Net Exchange's Combinatorial Automated Market Maker (CAMM) is the ideal technology for fixed-odds bookmaking on horse and greyhound races.  CAMM has the potential to open up the U.K. market to fixed-odds exotic bets; i.e., those involving more than one runner such as forecasts.  The commercial possibilities of CAMM are substantial.

 

Originally developed for the U.S. Department of Defense, CAMM was designed to price and transact futures contracts that are highly interrelated.  Replace "price" with "set odds" and  "futures contracts" with "fixed-odds bets" and CAMM becomes a bookmaker for interrelated bets.  The many hundreds of bets that can be defined within a single race are all interrelated and the vast majority of these bets are exotics rather than win or place bets.  [CAMM's DoD History]

 

In gambling jurisdictions that restrict wagering to pari-mutuel betting systems, half of all volume is on exotics.  In the U.K., where punters may choose between fixed-odds and pari-mutuel systems, they overwhelming choose fixed-odds but very little of the volume is in exotics.  Bookmakers face much higher risks making book on exotics than they do on win and place bets; thus, they build in bigger spreads when making book on exotics.  The U.K. punter thus has very little incentive to play fixed-odds exotics.  If the spreads can be reduced, the potential volume is large.

 

CAMM is a new approach to making book on all race bets:  win, place, and exotics.  CAMM pools liquidity and manages risk among all bets using a single, unified process.  With a fixed-odds system based on CAMM, the U.K. punter needn't forgo exotics for the fixed-odds terms he prefers.  The potential increase in U.K. race wagering volumes is huge.

 

For more background on the application of CAMM to race wagering, see:

• CAMM:  A Pooling Mechanism for Fixed-odds Exotics
  
• A Technology Tale:  From Terrorism Assessment to Fixed-odds Exotics (reproduced, with permission, from iGamingBusiness). 

To express interest in licensing CAMM for use in the U.K. market, please contact Net Exchange via e-mail at exotics@nex.com.