Business of Betting - Ep 210 Matthew Trenhaile

Podcast Release Date:
Podcast Link:
hagrinBPR Review Date: 2024-04-30 19:52:57
Rating: 7.50

Notes:
Bias - Have consumed a lot of Matt recently, hard to cover a ton of new ground. Also saw some reviews so didn't go in fresh like normal, behind due to NFL Draft week. Obviously, big fan of Matt's.

This podcast is not for everyone and I can understand why Fezz' smol brain had issues listening to this one. It's basically two industry insiders having an insider conversation that's recorded and released as a podcast. Not a ton for sports bettors, the target audience for this would be like other operators, market makers and the Aussies/Kiwis to get mad about something. I enjoyed it, but I imagine not many others will because it’s not super applicable.

3:45 - Jason mentions politics, take a shot.

Pod starts out with Matt asking Jason questions which is a good twist. Goes through Jason's beginnings and interests in sports betting exchanges. Matt asks about what the secondary plan was for Smarkets if Betfair matched their fee/price approach. Jason replies with "social aspect" and then does some history of social networks which is not even close to remotely accurate (sidenote - I was actually acquaintances with theGlobe guys although I never used SixDegrees). Matt questions if they ever succeeded on the social side and Jason says they basically found that not only were these features not prioritized, but there's a ton of noise in the features.

13:00 - 17:00 - Basically a talk about the BetFair API and the decisions to either build on it or not. Jason makes an interesting point at the 20:00 mark which is
APIT users are +EV bettors and so opening up our market making, which was buggy, in this open garden environment, was too risky so API access just for market making not taking.

23:30 - For 4-5 years, their internal market making basically just broke even and that was the necessity of needing provide liquidity and the bigger liquidity providers just never showed up so by 2014 the internal MM goes from breaking even to consistently making money. Matt questions if there were ever discussions about "the adversarial relationship" with their customers if they are doing internal market making and Jason replies it was an ongoing convo to be "good stewards of the exchange" (good phrase) and then adversarial at the same time. Talks about having to implement some "guardrails".

29:00 - Need to have "losing money in the system". Says just like BetFair their volumes going down for a few reasons, but one is not attracting retail flow.

33:00 - Matt argues that crypto trading is a bigger threat to new exchange customers than any bookmaking propositions. (Sidenote - I can see both sides of this. There's some finite $ amount of liquidity, these other options are siphoning not only $s but time investments and crypto is the best video game ever invented. On the other hand, the SGP phenomenon is very real and only seems to be picking up steam. Hard to measure which is "bigger", but I'm going to chew on it.) Jason mentions "the crypto thing wasn't really around 5, 6, 7 years ago and even Binance had launched in 2017 with the ICO mania by then so that's not right (Jason reminds me of me, just terrible with dates). Jason does bring up 0DTEs too, "lottery bets" and he seems closer to the right answer.

Bunch of Sportradar chat that I didn't really have any notes for. Then some Forex analogies for sportsbetting. Been like 15 minutes and I'm not sure what's even been said a lot of words though.

48:00 - Political betting is "slow". Small, very enthusiastic group of bettors really driving that market. Smarkets MMs basically everything. Lot of one side orderflow in these political markets.

55:08 - Talks about in the past building the idea conceptually before the "Cash Out" option was that you could get out of your bet /lay and get out on exchanges. 57:45 - "Yes, Smarkets tried a blunt approach to providing liquidity" after Matt asked a 46 minute question about visual impression of liquidity. Re: this idea of "meaningful liquidity". "Perception matters you've got to fill the screen." Followed by liquidity size behind the "top of book" quote and what that optimal size and layering might be like (i.e. a pretty technical MMing discussion).