Punters cut out the bookie in cyberspace

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The Independent Online

Internet backers are now going head-to-head in the quest for better value.

Internet backers are now going head-to-head in the quest for better value.

Internet punters now have the chance to eliminate the bookmaker and reap the benefits of betting between themselves. It could be the end of the bookmaking industry as we know it.

There have been a proliferation of internet bookmakers springing up in recent years, luring punters with promises of low or no-tax betting, free bets and other spurious offers.

Flutter.com, however, offers something completely different. At this web site, punters can bet between themselves, offering and taking prices from each other, while Flutter.com takes 2.5 per cent commission on the return from each transaction from the winner.

Flutter.com is the brainchild of Vince Monical and Josh Hannah, its founders and co-Presidents, two Americans who began betting with each other socially and became so hooked on person-to-person betting they decided it had e-commerce potential.

Hannah, 29, and Monical, 30, are an intellectually formidable pairing with plenty of good old fashioned American "drive" to boot.

Hannah and Monical ransacked their connections to raise $39m (£25m) from financial institutions before boldly upping sticks to move to the United Kingdom, where they obtained a full UK bookmaker's licence and registered their company.

Founded in February, 1999 and launched on Grand National day this year, Flutter.com has failed thus far to make a significant impact upon the UK's gambling consciousness, but the potential it offers for punters is considerable.

Betting-shop punters must contend not only with nine per cent tax, but the bookmakers' overround, which is about two per cent per runner and therefore averages around 20 per cent.

Flutter.com punters, however, providing they play the game and offer each other odds with no built-in profit margin other than that required to offset Flutter.com's commission, can create a more competitive environment.

Supply and demand is god and, at present, Flutter suffers from an insufficient volume of customers to create a competitive market. Moreover, the inalienable mathematical truth of levying a commission on total stakes is that anyone wanting to act as a bookmaker is forced to operate with an overround of said commission (in this case 2.5 per cent) per runner minus one - the winning punter pays the commission on the winner - in order to break even.

However, Flutter.com acknowledges the arithmetic flaws in their set-up and will restrict their commission to just winnings at odds of 3-1 or above from mid-November. When they do, opportunities for would-be layers and punters at their web site will be much improved.

At present, the site attracts a depressing number of two-bit time wasters. There is nothing wrong with only being prepared to lay a bet to lose a few pounds - everyone must cut their cloth according to their pocket - but the character who was offering 4-7 ante-post about the 10-1 chance Tryphaena for the Cesarewitch makes a better case for the return of the death penalty than any Tory MP can ever hope to do.

Flutter-com clearly have some work to do, in terms of educating their clients to use the site to offer greater value for all, rather than try and take each other for a ride, before the idea moves towards realising its full potential.

The site has a very "tabloid" feel at present, which might discourage the serious punter. And some of the notions the people at Flutter.com have about their site seem a trifle fanciful: the assertion of Aideen Shortt, their Brand manager, for instance, that person-to-person betting at their site is creating a community spirit. A punter to whom £100 has just been lost can be called many things, but "friend" is not the epithet that most readily springs to mind.

But see past the "what colour hair will tomorrow's Page 3 girl have?" offers and imagine a world with no bookies and more punters making the game pay than ever before. Heaven on earth.


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