P2P Betting Takes Ireland by Storm

Any doubters to the recent increase in popularity among person-to-person betting sites needn't look any further than Ireland for proof of the P2P boom.

The island nation recently became the home base for a third P2P site with the launch of Tradesports.com, a new P2P site aimed at bringing an element of the financial markets to the P2P sector. The site joins the list of popular existing P2P sites in the Emerald Isle, including Betdaq.com and Intrade.com.

"If a new method of sports wagering arrives that has demonstrable benefits over the traditional bookmaker, then savvy punters, wherever located, will embrace the service."

- John Delaney
TradeSports Exchange Ltd.

None of the sites are limiting their focus to the Irish punter, although all three have already had success in captivating that market.

The allure of P2P sites is the elimination of the middleman, or bookie, and the usual 10 percent juice that comes with making a bet.

Tradesports.com, though, is more than just matching up "layers" and "backers" with each other. The site is geared to work like a financial index; it allows for bets to continue through the course of a contest. Just like the price of a stock rises or falls depending on news and events with the company, the offerings of a game or spread can change throughout the course of a game.

John Delaney, the director of TradeSports Exchange Ltd. said the only "juice" a punter pays using the service is a 4-cent transaction free per lot or bet that is traded. He also said prices on the exchange are much tighter than those available elsewhere, as they're set by the customers.

TradeSports, under development for three years, launched two weeks ago. then, Delaney said, the site has proven mass appeal to both bettors and financial investors, with 2,500 registered users already accessing the system. They hope to increase that number to 8,000 within the first year of operation.

For now though they're focusing on taking small strides. A major goal for the company in the first six months is to ensure that all contracts, or bets, are sufficiently liquid. To do that officials with the site try to ensure they have at least $10,000 of action available on the "back" and "lay" sides. Usually, he said, this action will come in at prices that are equal to or (often significantly) better than those available from a bookie.

The company will initially use word of mouth and customer referrals as its major marketing ploy, Delaney said, but they'll also use a cross of gambling portal sites, like Covers.com and VegasInsider.com, and financial/trade relevant sites, like TheStreet.com, as Internet partners.

Much of the marketing campaign will focus on major sporting events for the 2002 calendar year, including the World Cup in June and the Ryder Cup in September.

The arrival of TradeSports, in addition to the already-existing BetDaq and Intrade, beg the question: Why Ireland?

Rob Hartnet communications director for Betdaq feels there are many reasons why the P2P betting concept has taken off there.

"It seems logical and inevitable that sports risk betting would remove the middleman who won when the punter lost."

- Delaney

"In Ireland there is a great infinity with betting on sport," he said. "There is a great desire among the public to have a punt."

So, he said, it is no surprise that any sort of burgeoning new trend, like P2P betting, is making solid progress in Ireland.

"We have a highly educated, English-speaking and highly technically aware work force," he said. "The Celtic Tiger has been raging for the last eight to 10 years and has produced technology-oriented people."

Once you combine the technology awareness of the Irish consumer, along with the desire to place bets, the environment has created a market savvy punter.

"Those are probably the two big reasons why Ireland is at the center of it," Hartnet explained. "Or at least what appears to be the center of it, but that may be overstating things slightly. It certainly is an important area for this new sector."

Delaney feels it is more based on the structural setup in Ireland.

"Ireland has a stringent regulatory and corporate governance regime," he said. "This ensures that only reputable people with appropriate backgrounds may establish a business."

That has flexed over to the online gaming industry to ensure that no Irish gaming business has defaulted on member funds, according to Delaney.

"The performance of the Irish industry obviously compares favorable to places like the Caribbean," he said. "Additionally Irish tax on corporate profits is approaching 12.5 percent. Coupled with a fantastic resource base and infrastructure for technology companies, Ireland is assured to continue to offer a credible, secure and accommodating venue for on-line sports wagering businesses, particularly P2P exchanges."

Beyond Ireland, Delaney said, TradeSports has already been able to penetrate numerous English speaking countries.

"The Internet allows the targeting of communities interested in particular sports, where the community is comprised of many nationalities," he said.

The key area, in terms of the international market for BetDaq, is the Far East, according to Hartnet. He said countries like Hong Kong and Japan, where gambling is a way of life, lend themselves to being prime markets for P2P betting. He estimates that P2P betting in the region could be worth $150 billion.

Still, Delaney pointed out that P2P betting in Ireland has reached levels unparalleled elsewhere. He said the recent change in the bookmaking tax in Ireland enables bookmakers to remain competitive with those in the United Kingdom. A much under-emphasized relative advantage retained by Ireland, he added, is a corporate tax rate approaching 12.5 percent, significantly better than England and other European jurisdictions.

Delaney also feels that the Irish have a keen sense of entrepreneurship and a glamour side of betting that helped fuel the P2P boom.

"Legendary Irish punters like JP McManus and Barney Curley are reputed to have caused more gray hair on bookies heads than Father Time himself," said Delaney. "If a new method of sports wagering arrives that has demonstrable benefits over the traditional bookmaker, then savvy punters, wherever located, will embrace the service."

The power of the Irish betting brand was in full force last week in England at the annual Cheltenham Festival. Hartnet said the event is so popular with Irish bettors that the town becomes the 33rd county of Ireland for three days. He said the races are the "talk of every bar and street corner in Ireland."

With the festival as a backdrop, Betdaq launched a new U.K.-based interactive horse racing service two weeks ago. Hartnet said the new site was incredibly well received during the event and was able to generate £4 million in turnover. As P2P continues to grow, it also continues to evolve. Delaney pointed out that older P2P sites were designed so punters could actually swap fixed-odds bets.

He said online gambling isn't the only industry where there's a decreasing number of middle men. Stocks, bonds, currencies, insurance, and retail sectors are all areas he points to with a shrinking middleman.

"It seems logical and inevitable that sports risk betting would remove the middleman who won when the punter lost,'" he said. "However unlike bookies, there will only be a limited number of successful P2P businesses as liquidity is a key enabler."

If the early results from the 2002 betting year, and the boom of P2P sites in the country are any indication, it's a pretty good bet that some of the "limited number" of successful sites will be based in Ireland.