Asia’s centrifugal influence on football prices
One of the great unknowns about the global betting industry is the true scale of the betting markets in Asia, but Scott Longley says that one indicator of their huge gravitational influence comes from the degree to which the Asian books impact football prices back in Europe.
The very public display of Asian-facing brands on the shirt fronts (and increasingly the sleeves) of European football teams and the pitchside hoardings at the grounds are one very clear indicator of the spending power of some, largely Philippine-based, bookmakers.
In total, six Asian-facing brands featured on the shirts of English Premier League brands this past season, continuing a trend that has been in evidence for a number of years. The effect of the Asian betting markets is clear, introducing a heightened level of competition into the European market and raising the cost of marketing.
Away from the marketing limelight, though, a less visible but arguably more operationally significant effect of the size of the Asian market occurs in the area of price setting for football.
“The first question for any European trading room is ‘what’s the line in Asia?’” says Paul Fox, chief executive at one of the Premier League’s Asian-facing sponsors, Letou. “Every European bookmaker will look at the Asian line and they will all make sure they are never far out of line.”
Asia sets the line for every book in Europe, and in football is perhaps the last redoubt of the trading room. “They are still very manual driven, very human,” says Fox.
“They have got somewhat more automated in recent years, but they still employ hundreds of people. I believe MaxBet (previously IBC) employs 700 traders, for instance. In Asia, the main lines will be moved by individuals.”
The global influence of the prices set by the Asian books isn’t about the numbers of traders but the weight of money. “The Asian books will see some big, big positions taken,” says Jeevan Jeyaratnam, head of trading and compilation at Abelson Info, which among other products, provides goalscorer feeds.
“The money flows to Asia and all prices snap to the prices on the Asian books. The European books all feed off those prices.”
“From the European fixed-odds firms’ perspective they have become a willing slave to Asia,” says Nick Goff, previously a head of football trading at Coral and now a professional gambler.
“There is an acceptance among the European firms that because the market is so vast, because that is where the sharpest players are playing and the most money is being traded, they don’t even try and challenge it.
“They just accept those prices are correct, and as long as they stay in line with those prices, they will then not need to worry about the old-fashioned odds compiling side.”
Slave to the ‘rithm
The setting of prices in Asia is described a manual process, with traders setting prices for all of football’s big leagues, but when it comes to how the European market functions, then automation takes over.
“We are selling petrol not crude oil,” says Einar Knobel, chief executive and founder of odds-feed provider TXODDS. “The Asian prices are the crude in this instance; it doesn’t matter how the prices are generated, whether that is in Asia or anywhere else. We feed off of that crude oil – the price – and we refine the data.”
Everything from this stage of the process can be tracked, including every other bookmaker’s position. The global odds comparison process kicks in and the odds world’s version of a circle of trust is formed.
“The clients are also interacting and producing data and we are also feeding off that interaction,” says Knobel.
While there is still a role for football trading rooms in Europe, it is limited and very different to how they operated in the past. “One way of looking at our product is that you potentially get rid of the necessity of someone having to have a trading desk,” says Knobel.
“The remaining work is about enabling or making the process more automated and then giving more power to fewer people to run things. They can then refine their trading opinions.”
Refinement is necessary because of the limited nature of the ‘crude’ feed from Asia. For the Asian books, the only markets that matter – and to a huge extent the only markets that are offered – are the supremacy and expected goals markets.
“Those are the big two and from that everything else flows,” says Jeyaratnam. Because these prices are effectively market tested by the huge Asian liquidity, they are the trusted inputs and they drive every other price in the long tail or markets available on any game in Europe.
“You are only as good as your inputs, but the inputs are good,” says Jeyaratnam, who notes that Abelson Info overlays its proprietary algorithms over the basic data from Asia.
Given its size and long standing, this ecosystem is now a settled part of the landscape. “This has been the case for some time,” says Knobel. “The system has been stress-tested and we know it works; we can see it works via our own systems which are working in real time and give a view of the global market. It is very dynamic.”
Such a developed system also poses questions about the long-term prospects, in Europe at least, of football trading desks. “I don’t want to be harsh, but odds compiling doesn’t really exist anymore as I knew it,” says Goff.
There will be some football traders, he suggests, doing elements of a bookmaker’s offer such as ante-post markets, for instance. “There will still be some in the UK market paid to do that. But being a full-time odds compiler is a dying, if not a dead, art.
“It is on the periphery as part of the job now rather than being the main part of the job. That is because they willingly let Asia dominate. They know they can’t beat the Asian market.”
“Video may have killed the radio star, but it is Asian bookies that have killed the European football desk,” says Knobel.
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