Articles - Online

It's quite nice to have a small group of friends who are always up for a casual wager, wouldn't you say? Most of us who enjoy a punt every now and then, have a chum or two we can count on to put his money where his mouth is, but imagine if there were 100,000 or so potential takers out there at any time. Thanks to the biggest trend to hit sports betting in years, that's exactly what we have.

Around two years ago, a new type of wagering service known as person-to-person (P2P) betting (also called "exchange betting') came onto the scene as a novelty of sorts that most serious gamblers and professional bookmakers considered a passing fad. In a nutshell, the phenomenon is gambling's version of eBay. Instead of the traditional B2C model, in which you're gambling against the house, the casual bettor wagers against other casual bettors. That is, Bettor #1 puts up a proposition to bet $50 on Team A, and Bettor #2 comes along and takes him up on it by placing $50 on Team B. The P2P service provider facilitates the betting by handling the money and providing the online platform and in turn takes a commission off of each bet. Kind of a neat concept, really: casual betting on a massive scale.

The "serious' gamblers and traditional bookies scoffed at it as one of many made-for-the-Internet gimmicks that was destined to fizzle and fail, but then something happened, the "serious' gamblers began to realize they could get much better odds at the betting exchanges, and the "gimmick' took off in an unprecedented fashion. Fast forward a few years and you have Betfair.com, the world's largest online betting exchanges and one of online gambling's biggest success stories to date.

Among a handful of betting exchanges struggling along, Betfair merged with its biggest competitor, Flutter.com, secured some funding and accumulated the volume of customers necessary to make the concept successful. Today Betfair consumes 90% of the P2P market, and 100,000 customers and $4 billion in annual turnover are hardly numbers to scoff at.

So, what's so great about betting exchanges? Simple. The competitive, open-market approach yields better prices. If you want takers, you've got to offer better odds than the next guy. That drives prices down - something the "serious' bettors can't ignore, and something the "serious' bookmakers can't offer.

The floodgates opened around a year ago. High rollers came aboard and many are profiting immensely from the favorable odds. More recently, it's been speculated that the traditional bookies are placing bets at P2P sites in an effort to balance their books (ensuring that there's equal action on both sides of bets).

Naturally, anything that stirs the pot this much comes with its share of controversy. The traditional books are outraged, and have appealed to government regulators, namely those in the United Kingdom, arguing that betting exchanges skirt taxation. Other places in the world prohibit this type of betting. And of course, there's a rather quiet contingency of traditional bookies that are either considering or have already begun offering P2P betting to their customers. A second point of contention has arisen in the horse racing business. P2P sites have gradually taken on race betting and the result, some say, is that jockeys, trainers and owners are apt to throw races because they know they can make a killing on the exchanges betting against their horses - a 21st century "Black Sox' (or "Black Hooves') scandal of sorts. Already accusations of such activity have been made in at least one such instance.

Scandals aside, the bottom line for the gambler is that betting exchanges are viable alternatives to traditional sports betting on the Internet. And the great thing about them is that the more popular they get, the more options there are for the bettors. Betting exchanges are driven by volume, which translates to a better variety and lower prices.

Get in while you can though. The taxman will come and ultimately level the playing field in the name of fair competition between bookmakers and P2P exchanges. Opportunities this great don't last long.

NUTS & BOLTS:

How does the typical betting exchange work?
The customer registers and deposits money into an account, just as he would at any other online sports betting site. But, instead of making selections from a list of fixed prices on various events, the customer gains access to a bulletin board of sorts in which other customers have posted propositions. It is up to the bettor, then, to accept someone else's (of course, only after shopping for the best price) proposition or put up a proposition of his own in hopes that someone accepts his bet. When the bet is won, or lost, the betting exchange's backend software automatically moves the money from the loser's account to the winner's account, while raking a set commission (typically 5%) into its own coffers. As betting exchanges evolve, their systems grow increasingly more sophisticated. One such innovation is the ability to match one person's wager against a number of smaller bets. (For example, Bettor #1's $100 wager is matched by $20 wagers from Bettors #2-6).

- Mark Balestra is vice president of publishing for the River City Group and the editor of Interactive Gaming News. He has written articles for numerous publications and authored The Complete Idiot's Guide to Online Gambling.

Line On Online by Mark Balestra

Last month's introductory article about online poker rooms offered a peek into one of Internet gambling's hottest games. This time around we examine more closely the things you need to consider in optimizing your online poker experience. You're on your own when it comes to gaining the skills necessary to be a champ, but the following items should help make the transition from felt to pixels a smooth one. Software: To Download or Not to Download

If you're accessing files on the Internet, then you're downloading, regardless of what type of platform any Internet poker room uses. But, when I refer to software downloads (as opposed to browser-based solutions), I'm talking about some rather large files. Since day one of the Internet gambling era, there have been generally two user-end software options. (The same applies for all Internet games). The first option, the client-side application, entails the user downloading and locally installing the bulk of the software that runs the games. This usually means downloading files that are at least a few MB (sometimes 10 or more) in size. (Of course, if you're surfing on a vintage 14.4 or the likes, you could always just have them mail you a free CD.) The advantage is that the software can be very robust (graphics, animations, sounds, etc.) without having to constantly pass files back and forth over the Internet. The disadvantage is that you have to go through the process of downloading and installing, so there's a bit of a commitment to make; you can't easily glide from one poker room to the next in search of a good table. 

The other option is browser-based software, that is, the games are almost entirely based on the server instead of your computer. Browser-based games are typically available in formats that can be read by most browsers - platforms driven by Java, Shockwave, etc. The main advantage of playing these games is that there's little commitment to be made. If you get into a browser-based poker room that you don't care for, you can quickly move on to the next one. A second advantage is that you can play from any computer, whereas with downloaded games, you can only play from computers onto which you've installed the software. The down side of browser-based games is that they aren't as robust. This is because files are constantly being transported from the server to the client computer and if those files are too big, the game will drag horribly. Even with the smaller files, there's a noticeable difference in the speed of game play; downloadable applications run much more quickly and smoothly.

Collusion Control

The online poker player's worst nightmare (aside from chasing hands into ruin) is collusion among his opponents. Tables at bricks-and-mortar poker rooms are closely watched to prevent players from passing information to and from one another, but how do you stop this in an online poker game? How do you know you're not sitting at an online poker table  with several opponents who are sharing information with each other over the phone? 

It's a terribly frightening thought and a legitimate concern, but quality online poker rooms address collusion and are generally successful at minimizing it. The process begins with software. Any worthy online poker room will have a back-end system with built-in controls for detecting patterns that point to cheating. On top of that, it should have the ability to closely monitor game logs and walk through archived hands, card by card. Software can track what certain players do in relation to other players' moves and analyze the activity to determine whether there's cheating going on. Naturally, there's no true replacement for having a live person monitoring the play and many virtual poker rooms offer just that. There's usually a "floor man" on hand who is available, by request, to monitor players accused of cheating. Before playing at any online poker room, read the site's "about" pages and make sure the above controls are firmly in place.

Tournament Play

I remember so well when the first multi-player poker rooms were popping up, the traditionalists said there was no way the action online could ever compare to that of real, live table poker. One of the main reasons for this sentiment was that many serious players are all about tournaments, and virtual poker couldn't accommodate. That was true then, but these limitations no longer exist. Virtually all of the leading online poker rooms offer some kind of tournament play, and the beauty of it is there's something out there for all skill levels and at all stakes. Some poker sites have weekly tournaments with modest prizes; others are striving to attract the big boys. The true arrival of Internet poker was perhaps evidenced by last year's PartyPoker.com Million, a $1 million tournament included in the internationally broadcast World Poker Tour.

Private Rooms

On the other end of the spectrum is the invitation-only ring game. This feature is especially valuable for serious players who don't want to waste their time with casual games. It's an opportunity to play with a select group at whatever stakes the group wants and it's becoming an increasingly popular option at many online poker rooms. 

Starting Points Online

Everything I've offered in this article falls into the category of things you need to know before you get started. When you actually dive into the world of online poker, there are plenty of online resources that can help make your experience a good one. Following are a few sites worth hitting:

www.PokerTracker.com: software that enables players to analyze their online Texas Hold'em play.

www.PokerPulse.com: a site that monitors and measures game play at the Web's most popular poker sites.

www.OnlinePokerReview.com: designed to help players choose which poker room is best for them.

www.PokerCritic.com: reviews online poker rooms and information on tournaments, incentives, bonuses, etc. 

PokerPortal.tripod.com/index.html: links to many online poker rooms as well as to other sites with helpful information. 

Mark Balestra is vice president of publishing for the River City Group and the editor of Interactive Gaming News. He has written articles for numerous publications and authored The Complete Idiot's Guide to Online Gambling. 

|Top|