March 27, 2008

Confession: I have dabbled in online betting from time to time.

It can be exhilarating and disheartening depending on what happens that day, but one thing’s for sure : only bet out of your entertainment budget.

Bet fair is unique in that they don’t actually offer odds themselves. You, the user, bet on odds and also offer odds to other punters. For their trouble, Betfair collect 5% of the winnings for each event.

I’m not one of them, but there’s a fair chunk of people who make a lot of money from Betfair. The opportunities for betting on horse racing are wide and varied, as they cover many markets all around the world, including Ireland, Australia, the UK and the United States.

The way it works is this. Betting is where you find odds that you believe are attractive then make a bet. For example, a horse may be at $2.50, and there’s $150 available to be matched to that (don’t forget, you’re betting against other punters.) So if you want to bet $50, you select that option, type in $50, confirm, and you are set.

On the other hand, you can “lay” a horse. This is where you are offering odds of, say, $2.50, to other punters. If you have $250 in your account, then you able to accept at most $100 worth of bets on that horse. Once matched, neither bettor can pull out. They must wait for the result, after which Betfair automatically distributes the winnings.

I’m trying to save every penny possible in order to make it to Spain.

What this means in real terms is that I’ll be doing some more paid posting than I have been in the past few months. The money’s too good to ignore it.

Also, by keeping my account active, I’m able to generate some income while overseas as well, which may sustain some extra spending on my part.

There’s currently a lot of people looking over their shoulders right now at the Reserve Bank of Australia. Why? Because their mortgages are pushing them to the limit and the pain probably isn’t over yet.

Part of this problem comes back to the previous Federal Government and their politicising of interest rates. Although the RBA generally seems to act with neutrality over their decisions (witness the rate rise just before the election) it’s not as if the board members don’t pick up the newspaper every now and then. It’s impossible for them not to be affected by the political atmosphere.

A big cause of this problem is that a good portion of the Board members aren’t qualified to be making any decisions of this nature. Roger Corbett was a brilliant CEO of Woolworths. Everyone acknowledges this. However, he doesn’t have any formal background in economics.

Rather than political appointments which in the long run negatively affect mortgage holders, the Government of the day should be forced to justify appointments to the Board strictly in terms of their economic credentials. One would envision Saul Eslake joining the Board at some point, for example.