British online gambling company
Betfair is a British gambling company founded in 2000.
It operates the world's largest online betting exchange.
Its product🏧 offering also includes sports betting, online casino, online poker, and online bingo.
The business is split into two divisions, UK and🏧 International.
UK operations are conducted from its headquarters in London, while its International business operates from its satellite offices in Ceuta,🏧 Dublin, and Malta.
In February 2016, Betfair merged with Paddy Power to create Flutter Entertainment.
History [ edit ]
The company was founded🏧 in June 2000, by Andrew Black and Edward Wray.
[1] Softbank purchased 23% of Betfair in early April 2006, valuing the🏧 company at £1.5 billion.
In December 2006, Betfair completed the purchase of the horseracing publishing company Timeform (which traded under the🏧 name Portway Press Ltd).[2]
Betfair was the first betting company to sponsor an English football team, featuring on the kit of🏧 Fulham in the 2002–03 season before the Gambling Act 2005 permitted the industry to advertise on television and radio.[3][4]
In March🏧 2007, Betfair launched its own Betfair Radio service, available via its website, on the telephone and elsewhere.
This has now become🏧 Timeform Radio, broadcasting horse racing commentary and results.
[5] On 27 January 2009, Betfair announced the purchase of the TVG Network🏧 in the United States from Macrovision US$50 million as part of Macrovision's dissolving of TV Guide's assets.[6]
In November 2009, Betfair🏧 announced a deal with the New York Racing Association that allows Betfair's customers to start wagering immediately on Aqueduct's thoroughbreeding🏧 races.
[7] Betfair floated on the London Stock Exchange with a stock symbol of BET on 22 October 2010 at £13,🏧 valuing the company at £1.4bn ($2.2bn).[8]
In March 2011, the company moved some of its operations to Gibraltar to reduce the🏧 amount they paid in tax.
[9] In May 2012, Betfair launched a Sportsbook (fixed-odds betting) service to compete with traditional bookmakers.[10]
In🏧 August 2014, Net Entertainment NE AB entered into a partnership with Betfair to expand its reach into the market in🏧 the United Kingdom.
[11] It was announced in September 2015 that Paddy Power and Betfair had agreed terms for a merger.
The🏧 transaction was structured as an acquisition of Betfair by Paddy Power[12] and the enlarged entity, named Paddy Power Betfair, is🏧 based in Dublin.
[13] The merger was completed on 2 February 2016.
[14]Operations [ edit ]
As of 2013, Betfair had over 4🏧 million customers (1.
1 million active customers) and a turnover in excess of £50 million a week.
[9][15] The company employed 1,800🏧 people worldwide.[16]
Betfair claims on average 20 per cent better odds than those offered by a traditional bookmaker.
[17] Betfair charges a🏧 commission on all winning bets, the market base rate is set at between 5 and 7 percent of the net🏧 winnings for most markets, depending on the country you reside, although according to how much a client wagers on the🏧 site, it is possible to reduce the base rate by as much as 60%.[18]
However, if a bettor on the website🏧 is efficiently profitable Betfair will require them to pay at least 20% and up to 60% of gross profits in🏧 total charges after they have participated in 250 markets.
These charges are non-refundable if the bettor's account subsequently goes or reverts🏧 to an unprofitable status.[19]
In late autumn of 2005, Betfair finalised a deal that began in early summer, to purchase the🏧 online poker site PokerChamps.
com, which the company will integrate into its network, replacing a poker arm that previously used gaming🏧 technology software from CryptoLogic Inc.[20][21]
In a press release, the company's then poker head, Ben Fried, stated: "Having our own poker🏧 software puts us in command of our own destiny.
It means we can react quickly to customer feedback and continue to🏧 develop an innovative, community focused product.
We are confident that we are laying the foundations of a market leading poker room".[22]
Cash🏧 4 Clubs is a sports funding scheme set up and funded by Betfair.
The scheme provides sports grants to local community🏧 sports clubs.[23]
Overseas business [ edit ]
Betfair owns subsidiaries in the United States.
The main company is TVG Network, which is dedicated🏧 to horse racing, broadcasting live races as well as race analysis, interviews, handicapping tips and features.
It was acquired in 2009🏧 for $50m.
Betfair also has a subsidiary called BetfairCasino.
com which is a New Jersey licensed provider of online gaming products.[24]
In February🏧 2014, Betfair were granted two online gambling licenses by the State Gambling Commission of Bulgaria.[25]
On 7 April 2014, Betfair launched🏧 its betfair exchange in Italy.
[26] In May 2016, it launched a betting exchange in New Jersey, United States.[27]
In March 2018,🏧 Betfair successfully trialled an auto-cash out feature with its live betting customers in the UK and Ireland.
The features allow players🏧 to lock in their chosen profit.[28]
In December 2021, Betfair announced the launch of their online casino overseas.
Although already established within🏧 the online sports betting industry, the company launched its online casino available online to consumers residing in the UK, New🏧 Jersey, Argentina, Mexico, New Zealand, Australia, Iceland, Ireland and select states in the US.
[29]Australia [ edit ]
In November 2005 the🏧 Tasmanian government announced a deal to license Betfair Australia in the state.
It was the second licence awarded to Betfair outside🏧 the United Kingdom, the first being in Malta with subsequent licences following in Austria and Germany, and Tasmania now receives🏧 substantial tax revenues.
However it infuriated the established monopolistic totalisators and bookmakers (due to loss of revenue) and governments (due to🏧 loss of taxes) in the other Australian states.
A ban on the use of betting exchanges took effect in Western Australia🏧 on 29 January 2007, with Betfair successfully claiming this new law violated the Constitution of Australia.[30]
In a unanimous verdict by🏧 the High Court of Australia on 27 March 2008, the two provisions of the legislation, purporting to ban Western Australians🏧 from using a betting exchange and prohibiting an unauthorised business from using Western Australian race lists, were declared invalid as🏧 they applied to Betfair.
The provisions were characterised as imposing a burden on interstate trade that was protectionist in nature and🏧 therefore contravened section 92 of the constitution.
The Court decision suggests, but leaves open, that a more narrowly drafted ban may🏧 have been allowed (e.g.
, banning people in Western Australia from laying "lose bets" on events held in Western Australia).[31]
In the🏧 2012 High Court case of Betfair Pty Limited v Racing New South Wales, Betfair's appeal, against a newly enacted fee🏧 to access New South Welsh vital race field information, was rejected.
[32] The Court held that the relevant law would have🏧 no discriminatory or protectionist effect on interstate trade, thereby complying with section 92 of the Constitution of Australia, and that🏧 Betfair had not proven that the fee would cause significant economic damage (not to the extent of the appellants in🏧 Castlemaine Tooheys Ltd v South Australia[33]).
In August 2014, Betfair completed the sale of their 50% stake in Betfair Australia to🏧 venture partner Crown Resorts, one of Australia's largest gaming and entertainment groups.[34]
Chief executive officers [ edit ]
In October 2005, chief🏧 executive Stephen Hill announced his resignation when the board decided not to proceed with plans for a stock market flotation,🏧 the investors holding out for a higher valuation.
[35] In January 2006, Chief Technology Officer David Yu was appointed Chief executive🏧 of Betfair.
In December 2011, after overseeing the company's 2010 Initial public offering Yu resigned his position.
Breon Corcoran, who was formerly🏧 employed by Paddy Power, was appointed in August 2012.[36]
Betfair has sponsored many sporting events, teams and organisations, including Barcelona F.C.
[37]🏧 and Conmebol – South American football's governing body.
[38] It is currently the main shirt sponsor of Cruzeiro Esporte Clube.[39]
Controversies [🏧 edit ]
Illegal dividends [ edit ]
In its 2014 annual report, the betting firm admitted that its final dividend in 2011🏧 and the interim and final dividends for 2012 and 2013 were paid erroneously because, by law, the "company did not🏧 have sufficient distributable reserves to make those distributions and so they should not have been paid by the company to🏧 its shareholders".
Betfair also admitted that the purchase of 6.
5 million shares in April 2012 was executed when the "company did🏧 not have sufficient distributable reserves".
[40]Data theft [ edit ]
In September 2011, Betfair admitted that it had concealed the theft of🏧 confidential customer data from the company's 2010 share prospectus.
The theft included the payment card details of most of its customers,🏧 "3.
15m account usernames with encrypted security questions", "2.
9m usernames with one or more addresses" and "89,744 account usernames with bank🏧 account details".
The company further stated that it had informed the Serious Organised Crime Agency of the incident which happened on🏧 14 March 2010 but was not discovered by Betfair data security until 20 May that year.[41]
In play betting concerns [🏧 edit ]
Betfair offer in play betting on a variety of horseracing events.
There has been some controversy over alleged broadcast delays🏧 of up to five seconds.[42]
Among the bettors on Betfair's exchange are companies that place high-speed automated bets using predictive models.
Some🏧 of these companies use courtsiding data transmitted directly from agents located at the event, giving them an edge over recreational🏧 punters who do not receive the latest scores as quickly.
The practice drew widespread scrutiny after one such agent, working for🏧 a company established by former Betfair employees, was arrested at the 2014 Australian Open; charges were later dropped.[43]
Advertising [ edit🏧 ]
In September 2009, the Advertising Standards Authority (ASA) banned Betfair from running two billboard adverts which claimed that their Starting🏧 Price (SP) offered 40% better returns, on average than the industry SP.
The ASA found that only 10% of the bets🏧 used by Betfair in their calculations yielded at least 40% better returns than the industry SP.[44]
In February 2011, the ASA🏧 banned another Betfair advert, that stated "On Betfair, you cut out the middle man, which means you could win bigger".
The🏧 regulator said that the description "cutting out the middleman" was ambiguous and misleading, because the site takes a commission fee🏧 on winnings, which could be perceived as a middleman role.[45]
Premium charge [ edit ]
In September 2008, Betfair introduced a "Premium🏧 Charge" for wagerers whose winnings are particularly high compared to the amount of commission they pay.
Specifically, members whose commission charges🏧 amount to less than 20% of their gross profits, and have placed bets in at least 250 markets, are required🏧 to pay the additional charge to make up the difference.[46]
Though Betfair stated that the charge would only affect less than🏧 0.
5% of its members, it attracted criticism on its member forum and from the broader exchange betting community.
[47][48] According to🏧 The Guardian, the charge significantly changed the relationship between Betfair and its customers, as Betfair can no longer claim to🏧 be a neutral betting exchange "where winners are welcome" (its mantra for many years).
[49] In June 2011 Betfair raised its🏧 Premium Charge to 60% for some customers, a move which was met by outrage.[50]
Sports integrity [ edit ]
Betfair has noted🏧 that they have signed numerous information sharing agreements with governing bodies around the world, with whom they cooperate on matters🏧 if the latter suspects corruption to have taken place.
Betfair has agreements with some thirty sports bodies, such as the Lawn🏧 Tennis Association and the British Horseracing Association, and has been instrumental in several high-profile investigations into suspicious betting.[51]
In June 2010,🏧 high-profile racehorse owner and professional gambler Harry Findlay was banned by the British Horseracing Authority for using Betfair to bet🏧 against his own horse, Gullible Gordon.[52]
At the disciplinary hearing into Findlay's betting against Gullible Gordon, it was revealed that Findlay🏧 had been in financial difficulty and that Betfair had allowed him to use the account of a friend, racehorse owner🏧 Eammon Wilmott.
In a further twist, the bets were actually made by Findlay "associate" Glenn Gill.[53]
Betfair themselves condemned the punishing of🏧 Findlay, saying the punishment was not "proportionate or consistent with similar offences in the past.
"[52] Findlay had previously called himself🏧 "a walking advert for Betfair."[54]
Winning bets voided [ edit ]
In August 2007, Betfair took the unprecedented step of voiding all🏧 bets following a tennis match between Martin Arguello and Nikolay Davydenko because of suspicious betting patterns.[55]
In December 2011, Betfair voided🏧 all in running bets on a race at Leopardstown after an automated customer reportedly laid the winning horse Voler La🏧 Vedette at odds of 28–1, even as the mare crossed the finish line.
The controversy was described as "devastating" by Betfair🏧 CEO Stephen Morana, and it affected at least 200 customers who were refused more than £23M in winnings.
Some of these🏧 customers are believed to be pursuing their case with the independent adjudication body IBAS, as Betfair no longer falls under🏧 the jurisdiction of the Gambling Commission since its move to Gibraltar in 2011.[56][57][58]
In September 2011 Betfair refused to honour winning🏧 bets made by their customers on The Tote Jackpot bet at Newmarket Racecourse.
Although funds were removed from customer accounts before🏧 the bets had won, the company claimed that due to "technical issues in transmitting bets into the Tote pools in🏧 the last 10 minutes before the pool closed", they would not pay any winnings.
Reportedly some small gamblers were deprived of🏧 wins of up to £16,000 apiece.[59]
