Matchbet is a revolutionary provider of liquidity to the bookmaking industry. A business to business (b2b) exchange which removes the risk from bookmaking and provides clients with guaranteed profits. This revolutionary web-based service provides bookmakers with automatic liquidity in a wide range of UK and world-wide sports markets through a bespoke internationally patented system. Horse racing is expected to be available early in 2010.
The Matchbet Exchange (Matchbet) is a central counterparty (CCP) based exchange and transactions in Matchbet are always contracts between Matchbet and its bookmaking clients. These transactions are, however, coupled with transactions between the bookmaker and their clients in such a way that the net effect of such a pair of transactions (bookmaker-Matchbet and bookmaker-client) is that the client holds a position, the bookmaker earns a riskless spread and Matchbet holds a betting position but one which, together with simultaneously struck bets, is always riskless. The only exception to this is the 'Virtual Bookmaker' implementation which allows some controlled risk to be taken. This will run at the individual bookmaker level and is a separate service offering. The Matchbet exchange will never take market risk.
The structure of the Matchbet algorithm and its mechanism of removing arbitrage opportunities out of the system often results in excess 'spread income' to Matchbet through the normal operations of the exchange. This revenue is not linked back to any particular bet or client, but is a consequence of indirect matching, and this is a secondary source of revenue for the exchange.
The enhanced liquidity is generated through ground-breaking order management software which multiplies existing market liquidity via its unique algorithm. Additional liquidity is created from existing markets, enormously increasing both the scope to match existing outcomes while at the same time generating many additional betting propositions for customers, for example supremacy bets - real time and in-play bespoke bets can be instantly priced and executed entirely without risk.
The liquidity is managed through our charter clients, all of whom have indicated liquidity commitments. Through Matchbet they have the capacity to offer bets on any combination of outcomes with their own adjustable spread level built in; again without any risk.
Matchbet's strategy involves the construction of commercial relationships with companies that provide complementary assets to our own. In particular, the company is building a network with sports promoters and media rights holders, with a view to associating betting with their events, sharing revenue in return for marketing. This sort of relationship was piloted with the sport of real tennis, with larger deals being under negotiation.
Matchbet offers its partners the opportunity to simply and risklessly advance bookmaking by tailoring the unique system to their precise requirements and at the same time enjoying new and increased revenue opportunities.
