Please tell me whether this is possible, because I see that if it is, it could be a goldmine. I am asking this question from a point of ignorance because I am not so tech savvy so give me some rope. Is it possible to design a matchmaker system (website) that specializes in games that have only two possible outcomes (one team/individual must win). The idea is that, instead of setting the odds like most bookies (sportpesa et al) do, the gamblers set their own odds and if they get a match who is willing to take the opposite side of the bet, they both deposit money in an escrow account and wait for the results. You, as the facilitator (website owner/matchmaker), will earn say 5% of the earnings as fees. You dont set the odds, the gamblers set the odds on their own and if they get a willing partner to bet against them, the deal is sealed. It is basically like trading sports futures.
Example 1:
Lets take an example of today’s game. One team must win, either France or Belgium. There are two gamblers, Oduor and Mutiso. Oduor believes that France will win and Mutiso thinks that Belgium will win.
[ol]
[li]Oduor logs into the website.[/li][li]Oduor fills in his contract. He is the market maker, and puts the odds as 2 in favor of France i.e if he wins, he doubles his money minus matchmaker fees.[/li][li]Oduor deposits his money in the exchange’s escrow account.[/li][li]The contract enters the free market.[/li][/ol]
Mutiso logs into the exchange/website from the other end.
[ol]
[li]Mutiso fills in his contract. He sets the odds as 2 in favor of Belgium. If he wins, he doubles his money minus matchmaker fees.[/li][li]Mutiso deposits his money in the exchange’s escrow account.[/li][li]His contract is executed by the system at the market price because he is immediately matched with Oduor.[/li][/ol]
The game ends with a win for Belgium. Assuming each put in Ksh 1,000 Mutiso will walk away with Ksh 1,900 after the matchmaker fees are deducted.
Example 2:
Lets assume that somehow, Barcelona and Aston Villa have reached the UEFA league final. In this match, there are only two possible outcomes because it is a final. There are two gamblers, Engiti and Bingwa. Both know that the probability is high that Barcelona will win. Therefore, assuming Eng’iti fills a contract at the odds of x2, his order will not be filled at the market because nobody will be willing to bet against him. However, if he sets his odds at 1.2, the situation will unfold as follows:
[ol]
[li]Eng’iti logs into the website.[/li][li]He fills in his contract. He is the market maker, and puts the odds as 1.2 in favor of Barcelona i.e if he wins, he makes a 20% ROI on his money minus matchmaker fees.[/li][li]He deposits his Ksh 1,000 in the exchange’s escrow account.[/li][li]The contract enters the free market.[/li][/ol]
Wakanyama logs in somewhere near Mt.Kenya.
[ol]
[li]Wakanyama fills in his contract. He sets the odds as 6 in favor of Aston Villa. He knows that the probability of Villa winning is low, so he expects to 6X his investment if he is right minus matchmaker fees.[/li][li]He deposits Ksh 200 in the exchange’s escrow account.[/li][li]He is immediately matched with Eng’iti by the system.[/li][/ol]
The game ends and somehow, Aston Villa wins. Wakanyama takes home Ksh 1200 from the escrow account, minus 5% fees. So his net is 1140. If Engiti had won, he would have taken the 1140 instead.
NB: I have used matchmaker fees of 5% for simplicity. When trading futures and other financial instruments, the fees are much lower (1%-2%).
How does this system differ from Sportpesa etc
In this system, you are not betting against the house. Instead, you are betting against a fellow gambler. The website is not a bookie but an exchange to facilitate two gamblers in different geographical locations to bet against each other.
Advantages:
- It has significantly better returns than sportpesa etc, because professional gamblers can hunt for bargains. Odds for each game are not fixed, so the gambler has the freedom to choose the odds that he thinks are in his favor or set his own odds and hope he gets filled.
- You don’t bet against the house. Professional gamblers can therefore be consistently profitable in the free market system. In most systems like sportpesa etc, the house always wins and all gamblers always lose in the long run. In this system, the exchange just takes the fees. Professional gamblers can win in the long run because they are betting against fellow gamblers, not the house.
Disadvantages: - Some orders may not get filled if the gamblers fill unrealistic odds because it is a free market. You don’t expect your X3 odds Barcelona game (where you favor Barca) to get filled. Nobody will buy that contract.
- Users need a little education before using the system to understand how to set their odds.
- The system can only be applied in games with only two possible outcomes, win or lose i.e finals, knockouts etc.
So, gamblers wa huku, would you use such a system where you bet against a fellow human being and not sportpesa software??? @Deorro na wengineo, how feasible and practical is such a system? It works perfectly for futures contracts, can it be applied to sports betting??
Link: https://www.gamblingjudge.com/best-sports-betting-exchanges/