Hedging on a wholesale market.
Here’s an interesting story from Australia. ‘Retail’ (ie on-course) bookmakers in Tasmania are having a tough time as the number of customers on-course is falling – thus reducing the liquidity of their market – while at the same time they are banned (by obsolete regulation) from accessing the ‘wholesale’ market or ‘exchange’ (in this case Betfair) and the liquidity available there. Making it worse, the same does not hold true for their customers (in fact it does, but with mobile access it is effectively unenforceable.)
Ironically regulation is hurting those it is meant to protect. This is going to happen in more and more industries and more and more countries as innovation in the economy outstrips the ability of legislation to keep up. Especially as incumbents being disrupted wield disproportionate (ie backward looking) influence on government and regulators.
