The recent closing of Play121.com may have raised questions about the state of the person-to-person betting industry, but insiders agree that the market isn't saturated.
Play 121 was running for 19 months before closing without warning. On Friday, players who visited the site were greeted by a stripped-down page with a brief message informing them that trading has ceased.
"I think potentially we can dwarf [Betfair] quickly."
Registered users were informed that amounts outstanding on future plays would be credited to their account and that anyone wanting to withdrawal funds could make a request through the site.
A brief outgoing message on the company's administration phone line said there was a backlog of requests and that customers should expect delays.
The abrupt folding of Play 121 marks the first time P2P customers have been left out in the cold, a scenario casino and sports book players have dealt with in the past.
But a host of sports book operators and P2P experts aren't worried that the Play 121 closing will have a domino effect.
The biggest challenge faced by P2P operators is maintaining enough liquidity to stay afloat, and some believe the answer lies in creating networks with multiple operators. Joe Tighe, CEO of TradingSports Limited, is actively signing up online sports books to be a part of his group's new P2P exchange. The TradingSports system will enable individual bookmakers to offer P2P options to their players in a branded setting. Any bookmaker using the TradingSports platform will be able to match up individuals with others from other sports books.
Some of the biggest names in interactive betting have already come on board. Sportingbet signed up this week, joining the likes of WWTS and SBG Global. Tighe said he hopes to sign two or three more heavyweights within the next couple of weeks.
Tighe isn't worried about running into the same problems Play 121 had. The two companies' approaches, he said, are much different.
"Play 121 shutting down was kind of inevitable," he said. "The reason it didn't work was twofold. One is that they were a B2C proposition, so they only had one system and didn't have distributed databases. They couldn't run different sports books through the same exchange. They fracture all liquidity that way. They also didn't have serious marketing dollars."
Another challenge for Tighe, and anyone else entering the P2P market, is getting a piece of the pie. Volume is the key, and one company is dominating the landscape. Since merging with competing Flutter.com earlier this year Betfair.com has managed to capture more than 90 percent of the coveted P2P market. The company's success can be attributed to the amount of registered users (at last count, 60,000-plus) on the system. And through partnerships with the likes of DrHo.com, the company has already established a multi-operator network.
It's the chicken-and-egg argument; you need an effective system to attract users, but it takes a high volume of users that makes the system effective.
Tighe feels TradingSports is well equipped to compete with Betfair. Once
the system goes live, he said, TradingSports will nearly overnight be in front of millions of potential bettors.
"I think potentially we can dwarf them quickly," he said. "But all in all, you can't fault Betfair because they have done a fantastic job and they are very smart guys. Having said that, their systems aren't really adequate to handle the turn of volumes they have."
Another key to success in the P2P space, Tighe explained, is not leaving the bookmaker totally out of the equation. TradingSports, he pointed out, will be based on the P2P principle, but the bookmaker will still dictate what propositions are available. When you allow punters to put forward the propositions, he said, an endless number of possibilities are created, something Play121 found out too late in the process.
"They took a stab at it, but they made the same mistake that Flutter made," he said. "They allowed people to make up their own propositions, and if you do that, how many people are going to think alike? Not that many."
Phone calls and e-mails from IGN to Play 121 were not returned.
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