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. Business
operations are led from its headquarters in Leeds, alongside satellite offices in
Ceuta, Dublin, London, and Malta. In February 2024, 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 200203 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 2024
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 2024.[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, 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 forR$50m. Betfair also has a subsidiary called BetfairCasino 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 2024, it launched a betting exchange in New Jersey, United States.[27]
In March
2024, 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 2024, 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 281, 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]
