sellers - just like in a stock exchange. Unlike
bookies, TradeSports has no interest in the outcome. It makes its money by
taking a $0.04 fee for every $10 bet that is traded over its exchange.
So how does it work? Well, TradeSports will offer a contract on one team to
win, let's say Philadelphia. That contract will 'trade' anywhere between 1 and
99 and will 'settle' at either zero (the Eagles lost) or 100 (they won).
So if I want to bet on the Eagles, I buy the contract - if I'm feeling
bullish I might buy 100 contracts, if I just want an interest I might buy just
10. The guy in Nashville will 'sell' the Philadelphia contract. They key point,
though, is the price at which we buy and sell. This is where, ultimately, the
bookies will not be able to compete. This is the true value proposition of
TradeSports.
Only a true exchange can offer fair value. If enough buyers and sellers come
together, it is a certainty that they will get better odds than any bookie can
offer. A betting exchange in the UK called Betfair has proven this conclusively.
TradeSports is poised to do the same in the US. That means the Eagles fan and
the Titans fan can both get better odds. If a bookie is offering odds of 2-1 and
you can buy the same team on TradeSports for a price of 28, that means you are
getting odds of 5-2. After only five months, TradeSports has a proven record of
offering superior value. In golf tournaments, exchange prices have often been as
much as 30% better than with a bookie.
Person to person wagering is the future. It is a concept made possible by the
Internet and it is going to be huge. TradeSports is at the vanguard of that
revolution.
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