The London Evening Standard is reporting today that Betbrokers "warned today that trading has collapsed because it doesn't have enough money to service its biggest punters."

That pretty much says it all.

If you have never heard about Betbrokers, they are a publicly traded company in the UK that appears to have a unique business model. They describe themselves as a retail and wholesale brokerage and clearing house for the sports betting industry.

But what does that mean? Well, ideally, they would work like a regular stock broker but for sports bets. You give them your money, and they would try to find the best bets at the best prices from 200 different bookmakers.

But this isn't an ideal world. What looks like a brokerage to the press, looks an awful lot like a betting syndicate to a bookie.

For those unaware, a betting syndicate is a group of gamblers that pool their money to make larger bets. A syndicate's real advantage comes when they can manipulate the odds on games by placing one-sided bets on games and force unsuspecting bookies to move the line - at which time the syndicate will bounce back onto the other (preferred) side with a larger bet.

Syndicates can bankrupt small bookmakers, which is why so many online books have small limits. Bookies aren't afraid of smart rich bettors, they are afraid of getting jammed by syndicates. Therefore, betting syndicates only really work when the books don't actually know that they are dealing with a syndicate.

...And then here comes Betbrokers with a publicized business model that is either completely naive or very cocky. You decide. But you can imagine how they would be viewed by bookmakers.

This just in... Bookmakers don't like syndicates or anything that looks like a syndicate - even publicly traded ones. And they certainly are not going to offer them preferred rates.

For a little more information on Betbrokers' current problems, you can reference the press release produced by them this morning that says, "Despite significant demand for the Company's product and services in the UK, a lack of available funds in the clearing house account has severely restricted the value of bets that can be taken."

In the interests of public disclosure, I should mention that Covers.com is currently embroiled in a patent lawsuit involving a subsidiary of Betbrokers, Winning Edge.