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 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🌧️ 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 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]
