Balance of Power in Betting Exchange Market Shifting
A recent report from eGaming Review (EGR) shows that the betting exchange powerhouse Paddy Power Betfair (PPB) experienced a rare 7% drop in revenue, while their exchange competitors are seeing an uptick in numbers. It seems customers are responding to, among other things, lower commissions.
Matchbook has been attacking Betfair’s bread & butter business with 0% commissions on horse racing, which traditionally accounts for roughly half of PPB’s revenue. Other competitors are doing similar promotions and it’s working for them, too. But while 0% commissions won’t last forever, it may be enough to tilt the scales in favor of the other players in the betting exchange game.
Enter Bookie, which promises to disrupt the betting industry in its own way, with provably fair gambling on the lightning-fast Peerplays blockchain. Time will tell how Bookie’s launch will affect the bottom lines of major exchanges like Betfair and Matchbook - not to mention new(er) players Smarkets and Betdaq - but with industry-low commissions and no opportunities for bad actors or shady operators, Bookie is sure to make a name for itself from the time it launches after World Cup 2018!
You can read the EGR report here, but please be aware there is a paywall on the site.
Interesting from a bettor's standpoint, but we caution making any grand projections about long term market share when competitors BUY the market share with low prices. If the low prices are sustainable, then Paddy is in trouble. But in this case it's a promotional price, and there's a big difference.
Promotions attract customers adversely. In other words, discount pricing can attract customers you don't really want anyway, bc they just attack the promotions without really doing what the promoter wants which is for the new people to be long term customers. Quickly said, easy come, easy go.
Bookie should be a huge success if they project a model which offers long term discount pricing. But long term discount pricing has a downside, in that there will be less profits for the owners of Bookie's economics. So over time, those making decisions at Bookie will have to choose-- give money back to the people (a form of charity really), or raise prices to benefit the owners of Bookie assets.
Which will it be, and will there be a "Constitution" or "Mission Statement" Bookie users can rely-on, so that early discounted pricing doesn't just result in a short-term product which will evaporate as soon as the prices are raised.