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]
