Smarkets says they cannot support consistently winning punters
According to a report from a player on exchange trading forums Geekstoy and BetAngel, London-based exchange Smarkets is now closing player accounts for winning too much.
The player that reported the complaint stated that his Smarkets account was closed after winning an estimated £20,000 over a six month period.
In the back and forth that followed between the betting exchange management and the player, with Smarkets claiming to have suspended the account only after the player threatened the company's Maltese license and the player saying that by complaining to the LGA he only exercised his rights, some very interesting information emerged.
Even though Smarkets claims to have no policy of suspending winning accounts, the company asked a successful player to change his betting patterns as apparently the market makers providing liquidity to the exchange were not happy with his "greening up".
In other words, Smarkets asked the player to adjust his successful betting strategy to a slightly less profitable one.
In an email to the player, Smarkets management stated: "Please don't close out your positions on Smarkets and green up against the market maker. I know this is a pain to ask you but we're small and I need to build the trading ecosystem in the right way for our markets to be able to mature."
And again: "I have just spoken with the market maker. They are complaining again. We're too small right now to risk losing a market maker. It's probably best if you stick with Betdaq and Betfair for the time being. I need to get more market makers and more recreational punters on board before we can support consistently winning punters. Most of our customers are arbers."
Because of the inconsistencies with the exchange business model and for admitting to depend on a limited number of market makers, Smarkets has been downgraded to 2.5 (3-).
UPDATE 02-01-2013: The article above is not about the player that reported the complaint on Geekstoy and BetAngel asking to have his account re-instated being right or wrong. As a matter of fact, Bookmakers Review doesn't even know the identity of the player and we believe that Smarkets, like every other betting operator, have the right to choose with whom they want to do business with.
What is of interest to BMR are the statements of the betting exchange management admitting Smarkets is a small operation, heavily dependant on few market makers. This is enough to suggest Smarkets as a betting operation is vulnerable to problems and a rating of 2.5 better reflects such situation.