This week’s podcast guest is Andrew Fahey, Chief Operating Officer at PointsBet.
Launching just three months ago, PointsBet is Australia’s newest bookmaker and are bringing something very different to the market: spread betting. Andrew takes us through the concept and what the new player has to offer.
- How spread betting works and how it differs from regular fixed-odds betting
- Why spread betting is a great product for educated punters who back their opinion
- How to limit your exposure as you learn the concept
Andrew Fahey, Chief Operating Officer, PointsBet
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Mark Haywood: Hello, everybody, once again, to the Betting 360 Podcast. My name’s Mark Haywood. I’m from championbets.com.au and this week’s guest is Andrew Fahey. Andrew’s the COO, Chief Operating Officer, at pointsbet.com. PointsBet are, I think, probably the first betting firm to bring the concept of spread betting to Australia in quite a big way. They’ve launched not too long ago, and I know a lot of people aren’t overly familiar with spread betting, so it’s good to get Andrew on to explain that, first of all, the concept of spread betting and what you can expect if you go onto PointsBet to have a go. So let’s have a chat.
Mark Haywood: My guest this afternoon is Andrew Fahey from PointsBet. Thanks for joining us, Andrew.
Andrew Fahey: Thank you, Mark. Thanks for having me.
Mark Haywood: Not a problem. I just wanted to get you on. Probably been a little while since we’ve had a new entrant to the bookmaking market in Australia. You guys have come along with PointsBet, so did you just want to start by giving us a bit of background on PointsBet, what it is and where it’s come from?
Andrew Fahey: Yeah, no worries. We’ve brought something completely different to the Australian online betting market. It is, as they say, completely different to your traditional fixed-odds betting or any other gambling style or format that is in the industry at the moment. It is a form of sport betting and we offer up 7,000 unique markets each day and it’s spread betting. Essentially, you know the way spread betting works is the more that your selection is right by, the more that you’ll win. The more that your selection is wrong by, the more that you lose. Wins and losses aren’t fixed like fixed-odds betting. They’re variable right until the end of a sporting event.
Mark Haywood: And I guess just a bit on your own background given that it’s good for our listeners to get an idea who we’re listening to.
Andrew Fahey: Yeah, no worries. I’m one of PointsBet’s original founders, so I’ve been working on the project now for 24 months. Before that, been in the industry the last five years. Early on when the Tom Waterhouse brand launched, I was working as marketing manager there, but as soon as that brand was sold, I went over as media manager to William Hill. I’ve always been a lover of the punt personally and sort of noticed in the market that a lot of the smaller guys were being bought out by the bigger guys, becoming a very homogenous style of offering and I thought that there was a gap in the market for something new, something different, and that’s how PointsBet came about. We were sort of betting a lot between us in different ways and we decided to do it in the spread betting format, which, essentially, the more points that your bet won by, the more you won, and we did that between us and then sort of the idea spawned from there.
Mark Haywood: Sure, and homogenous is not something you’d use to describe PointsBet from what I’ve seen. You mentioned it’s not fixed-odds betting in the sense that most people are familiar with. It is spread betting. Did you just want to take us through spread betting for those who haven’t seen it… maybe just a bit of a basic example, someone might have a game of footy or something.
Andrew Fahey: Yeah, so, essentially, the way that it works. Fixed-odds betting, you know exactly what your risk is when you place the bet and you know exactly what your potential winnings are going to be, so if you’re betting on a footy line, for example. I’ll give you an example from the weekend with Essendon versus West Coast, so if you wanted to back with the fixed-odd providers and you liked Essendon at the line, you back them at the +10, put 100 bucks down at $1.90. You know that you’re risking $100 to win 90 bucks, so as long as they don’t lose that game by more than 10, you’re going to win your bet. The way that it works with spread betting, if you put that $100 down and you back Essendon at the +10, they came out and won the game by 11, you’ve won your bet at the line by one point, so you would win one times the amount that you bet, which would be $100.
They come out, they win by 20 points at the line, so I bet winning the match by 10, you’d win 20 times your bet amount, so you’d win $2,000. On the weekend, it was actually a little bit of a fill-up for the Essendon punters. They were pretty heavily backed with us here, obviously, a lot of people thinking that West Coast don’t play well in Melbourne and that they were right and so we had, actually, a lot of money on them plus 10. Obviously, when they won the game by 61 points, that means they won by 71, with the +10, so our punters would’ve won 71 times whatever they invested, so a dollar punter would win $71. $100 punter would win $7,100. It’s every point that you win at the line by or you win your bet by. There’s a whole heap more markets that we offer that is the multiplier for your stake.
It can go against you, as well. So, say, you backed the plus 10 and ended up losing the game by 50 points, you would’ve lost your bet by 40, which means your $100 bet would actually lose you $4,000. It’s a very high risk, high rewards style bet type, but it rewards punters who back their judgement , I guess, and are confident in their predictions. The other benefit for it is you’re always in it right until the end, so if you’d had that same bet on Essendon +10 with the fixed-odds providers, at half time when they’re up by 50, you’re home. There’s no more excitement left for you right until the end of the game, but, with us, you’re hoping they go out … blow them out by 90 points and you win the maximum amount from your bet, so you’re always in it right until the end, and that’s what the punters have been loving.
Mark Haywood: Sure, and I guess, just to take the best example the other way, if you backed West Coast minus 10, you would’ve lost that bet by 40 points or whatever the margin is.
Andrew Fahey: Exactly right. So West Coast, actually, for us, to back West Coast, you’d actually have to back the -13, so that’s where we make our margins. That’s what the spread is, so we’ve got West Coast -13 or you can back Essendon +10, so there’s a three point spread there, which is our middle, essentially, and that’s where we make our margins, so the punters who back West Coast -13, they actually would’ve lost … they lost by 61, so they would’ve lost 74 times their stake, so the $10 punter would be down $740. So that’s the way that works and it is for people who do back themselves and who want to ride excitement and engagement levels for the entirety of their sporting event, as the normal punters who back West Coat at the TAB or at Sportsbet or something like that, their ticket was confetti at half time. They’ve got no enjoyment right until the end of the game. Well, some would say enjoyment, but if they’re backing with us, at least you’re engaged right from start to finish.
Mark Haywood: Yeah. Sure. On the stake, your win or your losses gives you multiple points on your stake. You pick your own stake, obviously.
Andrew Fahey: That’s right, yeah. So we offer anywhere from a one dollar bet right through the biggest bet that we’ve had in the AFL game at the moment, $500 a point. Yeah, so, at the moment, we do have a lot of punters that are coming in having mostly for the $5, $10 bets, which gives them the opportunity to win… if the team wins by 75 points at the line, they’ll win $750, and that is the natural cap that we put on. It’s not unlimited, so if you’re betting that game, if Essendon actually won by 100 points or 110 at the line, the punter would be capped at 75 on the win and, also, at 75 on the loss, so we set that marker for all markets, so it does give the punters a little bit more of an idea what their potential exposure is at the time of bet placement. Like I said, they’ll never know exactly what they’re going to win or lose at when that bet is placed, and that’s what makes it so exciting.
Mark Haywood: So it is a risky form of gambing, I guess, but having said that, you’ve got the ability to really drive your stake down to really minimise your exposure.
Andrew Fahey: Yeah, that’s it. I mean, guys that we’ve found that would typically have 100 bucks on a normal fixed-odd line are typically have a $10 bet, so we do find that the average stake is a little bit lower than at most betting agencies. We also give punters the opportunity for a lot of the major markets, so pretty much in all major sports for lines and totals. We do have the ability for you to bring in your exposure, so if you don’t want to ride the full 75 points of an AFL game and you want to only say risk at 20 times your stake, you can actually set a stop-loss so that you cannot lose more than 20 times your stake. But, yeah, most punters are deciding to ride it from start to finish. That’s the beauty of our product and that’s where we’re different, and they’re doing it because they want to be engaged right from the start when the ball’s out until the end. I mean, for that $10 punter, every single goal that’s scored is potentially $60 in your pocket, so yeah. We do provide that option for all major sports, for lines and total.
Mark Haywood: Just on those sports, which sports do you cover? So we’ve mentioned AFL…
Andrew Fahey: Yeah, so AFL’s actually probably been our biggest sport. It exploded. We offer over 200 markets on each AFL game. I mentioned a simple line example there, but we have a whole heap of markets on AFL, for example, that have never been offered anywhere globally, so we’ll do things like what’s known as a stat multiplier, which is a player’s kick multiplied by their hand hold, multiplied by their goal. So I’ll give you an example of Buddy Franklin on the weekend. He had 10 kicks, seven handballs, and four goals, so that would be 10 times seven times four, which is 280. I think our market is set around the 160 mark there, so any over punters had a big collect, but the week before, we he actually went 17 kicks, zero handballs and eight goals, so not having a handball, that market was offered at zero, so you can see how exciting and engaging that style of market is for footy, every single time you play with the ball. It’s a lot better than your simple disposals market that a fixed-odds operator might offer. It gives you a really, really ride every single touch that you play gets. So that’s AFL and that’s been extremely popular.
The US sports, for us, have been massive. Obviously, the focus that going to the statistical based market in US sports, everything you can research. For the younger, for the punter, they’re looking in and they know all the stats of the players and we offer on pretty much every statistical category how a player will perform, so from their field goal percentage in a match where every percentage point is a multiplier to the time in seconds it takes them to make their first field goal or to make their first three-point shot where every second is a multiplier or time to pass 5 points, 10 points, so all those statistical based markets in US sports as well are really popular, but we also bet on even the smaller sports, as well, so darts, snooker, cycling. It’s pretty much anything that you can bet on at the TAB or at Sportsbet anything that they offer, we offer as well, but with a different, we think more engaging, betting format.
Yeah, just to summarise, I guess, we’ve got 19 sports and over 1,000 different competitions worldwide that we bet on, resulting in roughly 7,000 markets a day, so Korean baseball, Filipino basketball, whatever you want to bet on, we have that covered.
Mark Haywood: Soccer? European football?
Andrew Fahey: Yeah, this is an interesting one, actually. Soccer is, obviously, a very popular sport for us because of the time that it’s on during the night, there’s so much content all around the world for the punters to get on, but it’s not as well set up for spread betting as a lot of the other sports that I mentioned, so with AFL, I mean, you think about an AFL line bet or an AFL total bet, just how volatile that market is. I mean, a team can win by 70 points at the line, or if you’re having a total points bet, have a game that’s predicted 180 points can easily go 230 points or 130 points, so you’ve got that natural volatility in there that builds your multiplier for spread. Soccer isn’t as much. We might offer under 2.9 goals or over 3.1 goals, so it’s a team sport. If there’s eight goals in a game, like the most recent Premier League game, it only provides five or six times multiplier effect for the punter.
But we do offer a market a goal minutes for players. They was one game, I think, where Ronaldo scored three goals, one in the 90th minute, one in the 87th minute, one in the 40th, so that would be 90 plus 87 plus 40. That’s how that market settles to build a bit of volatility, but, yeah. They’re market types that a lot of Australian punters would’ve never seen before, and if you’re the type of better who loves betting on player props, loves betting on statistics, loves having excitement from start to finish, whatever sport you want to bet on, we’ve got that covered.
Mark Haywood: Yeah… in my own limited exposure to spread betting, just with some of the European operators. I’ve seen that season, probably longer term and season markets are popular, where you back a team for a number of wins during the season and the multiplier is on how many wins they have above or below that. Is that something you guys are doing?
Andrew Fahey: Yeah. We are doing that. We offer, so each week, it’s not as much longer term, but each week for the AFL, we’re bringing out home team lines week and have all home teams or all matches total points under or over. We combine every single game and we do offer some longer term markets like who’s going to win in some of the bigger leagues, who’s going to win the competition at the end of the year, but the issue with a lot of those markets is that ir can tie up the punter’s money for some time and due to the extreme volatility, a lot of those markets … quite a few punters don’t want that money tied up for periods of months, so we do offer them, but they’re certainly not as popular as markets that are about to jump.
Mark Haywood: Yeah, sure. You mentioned earlier the stop-bet, this exposure limit you’ve got, if you just expand on that a bit, because, yeah, obviously there’s, depending on the bet and the stake there’s scope for people to lose a higher amount, so there is a function for them to limit that?
Andrew Fahey: Yeah, so every single market has a stop-loss on it, so that’s something that we’ve preset, and we usually set that. We look at historical data from all those market types and we must have it so that no more than about 5% of markets are capped, but we do need to protect both ourselves and also punters from the really, really extreme results, so as I said in the AFL or an AFL line at 75 points. For an NRL line, it’s 40 points or if you wanted to just do an NBA player points market or something like that, you’re looking at 30 points there for a player, so we do have that for every single market, and when a client goes in to make their bet, it actually tells them what their max win level is, so how much, $1 bet or $10 bet or however much they’ve requested to bet could potentially cost them and exactly how much it could potentially return, so every single market does have that.
We also have info icons next to each market that explain exactly how that market works. We do, “This is a winning example. This is a losing example. This is where we get our information for settling it from,” whether it’s from AFL.com or NBA.com or another source for a more niche to the market, so every single market will have that infor icon that’ll tell you where the market caps are at, and that its also reinforced in the bet slip when the client’s placing a bet, so we do put a lot of focus on that education piece, and we provide punters with the opportunity on the major markets if they do want to have a little bit less exposure or they don’t want to risk the full amount that we’ve set at the endpoint to bring that in a little bit.
Mark Haywood: So there is, obviously, a default limit. Then, on some of the markets, punters can set a lower limit?
Andrew Fahey: That’s right. It’s typically markets where the fixed-odds prices is a pretty good guide for the spread price. If you think about, say, cricket market, for example, in batsman runs for cricket, which is … cricket’s been really, really popular for us as well with spread betting, as you can imagine. The more runs that your batsman scores as they go over it is every boundary they hit, you’re winning another four times whatever you bet, every six you’re winning another six times your bet, but a fixed-odds market, for example, David Warner runs in a test match, they might have him at under over 32.5, a $1.90 a half because they’re basing it on his median prediction, whereas a spread market, we’d need to set that more at, say, 50 runs for the batsman, which is more where his mean total would be sitting.
So if we provide a stop-loss on that where you could potentially bat under 50 runs and set a stop loss on the over, we’ve set that price at 50, because we know that if it does go over, it could potentially go over by 150, whereas when it goes under, it can only go under by 50, so in a market like that where the mean and the median are very different, we can’t offer stop-losses, because we’ve set that price higher than the market to allow for the fact that it could go well over. Does that make sense?
Mark Haywood: Yeah. Absolutely, yes. I guess it’s about … you are betting against somebody, so it’s about balancing both sides.
Andrew Fahey: Exactly. The stop-losses have been popular on some sports, particularly the ones that do have an extreme volatility, but a lot of people do also like to have the excitement from start to finish so just leave it where the natural cap is that we’ve selected for each market.
Mark Haywood: I guess just looking at the mechanics of the bet, you mentioned earlier that there might be a 75 point limit on losses, so, for example, if I have a bet with a dollar stake, and my maximum liability would be $75, is that $75 taken out of my account straightaway, and then it’s fed back in when the bet’s settled?
Andrew Fahey: Yeah. It depends on what your current portfolio of bets are, so if you’re someone that … if that’s your only bet with us at that point in time and you’ve got no other pending bets at that time, you will need to cover the maximum exposure of that bet as a cash client, but if you already have a lot of other bets that are already on, so say you’re already on some games that start a little bit later, we only take withheld amount as a proportion of your max loss, so based on, I guess, your portfolio of bets that you have with us, that’s determined at time of bet placement. So someone who’s already got five or six bets away with us will have taken quite a bit of security from them up front, we won’t need to take the full max loss for that bet at that time, but if you’re someone that’s just coming on, that’s your first bet, first and only bet, you will need to have the money in your account to cover the max loss. That’s right.
Mark Haywood: And so there is scope? You just said you have a lot of minor markets player possessions in football for example, so there’s scope there if you want to have a number of different bets in a day, there might be scope there that you don’t have to have the full liability for all of them in your account.
Andrew Fahey: That’s right. We look at not just how likely a market is to reach its max loss, and then we calculate based on the number of pending bets that you do have at any point in time, and how much security we basically have, and if you do have quite a few that are already there, we won’t take the max loss from your next bet. That’s how it works.
Mark Haywood: Yeah, great. I know, also, both our listeners and our readers at Champions Bets, there’s a fair range of guys, so we’ve got guys who basically bet full-time for a living right down to your recreational punter. Is there a particular type of punter that you’re hoping to attract, being the first spread betting firm to really bring this to Australia?
Andrew Fahey: Yeah, so it’s punters who love sports betting more so than racing, obviously, at the moment. At the moment, we are just betting on sports, so these punters who are more focused on their sports than their racing, which is typically a younger punter at the moment. Obviously, the younger generation of punters are more sports focused, and particularly US sports, so we have a big, big focus on having a whole heap of markets that have never been offered before worldwide for all US sports, and that’s what a lot of punters have mentioned what they’re really enjoying from us. As I said before, we bet on any major statistic across all American sports, really, so it is for punters that like doing their form, they like doing form on sports betting.
It is for the more educated style of punter, so it’s not someone who just bets on grand finals or state of origins, the way that it does work, it is more people who are more educated and who bet to make sport more exciting, really, because that’s what spread betting provides. It provides that engagement from start to finish, and just the unknown of, “What could I potentially win? What could I potentially lose?” It rewards you the more correct you are, so if you’re someone who backs your predictions in sports, you’re going to love this product, so that’s what … the people who love their sports, love their US sports, regular bettors who know what they’re doing and want ultimate engagement in that department.
Mark Haywood: So you are welcoming of more, and, obviously, the products almost aimed at the more educated punter?
Andrew Fahey: Definitely. Education is one of the big things for us to be successful. We have a big focus on that, as I mentioned earlier, around every single market having info copy next to that market that explains exactly how the mechanic works for that market, gives you examples for winning and losing, examples on that market. The betslip with all your potential winnings and losses. We actually have a couple of dedicated account managers, so as soon as someone finds out and makes a deposit, one of the guys will give them a call to quickly onboard them and let them know about how our product works and explain it to them, so that’s a big focus. We’ve also got a full page dedicated to what is spread betting with widgets that give examples across a number of sports and markets, and that’s a link from out signup page, our homepage. Yeah, we know the importance of educating clients and the focus that we put on that. So punters who understand what they’re betting and what they’re doing, they’re the ones that we think this product’s suited for.
Mark Haywood: Well, it’s definitely the big growth area, sports betting. Having said that, a lot of our guys are… horse racing’s their number one love in terms of the punt. Just doing a bit of research before we talked. I have seen, I guess, from overseas forms of spread betting on racing around finishing position or lengths margin, that sort of thing. Is that something you have any plans to do at the moment?
Andrew Fahey: Yeah, so with horse racing, in the pipeline at the moment, so we’re looking to launch a full horse racing product that’ll include all your traditional fixed-odds and best tote, exotic style bets, we’ll also offer on top horse racing spreads, so you’re right. In the same way that the spread betting mechanic allows you to be unbelievably inventive with the sports betting market that you can offer, it allows you to do some pretty good ones with racing. Obviously, you need to get it approved by the racing bodies, and we’ve spoken to them about some potential horse racing spread markets that we want to offer, but, yeah, there’s a lot of really good markets there, from what the winning price is of a particular race is going to be.
So if you think of the Melbourne Cup, we might say, “Is the winning runner going to pay less than $20 or is it going to pay more than $22?” So if you really like the favourite, you might back under $20, and if the $4 favourite was to lose, the market’s marked it at 4 and back down to 20, you can win 16 times your stake, but a 100-1 pop wins like Price of Penzanceine cross the line first first, you’re back down to 20 to 1. It pays 100. You’d lose 80 times your stake, so a market like that … there’s other markets where you get points award for coming in first second, third, or fourth, and you can back a horse that could perform over that or under that, as well, so there’a whole heap of new markets that could be really interesting for horse racing punters.
Mark Haywood: Yeah, very interesting. Now, launching in Australia … I guess you’d call it still a bit of a maturing market in the punting space, and I guess you’re introducing, I guess, a new betting format, if you like. That’s something you’re confident with doing?
Andrew Fahey: Yeah. Well, I mean, we’re off to a really, really good start at the moment. It was always a little bit of an unknown. Obviously, spread betting had been Australia seven or eight years ago, but it was a very small part of the business that was operating. It was only a small focus of theirs where they offered … I think it was across four or five sport, five or six markets per sport, whereas we’re offering on every single sport with up to 200 market on the main ones, AFL and NBA and NRL, but it’s always an unknown. We think that the market has matured a lot in the last seven, eight years. Most people now know exactly what a line is, what a total is. They know all the player-style markets that are now offered and all the promotion that goes on in the marketplace. They’re advertising on different types of markets.
We think that the market is ready for a different product that might be a little bit harder to understand, whereas, years ago, it might not of been. So, yeah, we’re off to a really good start at the moment. We’ve had already over 4,000 people register in the last three months, which is a really, really good number, like well ahead of where we thought we’d be, over two and a half million dollars deposited into accounts to bet with, and the feedback has just been overwhelmingly positive. All our clients are telling all their friends about it. We’re not spending a whole heap of money on marketing at the moment. We only had a small marketing budget to start off with, but the word of mouth and the feedback and recommendations the clients have been giving to friends and other punters alike that we’re offering something different and we’re a good joint to bet with. It’s been really great.
Mark Haywood: No, definitely. Definitely something interesting for sitting down and watching a footy game on Friday night, I think.
Andrew Fahey: Yeah, that’s it. Whether you’re winning or losing your bet, you’re on the edge of your seat. Every single score can impact your financial position, and that’s the thing that the punters are loving. It’s a different choice in the market. It isn’t for everyone in the market, but it is for people who live and breathe their sport and love having a bet. So far, so good, but a lot of work to do to get the business to where we want it to be, so all things are off to a really good start so far.
Mark Haywood: Cool. So that’s probably about everything we wanted to cover. Do you have anything else you wanted to … any messages for listeners or for any other punters out there who might be thinking of giving it a go?
Andrew Fahey: Yeah. Come give it a try. Heaps of people have come on and just … they’ve started small. They’ve put dollar stakes down. They’ve used the stop-loss occasionally, but if you’re someone who backs themself and is confident in their predictions, come have a bet and see if you get rewarded for being right. Yeah, it’s a really exciting way to bet, so come give it a try.
Mark Haywood: No worries. Thanks for your time today, Andrew. Yeah. We’ll have a bit of information up on championbets.com.au. Your website, very simple to remember, pointsbet.com. Yeah, as I said, thanks for your time.
Andrew Fahey: Yeah, thanks. Thanks for having me Mark.