U.S. patent application number 12/645917 was filed with the patent office on 2010-04-22 for betting exchange system.
This patent application is currently assigned to THE SPORTING EXCHANGE LTD.. Invention is credited to Andrew Wilson Black.
Application Number | 20100099489 12/645917 |
Document ID | / |
Family ID | 9889390 |
Filed Date | 2010-04-22 |
United States Patent
Application |
20100099489 |
Kind Code |
A1 |
Black; Andrew Wilson |
April 22, 2010 |
BETTING EXCHANGE SYSTEM
Abstract
A betting exchange system receiving bet requests from a
plurality of users over a communications network, each of the
requests comprising a bet backing an outcome or laying an outcome.
The betting exchange system matches respective bets which back and
lay a given outcome, and automatically arbitrages unmatched bet
requests to thereby generate one or more implied bets made by the
system in respect to an outcome for which no bet requests have been
received. The implied bets are generated so that the system does
not lose money on the implied bets taken together.
Inventors: |
Black; Andrew Wilson;
(London, GB) |
Correspondence
Address: |
STAAS & HALSEY LLP
SUITE 700, 1201 NEW YORK AVENUE, N.W.
WASHINGTON
DC
20005
US
|
Assignee: |
THE SPORTING EXCHANGE LTD.
London
GB
|
Family ID: |
9889390 |
Appl. No.: |
12/645917 |
Filed: |
December 23, 2009 |
Related U.S. Patent Documents
|
|
|
|
|
|
Application
Number |
Filing Date |
Patent Number |
|
|
09959975 |
Jan 16, 2002 |
|
|
|
PCT/GB01/01141 |
Mar 15, 2001 |
|
|
|
12645917 |
|
|
|
|
Current U.S.
Class: |
463/25 ;
463/42 |
Current CPC
Class: |
G07F 17/3288 20130101;
G07F 17/3279 20130101; G06Q 40/04 20130101; G06Q 50/34
20130101 |
Class at
Publication: |
463/25 ;
463/42 |
International
Class: |
A63F 9/24 20060101
A63F009/24 |
Foreign Application Data
Date |
Code |
Application Number |
Apr 6, 2000 |
GB |
0008530.8 |
Claims
1-23. (canceled)
24. A betting exchange system comprising: a computer receiving bet
requests from a plurality of users over a communications network,
each of said requests comprising a bet backing an outcome or laying
an outcome, matching respective bets which back and lay a given
outcome, and automatically arbitraging unmatched bet requests to
thereby generate one or more implied bets made by the system in
respect to an outcome for which no bet requests have been received,
wherein the implied bets are generated so that the system does not
lose money on the implied bets taken together.
25. A betting exchange system comprising: means for receiving bet
requests from a plurality of users over a communications network,
each of said requests comprising a bet backing an outcome or laying
an outcome, means for matching respective bets which back and lay a
given outcome, and means for automatically arbitraging unmatched
bet requests to thereby generate one or more implied bets made by
the system in respect to an outcome for which no bet requests have
been received, wherein the implied bets are generated so that the
system does not lose money on the implied bets taken together.
Description
FIELD OF THE INVENTION
[0001] This invention relates to the field of betting, particularly
but not exclusively to sports betting conducted over the
Internet.
BACKGROUND
[0002] A number of companies provide Internet based betting
services. The majority of these are simply an extension of
conventional betting services, offering fixed odds betting in which
customers only have access to one side of the market, i.e. they can
only efficiently back, or "buy", a particular outcome to occur at
odds set by the bookmaker. However, it is often far easier to
decide what is not going to occur rather than trying to decide what
will occur. In this situation, though, customers are not able to
place a bet to support their view. While it is true that they can
try to simulate laying, i.e. "selling" the outcome by backing all
other possible outcomes, this is highly unlikely to be profitable
due to the overround charged by the bookmaker. The overround is the
extent to which the bookmaker's total book exceeds 100% and
represents the bookmaker's primary source of profit. In the UK, a
typical overround is 10-15%.
SUMMARY OF THE INVENTION
[0003] According to the present invention, there is provided a
betting exchange system comprising server means configured to
receive bet requests from a plurality of users over a
communications network, each of said requests comprising a bet
backing an outcome or laying an outcome, wherein the server means
is operable to match respective bets which back and lay a given
outcome. Allowing a user access to both sides of a betting
transaction, by specifying whether he wishes to back or lay an
outcome, provides the user with additional flexibility, and can
facilitate a liquid two-way market. In addition, it can ensure the
most efficient, and hence competitive, prices.
[0004] The bet requests can include a price at which the bet is to
be placed, which can promote price competition and improve the
efficiency of the market. If a better price is available to the
user, the system can match the bet at the better price.
[0005] The server means can further comprise means for
automatically generating an implied bet in respect of an outcome
for which no bet requests have been received. This can generate
arbitrage opportunities and so allow bets to be filled
automatically by the system even though there may be more explicit
interest in one side of the market than the other.
[0006] According to the invention, there is further provided a
method of operating a server configuration to provide a betting
exchange system, comprising receiving bet requests from a plurality
of users over a communications network, each of said requests
comprising a bet backing an outcome or laying an outcome, and
matching respective bets which back and lay a given outcome.
[0007] According to the invention, there is also provided a
computer program configured to provide a betting exchange system on
a server machine, said program implementing the steps of receiving
bet requests from a plurality of users via a communications
network, each of said requests comprising a bet backing an outcome
or laying an outcome, and matching respective bets which back and
lay a given outcome.
BRIEF DESCRIPTION OF THE DRAWINGS
[0008] Embodiments of the invention will now be described by way of
example with reference to the accompanying drawings, in which:
[0009] FIG. 1 is a schematic diagram showing a betting system
according to the invention;
[0010] FIG. 2 is a flow diagram showing the steps required to
access the betting service provided by the betting system of FIG.
1;
[0011] FIG. 3 is a screen shot showing a pricing screen
illustrating an example of betting on a football match;
[0012] FIG. 4 is a flow diagram illustrating the operation of the
betting exchange system according to the invention;
[0013] FIG. 5 is a screen shot showing a first change in the
pricing screen of FIG. 3 following a bet placed;
[0014] FIG. 6 is a screen shot showing a second change in the
pricing screen of FIG. 3 following a bet placed;
[0015] FIG. 7 is a screen shot showing a pricing screen which
illustrates the arbitrage feature of the invention;
[0016] FIG. 8 is a screen shot showing the change in the pricing
screen of FIG. 7 following a bet placed;
[0017] FIG. 9 is a screen shot showing a pricing screen
illustrating one example of the creation of implied bets;
[0018] FIG. 10 is a screen shot showing a pricing screen
illustrating a further example of the creation of implied bets;
[0019] FIG. 11 is a screen shot showing a pricing screen which
illustrates line betting;
[0020] FIG. 12 is a screen shot showing the change in the pricing
screen of FIG. 11 following a further bet placed;
[0021] FIG. 13 is a screen shot showing a pricing screen which
illustrates spread betting;
[0022] FIG. 14 is a screen shot showing a change in the pricing
screen of FIG. 13 following a bet placed;
[0023] FIG. 15 is a screen shot showing a change in the pricing
screen of FIG. 14 following a bet placed;
DETAILED DESCRIPTION
[0024] Referring to FIG. 1, a betting exchange system according to
the invention is implemented on a server 1, for example a server
machine running Windows NT.TM., connected to a back office database
system 2, for example an Oracle or SQL relational database server.
The database server 2 includes database storage for a comprehensive
sports statistics service to be provided in conjunction with a
betting service. The server 1 is connected to the Internet 3. The
server is accessed over the Internet 3 by a plurality of client
machines 4, for example personal computers running web browser
software such as Microsoft Internet Explorer.TM. or Netscape
Navigator.TM. and using dial-up connections through respective
Internet Service Providers 5. Access to the server 1 is restricted
by, for example, a firewall and other known security measures.
Other access methods are also envisaged, for example use of WAP
(Wireless Application Protocol) phones to access a betting service
running on a WAP server.
[0025] The server 1 includes a web server, for example the
Microsoft IIS.TM. web server, to support web pages.
[0026] The betting exchange system is implemented in software and
betting is permitted through pricing screens displayed on a web
page, as shown for example in FIG. 3 for fixed odds betting and
FIG. 11 for line betting. The operation of the betting exchange
system is explained in detail below for different betting
types.
[0027] Referring to FIG. 2, a customer wishing to use the betting
service provided by the betting exchange system accesses the
website using his usual Internet access mechanism (step s1), and if
he or she has previously registered, logs-in (step s2). If the
customer has not previously registered, he goes through the
registration procedure (step s3). Registered users have full access
to all areas of the site. Only registered users can place bets on
the exchange, subject to ensuring that there is sufficient credit
in their account. Guest access to the site is also provided, but
guests are not allowed to place bets on real events, although they
are given full "read only" access to the site's statistics screens
and betting screens. This allows them to follow the market closely.
In addition, they are given access to a real time betting game that
demonstrates how the betting exchange system works. As long as a
user is not using the site on a registered basis, there is a button
continuously visible that will take the user to the registration
screen.
[0028] The registration procedure involves filling in a personal
details form on the website's registration page, including an
e-mail address, a user name and a password as well as the currency
in which the customer would like his account to be managed. At the
same time, an account is opened for the customer (step s4). Money
can be deposited into the account via an Internet secure cash
payment system, by telegraphic transfer or by telephone. Once the
account has been opened, the customer is sent an e-mail containing
an authentication code. The first time that the user logs in with
their username and password they are required to enter the
authentication code, to validate the e-mail address given in the
registration process. When the user logs in subsequently he does
not need to re-enter the authentication code.
[0029] The website provides each customer with detailed information
about his betting activity. For example, a customer can quickly
pull up a list of all his bets which are outstanding, both those
that have been filled and those which are pending, the meaning of
which is explained in detail below. This list can be sorted by
event, by size of bet and by type of bet. A customer can also
obtain a complete historical list of all bets placed and the
outcome of each bet (i.e. win or lose). Furthermore, the customer
can analyse his betting history in a number of ways, for example
over any time period and for individual sports. All historical bets
can be sorted by sport, by size, by type and by
success/failure.
[0030] The betting exchange system also produces a comprehensive
statement of account. This will show details of all transactions
that impact the customer's account (e.g. deposits, withdrawals,
bets and so on) and will provide a full reconciliation showing how
current balances have been achieved.
[0031] Customers can tailor the website to meet their own
requirements. They can decide what level of confirmation they
require when placing bets, choose how the betting information
appears on the screen, for example, view more than one market on a
screen at any one time or create individually customised own
composite pages, and select how graphically intensive the various
screens are.
[0032] Once the customer has logged on, the system displays the
status of any outstanding bets from a previous session, the outcome
of which has not yet been confirmed by the customer (step s5). The
customer then chooses the event on which he or she wishes to bet
from a list published on the website (step s6). The selection
triggers the display of a pricing screen for the event (step s7).
The different types of bet a customer can engage in are described
in detail below.
Fixed Odds Betting
[0033] The betting exchange system according to the invention
permits customers to lay events as well as to back them. When
backing an outcome, the customer bets that the outcome will occur
and makes a profit when that happens. If the outcome does not
occur, then the customer loses his original stake. Conversely, when
laying an outcome, the customer receives stake money and, if the
outcome does not occur, keeps this stake money, thus making a
profit. If the outcome does occur then the customer loses the stake
money multiplied by the odds at which he accepted the stake. The
operation of the system is illustrated by the example of a soccer
match between Arsenal and Leicester.
[0034] There are three possible outcomes: Arsenal win, Leicester
win or the game ends in a draw. The assumed odds on the three
possible outcomes are as follows:
TABLE-US-00001 Arsenal to win 5 to 4 Leicester to win 2 to 1 Draw 7
to 2
By way of example, it is assumed that the following people bet on
the match: Alex backs Arsenal with a .English Pound.100 bet, i.e.
he bets that Arsenal will win Belinda lays Arsenal for .English
Pound.100, i.e. she bets that Leicester will win or that the match
will be drawn Charlotte backs Leicester with a .English Pound.75
bet, i.e. she bets that Leicester will win David lays Leicester for
.English Pound.75, i.e. he bets that Arsenal will win or that the
match will be drawn
[0035] If Arsenal win, Alex wins .English Pound.125 (i.e. .English
Pound.100*5/4) and will also receive back his original .English
Pound.100 stake. In this case, Belinda pays out .English Pound.125
as well as returning the .English Pound.100 stake money she
received. Charlotte loses her .English Pound.75 stake. David keeps
the .English Pound.75 stake he originally received.
[0036] If Leicester win, Alex loses his .English Pound.100, and
Belinda keeps the .English Pound.100 stake money she received.
Charlotte wins .English Pound.150 (i.e. .English Pound.75*2/1) and
also gets her original .English Pound.75 stake back, while David
pays out .English Pound.150 and also returns the original .English
Pound.75 stake money he received.
[0037] If the match ends in a draw, Alex loses his .English
Pound.100 stake. Belinda keeps the .English Pound.100 stake money.
Similarly, Charlotte loses her .English Pound.75 stake and David
gets to keep the .English Pound.75 he originally accepted.
[0038] Table 1. below summarises all of the possible outcomes:
TABLE-US-00002 TABLE 1 Alex Belinda Charlotte David Out In +/- Out
In +/- Out In +/- Out In +/- Arsenal win (100) 225 125 (225) 100
(125) (75) 0 (75) 0 75 75 Leicester win (100) 0 (100) 0 100 100
(75) 225 150 225 75 (150) Draw (100) 0 (100) 0 100 100 (75) 0 (75)
0 75 75
FIG. 3 shows an example pricing screen 6 as it might appear after a
number of bets have been placed for an Arsenal vs. Leicester
match.
[0039] The pricing screen 6 gives price and size indications for
both sides of the market for all possible outcomes for that event
only. One side 7 of the market comprises the "backing" side, in
which the prices and sizes available to back an outcome are
displayed. The other side 8 comprises a "laying" side, in which the
prices and sizes available to lay an outcome are displayed. The
meaning of the price and size indications will become apparent from
the detailed description below.
[0040] The convention for digital betting is that odds are
displayed inclusive of the stake. For example, odds of 5/4 are
shown as 2.25.
[0041] The pricing screen 6 shows, for example, the best three
prices currently available on each side 7, 8 of the market and the
sizes corresponding to each price, namely the amount of money that
can be wagered at each of the prices. For example, a customer can
back Arsenal to win at a price of 2.2 (box 9). This is the total
amount he will receive back if he stakes .English Pound.1, so the
actual odds are 1.2 to 1, i.e. 6/5 in traditional parlance. This is
the best price available and is valid for a total size of .English
Pound.115. This means that the customer can bet .English Pound.115
on Arsenal to win at 2.2 and know that there are other customers
who are willing to accept that bet. As a result, the bet will be
filled immediately. The filling of a bet is also referred to herein
as accepting or matching a bet.
[0042] Similarly, the pricing screen 6 also shows that a customer
can lay Arsenal at a price of 2.3 (i.e. odds of 1.3 to 1) (box 10)
and that there are other customers who are willing to put a total
of .English Pound.400 on Arsenal to win at those odds. Thus, the
customer who wants to lay Arsenal at 2.3 can have that bet filled
immediately if the stake size is .English Pound.400 or less.
[0043] Other entries on the display screen 6 show that, for
example, the best price available for backing Leicester is 3.1 for
a stake size of .English Pound.113 (box 11), the next best price is
3 for a stake size of .English Pound.80 (box 12) and the best price
for laying a draw is 4.5 for a stake size of .English Pound.56 (box
13).
[0044] A customer enters a bet by entering his selection, stake and
odds in the appropriate input boxes 14, 15, 16 on the display 6.
For example, to lay Arsenal for .English Pound.200 at 2.3, the
customer enters "Arsenal" in the Selection box 14, "200" in the
Stake box 15 and "2.3" in the Odds box 16 and clicks on the "Lay
Selection" button 17.
[0045] As soon as the bets have been entered into the system, and
confirmed, all customers looking at the pricing screen for the
Arsenal vs. Leicester game will see their screens update
immediately to show the new price and size quotations, reflecting
the latest bets.
[0046] Customers are not allowed to place bets unless they have
sufficient funds in their account to cover any outcome on the bet.
When backing an event, the maximum amount a customer can lose is
equal to the stake, whereas when laying an event the amount that
could be lost is equal to the stake times the odds. If a customer
backs more than one outcome in a particular event the maximum loss
is simply the sum of all the stake money wagered. However, if a
customer lays several outcomes in the same event the maximum loss
is the highest individual loss less the other stake money (as the
customer can only pay out on one event). Similarly, if a customer
backs all outcomes in a particular event he is sure to have backed
the winner or, in appropriate circumstances, all of the
winners.
[0047] The betting exchange system keeps continuous track of every
customer's credit exposure. Since the betting exchange system does
not know whether or not pending bets placed by the customer will or
will not be filled, exposure calculations are performed by looking
at all possible outcomes and assuming the worst each time, bearing
in mind any interdependencies that may exist between bets. Exposure
calculations on odds bets are the easiest to perform of the various
types of bet disclosed herein, as the payouts are always known and
there can only be one winner. With other types of bet described
below, such as line bets and spread bets, the system has to run a
worst case scenario at each level at which the punter has struck a
bet.
[0048] All customers receive a confirmation of the bets they have
placed, for example over the Internet or by e-mail. They are able
to determine how frequently these confirmations are sent, for
example, after every bet, at the dose of an event, at the end of
each day and so on. In addition, customers are notified of all
pending bets that have lapsed. The concept of a pending bet is
explained in detail below.
[0049] Referring to FIG. 4, a full explanation of an example of the
operation of the system is now described in relation to a customer
who wishes to put .English Pound.200 on Arsenal to win at a price
of 2.2, starting from the pricing screen display shown in FIG. 3,
and following on from the screen display step referred to in FIG. 2
as step s7.
[0050] First, referring again to FIG. 3, the customer enters a bet
request by entering "Arsenal" in the Selection box 14, "200" in the
Stake box 15 and "2.2" in the Odds box 16 and clicking on the "Back
Selection" button 18 (step s8). The system checks if the bet is
valid, for example, to ensure that the number ranges correspond to
those recognised by the system (step s9), and if not informs the
customer that the bet is invalid (step s10).
[0051] If the bet request is valid, the system displays a
confirmation of the bet request, including a payout profile
illustrating the possible profits and losses (step s11). The system
then checks if the customer wishes to proceed (step s12) and if he
does not, displays a message informing him that the bet request has
been cancelled (step s13).
[0052] If the customer wishes to proceed, the system checks whether
he has sufficient credit to place a bet (step s14), by reconciling
the customer's account balance with the bet request and all
outstanding unfilled, filled and settled bets. As mentioned above,
the system performs exposure calculations to determine if, in a
worst case scenario, the customer's account might go into negative
territory if the bet request is accepted, in which case the bet
request is refused (step s15).
[0053] If the bet request is accepted, the system assigns a unique
reference number to it (step s16). Customers are informed of these
numbers. In addition, the system assigns a unique reference to
every portion of the bet request that is filled and keeps a record
of the corresponding reference for the portion of the bet with
which it is being matched. These references exist to provide an
audit trail.
[0054] The system then fills as much of the bet as possible (step
s17). In this example, referring again to FIG. 3, the pricing
screen 6 currently shows (box 9) that only .English Pound.115 is
available at the customer's chosen price of 2.2. Therefore,
.English Pound.115 is filled immediately. This amount is referred
to herein as the filled amount. The remaining part of the bet,
referred to herein as the order amount, is left on the system as a
pending bet (step s18). In this example, the remaining order amount
is .English Pound.85. The system confirms the filled amount to the
customer and asks if he or she wishes to cancel the order amount
(step s19). If the customer wishes the order amount to stay on the
system, the system confirms this (step s20) and the pricing screen
display is updated, to display the screen shown at FIG. 5. This
shows that the price of 2.2 to back Arsenal is no longer available,
since this has been filled, the best price now being 2.1 for a size
of .English Pound.85 (box 19).
[0055] A new best price to lay Arsenal also appears on the updated
pricing screen (box 20). This represents the pending bet left on
the system. The pending bet shows up on the pricing screen 6 on the
"lay" side 8 of the market which indicates that the bet is
available to be filled from the "lay" side 8, since a pending bet
on the "back" side 7 of the market immediately becomes available to
be filled from the "lay" side of the market, and vice versa. Put
another way, the first customer described above wishes to back
Arsenal for .English Pound.85 at a price of 2.2, so his bet will
only be accepted when a second customer wishes to lay Arsenal for
that amount at that price.
[0056] Referring again to FIG. 4, if the customer wishes to cancel
the order amount in response to the system request at step s19, the
system checks to see whether this amount has already been wholly or
partially filled (step s21). If the amount has already been wholly
or partially filled, the system cancels as much of the order amount
as possible and confirms this to the customer (step s22). If the
order amount has not been filled, cancellation is confirmed (s23)
and the resulting screen display is shown in FIG. 6. The price of
2.2 to back Arsenal is again no longer available, but the best
price to lay Arsenal remains at 2.3 (box 21).
[0057] In general terms, the amounts displayed on the pricing
screen 6 as available at different prices, on both the "back" 7 and
"lay" 8 side of the market, are an aggregation of all of the
various pending bets which have been placed on the system. As long
as a pending bet remains outstanding, the system will fill it as
soon as it becomes possible to do so. For example, the bet placed
above of .English Pound.85 at 2.2 will be filled when another
customer decides that they want to lay Arsenal to win at odds of
2.2. If only part of the order can be filled (e.g. someone is only
prepared to lay Arsenal for an amount of .English Pound.20) then
the system will do this and leave the rest (.English Pound.65 in
this case) as a pending bet. Customers can always cancel their
pending bets, as well as any unfilled portion of a bet. However,
once the system has matched up and "filled" any outstanding bets,
subject to suitable confirmation, these bets cannot be
cancelled.
[0058] Although the system aggregates all equivalent pending bets
at the same price, it executes them in the order in which they
arrived at the exchange. For example, Alex submits a bet to lay
Arsenal for .English Pound.50 at a price of 2. Belinda comes along
a little later and submits the same bet. Charlotte now submits a
bet to back Arsenal at a price of 2 with an .English Pound.80 bet.
The system fills this bet by taking all of Alex's .English Pound.50
and .English Pound.30 of Belinda's .English Pound.50, leaving
.English Pound.20 of Belinda's money still unfilled. Belinda's
money effectively sits behind Alex's.
[0059] To ensure that customers have to make meaningful
improvements in their offered odds if they want to queue Pimp ahead
of other punters, the betting exchange system maintains a pricing
structure for all bet types. For example, 2.1, 2.2 and 2.3 are all
acceptable prices for bets but 2.25 and 2.26 are not. Similarly 31
and 32 are acceptable but 31.5 is not, whereas 1.8, 1.85 and 1.9
are all acceptable. An exponential scale governs the increment
size.
[0060] For example, referring to FIG. 6, if a customer wishes to
have a bet on Leicester at odds of 3.3, he sees on the pricing
screen 6 that .English Pound.273 is already available to lay at the
price of 3.3 (box 22). If he places a bet request at that price,
his amount will have to sit behind this amount. If there were no
price structure in place, the customer could put in a bet request
at 3.299, which would be virtually the same bet, but would get him
to the front of the queue.
Best Fill Feature
[0061] A further feature of the invention is that the system will
automatically fill a customer's bet to his best advantage. If, in
the above example, the customer had simply entered that he wanted
to have .English Pound.200 on Arsenal to win at a price of 2.1 and
the .English Pound.115 was still available at a price of 2.2, then
the system would automatically allocate the first .English
Pound.115 of the customer's .English Pound.200 to the 2.2 price and
the remaining .English Pound.85 at the 2.1 price. This ensures that
the customer always gets the best value available on the system.
The same is true if the customer is laying an outcome rather than
backing it.
[0062] Referring to FIG. 6, in addition to showing live price and
size indications for each outcome, the pricing screen 6 also shows
the highest and lowest prices that have been successfully filled
(boxes 23, 24), the price at which the most recent bet was
transacted (box 25), and the total volume of bets that have been
filled (box 26). This information allows the customer to make a
fully informed decision when considering placing a bet. All of the
information on the screen is updated automatically by the system
and reflects the views and actions of all participants in the
market.
Arbitrage
[0063] There will be occasions with fixed odds betting when, even
though one side of the market has not been taken up, it will still
be possible to fill bets on the other side of the market, an
operation which is referred to herein as arbitrage. The betting
exchange system performs an arbitrage function by automatically
filling bets in such a way that the system operator does not lose
money. Arbitrage opportunities arise where a collection of bets of
a similar type (i.e. to back or to lay), all on the same event, can
be automatically filled by the exchange in the sure knowledge that
whatever the outcome of the event, the system operator will not
lose money.
[0064] For example, Alex is prepared to put .English Pound.120 on
Arsenal to win at a price of 2.0 and Charlotte is prepared to back
Leicester to win at a price of 3.0, also for .English Pound.120,
and both have entered their requests into the system, in accordance
with the procedure described above. The system will now
automatically create an implied bet, namely a price at which it is
willing to lay the draw. In this example it lays the draw for
.English Pound.40 at a price of 6.0. Referring to FIG. 7, as there
is now someone prepared to lay the draw, the pricing screen 6 shows
that customers can back the draw immediately, for a total of
.English Pound.40 at a price of 6.0 (box 27). Assuming Edward now
decides to accept the odds being offered for the draw and backs the
draw at 6.0 for the whole .English Pound.40, his bet will
immediately be taken up. At the same time, all of Alex's .English
Pound.120 bet will be taken up, as will .English Pound.80 of
Charlotte's bet. The resulting pricing screen is shown in FIG. 8,
in which all of the bets have been executed, leaving .English
Pound.40 of Charlotte's bet unfilled (box 28). The matching of bets
for each outcome is illustrated in Table 2. below.
TABLE-US-00003 TABLE 2 Alex Charlotte Edward Out In +/- Out In +/-
Out In +/- Arsenal win (120) 240 120 (80) 0 (80) (40) 0 (40)
Leicester win (120) 0 (120) (80) 240 160 (40) 0 (40) Draw (120) 0
(120) (80) 0 (80) (40) 240 200
Therefore, in this instance, even though no individual explicitly
stated that they wanted to lay any of the outcomes, the betting
exchange system is able to transact three separate bets.
[0065] An example of the way in which the system assesses the
arbitrage position is to look at the book total, which is the sum
of the reciprocal of the prices in a column expressed as a
percentage, as shown for example in FIG. 7 (boxes 29 and 30). In
this example, 83.3=(1/2+ 1/3) expressed as a percentage, and
16.7%=1/6 expressed as a percentage.
[0066] On the "available to lay" side 8, there will be arbitrage if
the book total is equal to or above 100%. On the "available to
back" side 7 there will be arbitrage if the book total is equal to
or below 100% and there are bets available for all possible
selections. Referring to FIG. 8, when Edward takes the bet on the
draw, the book total for the "available to lay" side is 100%
(1/2+1/3+1/6), which enables the system to execute arbitrage,
resulting in the three executed bets.
[0067] In this example, in response to Alex's and Charlotte's bets,
the system calculates the odds of x to lay the draw so as to fulfil
the condition that: (1/2+1/3+1/x)*100=100%, i.e. the probabilities
of all the outcomes add up to 1 (certainty). Therefore, x=6.
[0068] The system calculates the sizes which will be filled by the
arbitrage, by taking the minimum payout (price*size) over all
selections, and then calculating the size for each selection which
results in that payout. In this example, the minimum payout is
.English Pound.240 in respect of Alex's bet (.English Pound.120*2),
so to achieve this for Charlotte at a price of 3, .English Pound.80
of her bet is filled. Similarly, the system calculates the size of
the implied bet as .English Pound.40, since 6*40=240.
[0069] The arbitrage price is generally unlikely to be a round
number, and is marked up or down to the nearest acceptable number
in the price structure of the system that will not cause the system
to lose money.
[0070] The generation of implied bets by the betting exchange
system and the marking up/down effect is further illustrated by
reference to FIGS. 9 and 10, which show betting on an event which
has only two possible outcomes, in this case a tennis match. FIGS.
9 and 10 each show the position after only a single bet of .English
Pound.100 at a price of 1.9 has been placed on Sampras. FIG. 9
shows the pricing screen 6 after a bet to lay Sampras, while FIG.
10 shows the pricing screen after a bet to back Sampras.
[0071] Referring to FIG. 9, a bet 31 by a customer to lay Sampras
causes the betting exchange system to generate an implied bet 32 on
Henman, since there are only two possible outcomes, namely
`Sampras` and `NOT Sampras`. In accordance with the principles of
the invention, the implied bet appears on the Lay Selection side 8.
The implied bet price and size is the reciprocal of the actual bet
price and size (i.e. 1/1.9+1/x=1), adjusted to conform to the
pricing structure imposed by the betting exchange system.
Therefore, in this example, a punter accepting the bet to back
Sampras for .English Pound.100 would have a possible return of
.English Pound.190, whereas the equivalent implied bet on Henman,
generates a theoretical return (price times size) of .English
Pound.189.20.
[0072] FIG. 10 illustrates that a bet to back Sampras generates a
different price and size for the implied bet to lay Herman, again
caused by the imposed pricing structure working to ensure that the
system operator does not lose money.
Line Betting
[0073] In another example of the invention, the betting exchange
system is used for another form of betting, known as line betting.
This type of betting is particularly popular in the US and is
similar in concept to spread betting.
[0074] Line betting can be thought of as handicapping, with the
value of the line being set such that the only two possible
outcomes are both equally likely. As a result, the odds on both
outcomes are the same, i.e. evens.
[0075] The principles of line betting are illustrated by reference
to the following example. England are to play New Zealand at rugby
and the general view is that New Zealand will beat England by 12
points. Effectively, therefore, people believe that if New Zealand
were to be handicapped by 12 points, either side would be as likely
to win. A "draw" would still be possible if New Zealand beat
England by 12 points. However, if New Zealand are handicapped by
12.5 points, a draw is not possible. Thus, the line in this example
is the "New Zealand Supremacy line" and is set at +12.5. FIG. 11
shows a pricing screen 33 for this example. A customer buys the
line at +12.5 (box 34) if he thinks that New Zealand will win by
more than 12 points and sells the line at 11.5 (box 35) if he
thinks that New Zealand will win by less than 12 points, which
includes the outcome that England win.
[0076] As stated above, the odds on the line on the betting
exchange system are even money, since the system does not need to
incorporate a bookmaker's overround into the pricing.
[0077] As with fixed odds betting, the pricing screen 33 shows
price and size indications for the line and is divided into a buy
section 36, indicating the lines available to buy, and a sell
section 37, indicating the lines available to sell. Customers can
either take the prices indicated or leave orders on the system, as
in the case of the first embodiment. For example, a customer buys
the line at +12.5 for .English Pound.120 by filling in the
Selection box 38, which may be filled automatically by the system
when there is only one selection, as in this example, putting
.English Pound.120 in the Stake box 39 and selecting +12.5 from the
Line menu 40, as shown in FIG. 12, and then clicking on the Buy
button 41. The betting exchange system accepts the bet in respect
of the available .English Pound.95 (box 34) shown in FIG. 11 and
places the remaining .English Pound.25 in the Sell section 37 as a
line available to sell under +12.5 (box 42) shown in FIG. 12. As in
the case of the first embodiment, the system automatically fills
all bets as soon as possible.
[0078] The returns on line betting equate to digital odds of 2.0.
So, if a customer buys the line and wins, for example, New Zealand
win by more than 12.5 points, he gets back his stake and the same
amount again, less a commission charge, for example 4%. If he
loses, he forfeits his stake but does not pay any commission.
[0079] As in the first embodiment describing fixed odds betting,
the best fill feature which ensures that the system will
automatically fill a customer's bet to his best advantage also
applies to the case of a customer placing a line bet, the
difference being that a customer receives a more favourable line
instead of a more favourable price.
Spread Betting
[0080] In a further example of the invention, the betting exchange
system provides a spread betting facility as illustrated with
reference to FIGS. 13 to 15. Spread betting is similar to line
betting in the sense that a customer buys or sells at a certain
level.
[0081] In this example, illustrated by Formula I driver
performances in the Korean Grand Prix, there are 85 points to play
for, made up of 50 points for first place, 25 points for second and
10 points for third.
[0082] Referring to FIG. 13, the pricing screen 43 shows bets
"available to sell" for the first three drivers (boxes 44, 45, 46),
with an additional bet "available to buy" for Hakkinen (box 47).
FIG. 14 illustrates the pricing screen 43 when a customer attempts
to buy Coulthard at 14 (box 48), the system posting the bet as
"available to sell" on the screen. As a result of this, an implied
available bet is generated on "None of the above" (box 49). The
price of the implied bet is 15, which, if taken up, would bring the
total of the left hand column 50 to the required 85 points (100%).
The size is .English Pound.9, which is the minimum of all the sizes
on the left hand side.
[0083] FIG. 15 shows the pricing screen 43 after the bet on "None
of the above" has been taken in full. The "None of the above" bet
disappears and .English Pound.9 is taken off of all the other bets
in the left hand column 50.
[0084] The payout profile of a spread bet is not binary. When
buying or selling levels, the punter does so on a per points basis.
For example, if he buys the line at 21 for .English Pound.10 a
point, and the selection scores 50, he will make .English Pound.290
(less commission). If the selection scores 0 he will lose .English
Pound.210. There may be various related selections in a spread
event, in which case there will be possible arbitrage. This assumes
that there is a fixed amount of points available for distribution
on settlement of the event. Spread betting arbitrage has already
been described above in relation to FIGS. 13 to 15.
[0085] Once an event has finished the betting exchange system will
settle all bets. If a customer has won on a bet, the winnings are
transferred to the customer's account on the system, less the, for
example, 4% commission that the system operator charges. If a
customer has lost, then the losing amount is deducted from the
customer's account on the system. At the end of each day all
accounts will be reconciled to ensure that it is only possible for
any errors to exist in the system for a maximum of one day.
[0086] While the above invention has been described primarily in
relation to betting over the Internet, any form of communications
network which provides similar functionality is suitable to
implement the invention.
* * * * *