If we are all winning, then who is losing?



  • I thinks it safe to say that anybody who has been on here for a year or longer is seeing significant profits.
    So if us punters are winning, and we assume (big assumption) that FI are profitable, then who is losing? I.e who is funding our profits? And how?
    I guess the answer lies in understanding FI’s revenue streams?



  • Very good question. Something I’ve pondered. New money is the answer I think. The players rise, so we make profit and FI get more commission off trades and their “bank of our money” can pay off dividends. So like with many businesses, growth is the key. Supply and demand.



  • @NewUser115892 why must someone be losing?



  • @Metropolis_山の中の市

    Because money cannot be created out of nothing! Otherwise FI are bankrolling our profits surely?



  • @Valhalla you can see the constant IS of players daily makes money. Not many still hold shares from a year ago i bet. Fantasy football element has come into play and fi making alot of money



  • @NewUser115892 But if both parties (us and FI) are making money then we are both gaining. I don't like the word 'winning' as it implies one of two outcomes (or three if you include a draw) and Implies we are fighting over a finite resource and taking from each other which isn't what this is about.

    With a market, as long as it grows (by further investment and new players added) both parties can gain. Us by capital appreciation/ dividends and FI by commission and investment. I view it as an upwards curve with more investment each week, month or whatever. Sometimes slightly in our favour, sometimes FI, but always upwards so everyone (or the vast majority) gains to a certain degree.



  • I've been at it for about 2 months now and I've only made a loss so far, despite making some profits on some trades.

    So definitely here funding some losses lol



  • @NewUser115892 Oh but you can make money out of nothing. The key being that never at any point does everyone want there money at the same time.

    Just like stocks. If the stock is in demand then everyone's money goes up. You check your portfolio and think I have X amount, same as everyone else looking at that stock. The reality is if everyone sold, not everyone would get that amount. Its paper money not real money.

    Same as making money out of thin air by loaning money.

    eg;

    Bank of Misto has £1000
    Misto lends £1000 to NewUser115892
    NewUser115892 has £1000 in his account, Bank of Misto has £1000 on its books. £1000 created out of thin air. We both think we have £1000.

    Creating credit, always creates an asset as well— specifically, the debt.

    or quantitative easing.

    There are lots of ways to makes money out of thin air.



  • The profits will dry up at some point unless they increase dividends. Without dividends this would be just a pyramid scheme. After the share (and dividend) split, and the inevitable price surges, there needs to be some sort of dividend increase to support continued investment / betting into virtual football players. Otherwise profits will dissipate and the whole scheme becomes vulnerable, unless the market grows to a huge extent regardless (though new users will be deterred by miniscule divs).



  • In a closed economy you can't make money out of nothing, but here new money is coming in all the time. FI get their commission of this, and existing members benefit from the new users providing funds.

    It is when growth of the platform stagnates or declines that suddenly there will be losers to feed the winners.



  • Okay. Thanks all for the responses so quickly.
    What I am trying to understand is what is the financial condition of FI?

    If you had to guess, for the calendar year:

    Sales
    Costs
    Profit



  • @NewUser115892 Best guess you can get is from there investment rounds.

    https://www.seedrs.com/football-index

    However this is very out of date. There cash burn will be higher now with sponsorship and sky ads, and on the other hand profits will by higher with the market growing so fast over the years.

    The main point you want is

    Monetisation strategy
    We believe our business model is significantly different from anything that has preceded it in the gambling sector. Please request a dedicated document that goes into this aspect of our business in more detail.

    In summary:
    Every Virtual Share in existence is a fixed odds bet that has been issued by us at whatever the purchase price was at the time of issue. We receive all that issue price as gross profit.

    From Gross Profit we deduct dividend payouts that will be due on that Share over time - an estimated 20%.

    15% Gambling Tax is due only on 'closed bets' (once a customer has sold his share and no longer holds it as an open bet) and where the customer 'loses' (ie sells his 'bet' for less than he bought it for). We estimate that no more than 5% gambling tax will be due in any month on Shares issued, as shares are generally held for a significant period and it's been very rare to date that they have been sold for less than the purchase price.

    It's important to point out that some shares purchased by Users have been 'pre-issued' and are currently held by another player, consequently the selling player receives the sale price and we receive only 2% trading commission. We only 'issue a new share' in response to 'excess demand' for that footballer (rather than excess supply).

    During the period of our Test Campaign 71% of Shares purchased were issued directly by us and were not offered for sale by Users in the market. (That is where so much money for FI comes from, just think of all the Pogba's sold yesterday at £13+, 1000s would have been issued by FI as a guess)

    Gross Gambling Yield (profit) on the £17bn bet on football this year is likely to be less than 4.5%. Our margin is demonstrably considerably higher than that figure.



  • There are a lot of people who think they are winning that will lose.

    There are thousands of players out there who will all be worth nothing sooner or later. In the case of some players, later may be 15 years , for some players it might be 6 months.

    A player might have green colours on the portfolio screen now but if you don't get out before they crash that won't help you much.

    It's more likely to be new users that take the hit as they are paying the higher prices.



  • @mike778 said in If we are all winning, then who is losing?:

    There are a lot of people who think they are winning that will lose.

    There are thousands of players out there who will all be worth nothing sooner or later. In the case of some players, later may be 15 years , for some players it might be 6 months.

    A player might have green colours on the portfolio screen now but if you don't get out before they crash that won't help you much.

    It's more likely to be new users that take the hit as they are paying the higher prices.

    Exactly this, no one has won anything until they sell up and cash out. If everyone was to do that then prices will tumble and the first out survive



  • @Metropolis_山の中の市

    "Why must someone always be losing" you ask. Well, because that's almost always how money works. If someone is gaining, someone is always losing. Here's a fuller explanation though. Hopefully it answers your questions.

    Case Study
    If I bought 100x Pogba Futures at £5 each, a year ago, Football Index have taken £500 from me.

    If each Pogba Future, paid £1 dividends over the year for various performance/buzz bonuses, Football Index, pay me £100 so they are down to £400.

    In that time, Pogba's Futures have risen to £15, so if I sell him, Football Index pay me £1500 and take their 2% commission, which is £30. Which means Football Index have had £500 income, but paid out £1570 which means they have lost £1070 for the year.

    On top of that, they likely have Staff, Office Costs, Tax, Professional Fee's, Hosting, Recruitment Costs, Marketing Costs, OPTA Subscription etc, so all of the money used to pay those things has to come from somewhere.

    Now the things that we can't see include:

    1.) How much interest they are making by holding our money
    2.) How much ad revenue they are generating.
    3.) Is our data being sold/used for other reasons

    But importantly what we all need to remember, is that this is a form of gambling.

    How many players are swooping in on a day like today, buying 100x Alderweireld's at £2.53 for a total of £253, then panic selling them at £2.26, for a total of £226, of which Football Index slices another £5 off for their 2% commission, generating them a total of £32 on that days transactions.



  • @NewUser162554 the last time fi share split, only 200 players fought for one 20p mb payout. They split by 4. Mb became 5p. Prices rose in those considered only mb magnets.190 other players were deemed worthless. Maybe a year later the dividend rise created was pb and treble mb. Anyone holding the "worthless" ramos at 80p or even worthless alderweireld benefited massively by that increase as did every player. This time round, 1000 players,mb, pb, g@a are going to be here, with thousands more traders putting money in this tim e around, that div increase will happen quicker than last time. All i see is the same as last time is happening already. People all jumping on those mb players before a split. I had to withdraw all my money due to real life issues when neymar was 4.35 for example. entire index had risen by time i came back (the 35 neymars i had at 4.35 were now 13.00.😱) my point is patience. Think ahead knowing what came before. Dividends are nice however i believe in possibly 6-9 months those 980 plus players everybody doesnt want will get a huge boost alongside those top players with a new way to win or huge increase to what they currently are. I bet fi already know what they will do



  • I don't think everyone is winning.

    Those involved at the top end of the market are mainly seeing good results as people stock up on the big guns & top players.

    The mid to lower end of the market are essentially seeing losses. This is because prospects in general are not being targeted at present unless they are linked with a move which often see's a spike in their price.

    Obviously, the winter breaks are playing a part too in the other top leagues. Plus say if you hold a Ukrainian player who is outside the big leagues his price will inevitably drop until the Europa League returns in February.



  • In that time, Pogba's Futures have risen to £15, so if I sell him, Football Index pay me £1500 and take their 2% commission, which is £30. Which means Football Index have had £500 income, but paid out £1570 which means they have lost £1070 for the year.

    I believe that FI said most FTs are bought off other traders, and that they step in occasionally and buy back to keep the market moving. Any they buy back would then be added to the sell pool? Where they are raking it in atm are on the bigger spreads, which we are seeing more and more of due to G&A.

    Even when order books come in, there will still be a section of traders who want the IS option. Most of us are guilty of that, when calculating the IS loss is worth the profit that may be gained on the next buy. If traders IS at a 3-6% spread plus com, those players will still be sold at selling price.



  • @NewUser222709 said in If we are all winning, then who is losing?:

    Case Study
    If I bought 100x Pogba Futures at £5 each, a year ago, Football Index have taken £500 from me.
    If each Pogba Future, paid £1 dividends over the year for various performance/buzz bonuses, Football Index, pay me £100 so they are down to £400.
    In that time, Pogba's Futures have risen to £15, so if I sell him, Football Index pay me £1500 and take their 2% commission, which is £30. Which means Football Index have had £500 income, but paid out £1570 which means they have lost £1070 for the year.

    You're looking at it the wrong way. FI don't keep just your money in a little separate pots, it would all go in a trading account. Few thing if you sold back to FI and not another player. You get 2% commission plus the spread a extra 2-5% normally. Also if the player price has gone for £5 to £15 FI have issued a lot of new shares on that player(if we are looking at it as separate pots for everything) the price of a player doesn't rise without other people buying, so look at it as FI paying out your bet from that last 100 Pogba issued at the new £15 price. So FI don't have to worry about paying out on a rising player. Same holds true for a falling player.

    You buy 100 Pogba at £15 he break his leg and goes to China. Drops to £3 a share. You sell to FI. FI had already issued those shares to the market they just take them back and keep the difference.



  • @Misto

    Sure but that just means someone else is losing. The loses are getting passed along but they still exist.


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