Early Betting Rebate Trial Review

At Betfair, we are committed to constantly improving the Exchange to make it a vibrant, optimised experience, and to ensure that our product offerings are sustainable for all customers.

We listened to what our customers have been asking for, and so for the set period of May 2021, the Early Betting Rebate Trial (the Trial) was run. Customers were rewarded with a rebate of up to 80% on commission paid (as per figure 1.0 below) for winning bets placed further from the start of all ANZ racing markets (thoroughbreds, greyhounds and harness). The Trial concluded on 31 May 2021.

The Offer

Qualifying Time Frames and Commission Rebates

Qualifying Time Frames Rebate On Comission Paid
1-15 min 0%
15min – 1 hour 50%
1-2 hours 60%
2-3 hours 70%
3 hours+ 80%

How much did Betfair rebate?

After strong demand, we are pleased to announce that a record number of customers took part in the Trial: 6,300 customers were rebated a total of $132,000 during the Trial.

This means that on average, customers each received $21 back (or for those who were active on more than one day during the Trial, received $41).

How does volume form on Australian thoroughbred markets?

Analysing how markets form showed that improving liquidity as early as possible has the biggest impact on turnover. On Betfair’s Australian thoroughbred racing markets, from March 2020 to March 2021, only 5.6% of volume was matched greater than 15 minutes from the jump of a race, with less than 2% matched greater than 3 hours before the jump.

This small percentage meant that there was a huge opportunity for Betfair to initiate a trial to incentivise customers (via a commission rebate) to offer more volume further from the jump. This in turn would enable customers to bet earlier and bigger into markets, thus increasing the amounts customers could get matched.

The Early Betting Rebate Trial saw customers have more volume matched earlier: there was a 41% increased share of matched volume 3+ hours from the jump on ANZ thoroughbred races.

While a more thorough analysis is being undertaken, we are pleased that customers were able to get on earlier.

Introducing Exchange Health

Liquidity is a vital part of our Exchange product and our ability to offer customers a great betting experience. Exchange Health is a metric created by our Data Science Team that captures the quality and quantity of liquidity on our racing markets.

Exchange Health relies on three loose concepts: depth of money (quantity), tightness of prices (quality) and lifecycle of a market (time). Based on these factors, each racing market is given a score between 0 and 10 – where a 10 resembles a Melbourne Cup market a couple of minutes from the jump, a newly opened market is a 0, and a random mid-winter Tuesday race in Scone is likely a 6. Exchange Health is a vital metric for the business because it has a statistically significant positive relationship to downstream metrics like turnover and winnings for customers. Simply put, the higher the Exchange Health of a market, the better prices customers can get, and the more they can win.

For the Early Betting Rebate Trial, Exchange Health targets were set based on historical trends and seasonality. The expectation through the mechanism of the Trial was to see an increase in early liquidity and an uptick in Exchange Health across markets, especially in the time periods with high rebate percentages.

As seen in Figure 2.0 below, when comparing actuals (solid lines) to targets (dotted lines), we saw customers respond to the Trial which led to an increase in early liquidity across thoroughbreds and greyhounds, but no material increase in harness.

Exchange Health by time (minutes) before the jump: actuals (solid line) vs forecast (dotted line)

The future of Betfair markets

We are hugely encouraged by the uptake on the Early Betting Rebate Trial, however we acknowledge that there is more we can do to improve the quality of Australian racing markets in order to reach our goal of getting all racing markets to an Exchange Health score of 10.

We would love to hear any ideas and feedback from customers on betting early, liquidity on the Exchange, future trials, or any barriers, whether on an individual or general basis.

Please reach out to our Pricing Team on pricingenquiries@betfair.com.au.