Betfair
Encyclopedia
Betfair is the world's largest Internet
betting exchange
. The company is based in Hammersmith
in West London
, England. Since Betfair was launched in June 2000 it has become the largest online betting company in the UK
and the largest betting exchange in the world. Betfair claim to have over 3 million customers and a turnover in excess of £50 million a week. The company employs about 1200 people in the UK.
A betting exchange allows punters (gamblers
) to bet at odds
set and requested by other punters rather than by a bookmaker
. Members can make both 'back' bets (normal bets on a selection to win) and 'lay' bets (bets on the opposite side of the Back, against the selection), thereby eliminating the traditional bookmaker.
Betfair claims on average 20 percent better odds than those offered by a traditional bookmaker. Betfair charges a commission
on all winning bets, which is set at 5 percent of the net winnings for most markets, although according to how much a client wagers on the site, it is possible to reduce the amount of commission paid to as low as 2 percent.
The Betfair interface can be seen as bearing a strong similarity to that of the stock exchange
, with the 'back' and 'lay' options comparing to the buying and selling of derivatives
. Indeed there are many professionals who play the Betfair market for profit, using purpose-designed software 'robots', in much the same way as a stock market
trader
.
and Edward Wray, won the Ernst and Young Emerging Entrepreneur of the Year award. In 2003, the company was one of about 50 recipients of the Queen's Awards for Enterprise
in the Innovation category. The Queen's Awards are the UKs highest official awards for business.
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.
In November 2005 the Tasmanian government
announced a deal to licence Betfair in the state. It was the second licence awarded to Betfair outside the UK
- 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 but Betfair successfully claimed this new law violated the Constitution of Australia
.
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).
On 28 February 2006 Betfair launched a new interface, including current live scores of in-play soccer matches, jockey silks and horse form, and an 'express view' in which only the currently available 'back' odds are viewable. Despite claims of 'dumbing down' from a group established customers on Betfair's forum, there was a significant increase in membership and deposits during the Cheltenham Festival
.
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).
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.
Betfair won its second Queen's Award for Enterprise, this time for International Trade, in April 2008. It joined an elite group of multiple Queen's Award winners and was recognition of the fact that over half of all new customers now come from outside the UK and they account for 44% of all revenue.
In January 2009, Betfair acquired Macrovision's Television Games Network interactive TV horserace wagering service for $50 million in cash.
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
thoroughbred
races.
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).
In March 2011 the company moved some of its operations to Gibraltar
to reduce the amount they paid in tax.
Betfair's Australian and New Zealand operations are a 50:50 joint venture between Betfair UK and Crown Limited
(listed on the ASX). Betfair has several thousand customers in Australia
and New Zealand
. For the first 2½ years of its existence in Australia, Betfair's marketing activities were restricted to Tasmania
, where it has been licensed since February 2006. However, in October 2008 the Victorian and NSW governments announced their intention to remove laws that prevented interstate betting companies from advertising in their jurisdictions. These changes enabled Betfair to advertise more broadly. Betfair is well known in Australia, originally because of negative publicity from the racing industry and the totalisators. However, Betfair signed a landmark agreement with Racing Victoria in July 2006. Betfair now has information-sharing agreements with most racing bodies in Australia and most major professional sports, including the Australian Football League
, the National Rugby League
, the Australian Rugby Union
, Football Federation Australia
, Cricket Australia
, the PGA Tour of Australasia
and Tennis Australia
. In Australia, Betfair also pays voluntary product fees to sports on whose events it offers markets.
On 27 January 2009, Betfair announced the purchase of the TVG Network
in the United States from Macrovision
$50 million USD as part of Macrovision
's dissolving of TV Guide's assets.
. This is because the "live" transmissions are actually the subject of an artificial delay of up to five seconds. This means that customers of Betfair find themselves in the invidious position of placing bets on outcomes that have already been decided. A whole industry has grown up to take advantage of Betfair customers who watch At The Races and bet in play. These enterprises use faster transmissions to "front run" Betfair customers. Matt Williams of the Racing Post described the situation "Why would anybody want their pockets picked by punters privileged to a faster feed? Some exchange bettors carry on punting regardless, whereas other, greener, in-running punters are oblivious to the speed differences." http://www.thefreelibrary.com/Racing%3A+ATR+dismisses+the+time+delay+with+SIS+as+a+%27non-issue%27.-a0142880766
Even though Betfair insisted that the charge would only affect a very small portion of its members (less than 0.5%), it attracted a great deal of criticism on its member forum and from the broader exchange betting community. According to The Guardian, the charge has significantly changed the relationship between Betfair and its customers, as Betfair can no longer claim to be a neutral bet exchange provider "where winners are welcome" (its mantra for many years).
The customers most likely to be affected by the Premium Charge are successful traders, whose repeated backing and laying at small margins results in few losses (and hence yield little commission). Backers with a particularly good strike-rate may also be subject to the additional charge.
In June 2011 Betfair announced that it will raise the Premium Charge to 60% for some customers, a move which has been met by outrage.
, Ladbrokes
and William Hill. Betfair has led their defence by countering that while corruption is possible on any gambling platform, the bookies' arguments are motivated not by concern for the integrity
of sport but by commercial
interests. Betfair also asserts that unlike the high street brokers, who all accept anonymous cash bets, Betfair is aware of who their customers are. Customers are required to create personal accounts, and Betfair keeps records of each customer's betting history. Betfair in particular has noted that they have signed numerous information-sharing agreements with governing bodies around the world with whom they co-operate fully on matters if the latter suspects corruption to have taken place. The company shares information through agreements with some 30 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.
In August 2007, Betfair took the unprecedented step to void all bets following a tennis match between Martin Arguello and Nikolay Davydenko
because of suspicious betting patterns. It prompted the establishment of a new investigative agency by the governing bodies of tennis.
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.
site PokerChamps.com, which the company will integrate into its network, replacing a poker arm that previously used gaming technology software from CryptoLogic Inc
. On 30 October 2006, Betfair Poker left the Cryptologic network to move to its new platform.
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."
On 21 July 2006, all American
accounts were frozen and the return of players' funds were in progress, a move that immediately followed the arrest of David Carruthers
, former Chief Executive at BetonSports
. Betfair had previously implemented geolocation software
in 2004 to deny U.S. residents the ability to place bets on its site.
Noted professional players who were sponsored by Betfair include John Tabatabai
, Sorel Mizzi
, Peter Jepsen
and World Series of Poker Europe
bracelet winner Annette Obrestad
Since then Annette has left, and moved over to fulltiltpoker and has become a red name pro there. Betfair Poker also sponsor the WSOPE festival, which is a European version of the World Series of Poker held in the USA. This event is held at The Casino at The Empire in London's Leicester Square.
The games offered in the Zero lounge are blackjack
, roulette
, baccarat
, Jacks or better
and Crazy Eights
.
An earlier product, HiLo was closed down in 2009.
, Cluedo
and Deal or No Deal
.
Internet
The Internet is a global system of interconnected computer networks that use the standard Internet protocol suite to serve billions of users worldwide...
betting exchange
Bet exchange
A betting exchange is an entity which provides "trading" facilities for retail or bookmaker customers to buy and sell contracts. Contracts are structured as binary options. Some betting exchanges may also offer CFD products...
. The company is based in Hammersmith
Hammersmith
Hammersmith is an urban centre in the London Borough of Hammersmith and Fulham in west London, England, in the United Kingdom, approximately five miles west of Charing Cross on the north bank of the River Thames...
in West London
London
London is the capital city of :England and the :United Kingdom, the largest metropolitan area in the United Kingdom, and the largest urban zone in the European Union by most measures. Located on the River Thames, London has been a major settlement for two millennia, its history going back to its...
, England. Since Betfair was launched in June 2000 it has become the largest online betting company in the UK
United Kingdom
The United Kingdom of Great Britain and Northern IrelandIn the United Kingdom and Dependencies, other languages have been officially recognised as legitimate autochthonous languages under the European Charter for Regional or Minority Languages...
and the largest betting exchange in the world. Betfair claim to have over 3 million customers and a turnover in excess of £50 million a week. The company employs about 1200 people in the UK.
A betting exchange allows punters (gamblers
Gambling
Gambling is the wagering of money or something of material value on an event with an uncertain outcome with the primary intent of winning additional money and/or material goods...
) to bet at odds
Odds
The odds in favor of an event or a proposition are expressed as the ratio of a pair of integers, which is the ratio of the probability that an event will happen to the probability that it will not happen...
set and requested by other punters rather than by a bookmaker
Bookmaker
A bookmaker, or bookie, is an organization or a person that takes bets on sporting and other events at agreed upon odds.- Range of events :...
. Members can make both 'back' bets (normal bets on a selection to win) and 'lay' bets (bets on the opposite side of the Back, against the selection), thereby eliminating the traditional bookmaker.
Betfair claims on average 20 percent better odds than those offered by a traditional bookmaker. Betfair charges a commission
Commission (remuneration)
The payment of commission as remuneration for services rendered or products sold is a common way to reward sales people. Payments often will be calculated on the basis of a percentage of the goods sold...
on all winning bets, which is set at 5 percent of the net winnings for most markets, although according to how much a client wagers on the site, it is possible to reduce the amount of commission paid to as low as 2 percent.
The Betfair interface can be seen as bearing a strong similarity to that of the stock exchange
Stock exchange
A stock exchange is an entity that provides services for stock brokers and traders to trade stocks, bonds, and other securities. Stock exchanges also provide facilities for issue and redemption of securities and other financial instruments, and capital events including the payment of income and...
, with the 'back' and 'lay' options comparing to the buying and selling of derivatives
Derivative (finance)
A derivative instrument is a contract between two parties that specifies conditions—in particular, dates and the resulting values of the underlying variables—under which payments, or payoffs, are to be made between the parties.Under U.S...
. Indeed there are many professionals who play the Betfair market for profit, using purpose-designed software 'robots', in much the same way as a stock market
Stock market
A stock market or equity market is a public entity for the trading of company stock and derivatives at an agreed price; these are securities listed on a stock exchange as well as those only traded privately.The size of the world stock market was estimated at about $36.6 trillion...
trader
Stock trader
A stock trader or a stock investor is an individual or firm who buys and sells stocks in the financial markets. Many stock traders will trade bonds as well...
.
History
Betfair's co-founders, Andrew BlackAndrew Black (gambling entrepreneur)
Andrew Black, together with Edward Wray, was founder of Betfair, the world's first and largest bet exchange. Black and Wray have won many awards, including Ernst & Young young entrepreneurs of the year in 2002....
and Edward Wray, won the Ernst and Young Emerging Entrepreneur of the Year award. In 2003, the company was one of about 50 recipients of the Queen's Awards for Enterprise
Queen's Awards for Enterprise
The Queen's Awards for Enterprise is an awards programme for British businesses and other organizations who excel at international trade, innovation or sustainable development. They are the highest official UK awards for British businesses...
in the Innovation category. The Queen's Awards are the UKs highest official awards for business.
In October 2005 chief executive Stephen Hill announced his resignation when the board decided not to proceed with plans for a stock market
Stock market
A stock market or equity market is a public entity for the trading of company stock and derivatives at an agreed price; these are securities listed on a stock exchange as well as those only traded privately.The size of the world stock market was estimated at about $36.6 trillion...
flotation, the investors holding out for a higher valuation.
In November 2005 the Tasmanian government
Government of Tasmania
The form of the Government of Tasmania is prescribed in its Constitution, which dates from 1856, although it has been amended many times since then...
announced a deal to licence Betfair in the state. It was the second licence awarded to Betfair outside the UK
United Kingdom
The United Kingdom of Great Britain and Northern IrelandIn the United Kingdom and Dependencies, other languages have been officially recognised as legitimate autochthonous languages under the European Charter for Regional or Minority Languages...
- the first being in Malta
Malta
Malta , officially known as the Republic of Malta , is a Southern European country consisting of an archipelago situated in the centre of the Mediterranean, south of Sicily, east of Tunisia and north of Libya, with Gibraltar to the west and Alexandria to the east.Malta covers just over in...
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 but Betfair successfully claimed this new law violated the Constitution of Australia
Constitution of Australia
The Constitution of Australia is the supreme law under which the Australian Commonwealth Government operates. It consists of several documents. The most important is the Constitution of the Commonwealth of Australia...
.
In a unanimous verdict
Betfair Pty Limited v Western Australia
Betfair Pty Limited v Western Australia 234 CLR 418; 244 ALR 32; HCA 11] determined whether a series of amendments made by the Western Australian government to prohibit the operation of betting exchanges amounted to discriminatory burdens of a protectionist kind.-Background:The first plaintiff,...
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).
On 28 February 2006 Betfair launched a new interface, including current live scores of in-play soccer matches, jockey silks and horse form, and an 'express view' in which only the currently available 'back' odds are viewable. Despite claims of 'dumbing down' from a group established customers on Betfair's forum, there was a significant increase in membership and deposits during the Cheltenham Festival
Cheltenham Festival
The Cheltenham Festival is one of the most prestigious meetings in the National Hunt racing calendar in the United Kingdom, and has race prize money second only to the Grand National...
.
Softbank
SoftBank
is a Japanese telecommunications and internet corporation, with operations in broadband, fixed-line telecommunications, e-Commerce, Internet, broadmedia, technology services, finance, media and marketing, and other businesses....
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
Timeform
Timeform Publications is a publishing company in Halifax, West Yorkshire, England founded in 1948 to provide information to fans, bettors, and others involved in the horse racing industry...
(which traded under the name Portway Press Ltd).
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.
Betfair won its second Queen's Award for Enterprise, this time for International Trade, in April 2008. It joined an elite group of multiple Queen's Award winners and was recognition of the fact that over half of all new customers now come from outside the UK and they account for 44% of all revenue.
In January 2009, Betfair acquired Macrovision's Television Games Network interactive TV horserace wagering service for $50 million in cash.
In November 2009, Betfair announced a deal with the New York Racing Association
New York Racing Association
The New York Racing Association, Inc. is the not-for-profit corporation that operates the three largest thoroughbred horse-racing tracks in the state of New York. It runs Aqueduct Racetrack in South Ozone Park, Queens, Belmont Park in Elmont, Long Island , and Saratoga Race Course in Saratoga...
that allows Betfair’s customers to start wagering immediately on Aqueduct's
Aqueduct Racetrack
Aqueduct Racetrack is a thoroughbred horse-racing facility and racino in Ozone Park, Queens, New York. Its racing meets usually are from late October/early November through April.-History:...
thoroughbred
Thoroughbred
The Thoroughbred is a horse breed best known for its use in horse racing. Although the word thoroughbred is sometimes used to refer to any breed of purebred horse, it technically refers only to the Thoroughbred breed...
races.
Betfair floated on the London Stock Exchange
London Stock Exchange
The London Stock Exchange is a stock exchange located in the City of London within the United Kingdom. , the Exchange had a market capitalisation of US$3.7495 trillion, making it the fourth-largest stock exchange in the world by this measurement...
with a stock symbol of BET on 22 October 2010 at £13, valuing the company at £1.4bn ($2.2bn).
In March 2011 the company moved some of its operations to Gibraltar
Gibraltar
Gibraltar is a British overseas territory located on the southern end of the Iberian Peninsula at the entrance of the Mediterranean. A peninsula with an area of , it has a northern border with Andalusia, Spain. The Rock of Gibraltar is the major landmark of the region...
to reduce the amount they paid in tax.
Outside the United Kingdom
Although the bulk of its customer base is in the UK, Betfair offers its services in a number of countries. Betfair has never accepted customers and/or credit card numbers from the United States. Betfair was not seriously affected when the U.S. Congress passed strict prohibitions affecting Internet gambling in late 2006.Betfair's Australian and New Zealand operations are a 50:50 joint venture between Betfair UK and Crown Limited
Crown Limited
Crown Limited is one of Australia's largest gaming and entertainment groups. At June 2010, Crown Limited had a market capitalisation of just over A$6 billion and accounted for 27.53% of the S&P/ASX 200 Hotels Restaurants & Leisure Industry Group....
(listed on the ASX). Betfair has several thousand customers in Australia
Australia
Australia , officially the Commonwealth of Australia, is a country in the Southern Hemisphere comprising the mainland of the Australian continent, the island of Tasmania, and numerous smaller islands in the Indian and Pacific Oceans. It is the world's sixth-largest country by total area...
and New Zealand
New Zealand
New Zealand is an island country in the south-western Pacific Ocean comprising two main landmasses and numerous smaller islands. The country is situated some east of Australia across the Tasman Sea, and roughly south of the Pacific island nations of New Caledonia, Fiji, and Tonga...
. For the first 2½ years of its existence in Australia, Betfair's marketing activities were restricted to Tasmania
Tasmania
Tasmania is an Australian island and state. It is south of the continent, separated by Bass Strait. The state includes the island of Tasmania—the 26th largest island in the world—and the surrounding islands. The state has a population of 507,626 , of whom almost half reside in the greater Hobart...
, where it has been licensed since February 2006. However, in October 2008 the Victorian and NSW governments announced their intention to remove laws that prevented interstate betting companies from advertising in their jurisdictions. These changes enabled Betfair to advertise more broadly. Betfair is well known in Australia, originally because of negative publicity from the racing industry and the totalisators. However, Betfair signed a landmark agreement with Racing Victoria in July 2006. Betfair now has information-sharing agreements with most racing bodies in Australia and most major professional sports, including the Australian Football League
Australian Football League
The Australian Football League is both the governing body and the major professional competition in the sport of Australian rules football...
, the National Rugby League
National Rugby League
The National Rugby League is the top league of professional rugby league football clubs in Australasia. The NRL's main competition, called the Telstra Premiership , is contested by sixteen teams, fifteen of which are based in Australia with one based in New Zealand...
, the Australian Rugby Union
Australian Rugby Union
The Australian Rugby Union is the governing body of rugby union in Australia. It was founded in 1949 and is a member of the International Rugby Board the sport's governing body. It consists of eight member unions, representing each state and territory...
, Football Federation Australia
Football Federation Australia
Football Federation Australia is the governing body for the sport of football in Australia. Before 1 January 2005, it was known as the Australian Soccer Association , which succeeded Soccer Australia in this role in 2003...
, Cricket Australia
Cricket Australia
Cricket Australia, formerly known as the Australian Cricket Board, is the governing body for professional and amateur cricket in Australia. It was originally formed in 1905 as the Australian Board of Control for International Cricket...
, the PGA Tour of Australasia
PGA Tour of Australasia
The PGA Tour of Australasia is a professional golf tour for men. Official events on the tour count for World Golf Ranking points. The tour was formed in 1973 as the PGA Tour of Australia and adopted its current name in 1991....
and Tennis Australia
Tennis Australia
Tennis Australia is the governing body for the sport of Tennis in Australia. The organisation exists to promote tennis and conduct domestic and international tournaments on behalf of Australia, including the Australian Open and the Davis Cup for the Australian Davis Cup Team...
. In Australia, Betfair also pays voluntary product fees to sports on whose events it offers markets.
On 27 January 2009, Betfair announced the purchase of the TVG Network
TVG Network
TVG Network is an American specialty channel dedicated to horse racing. The company broadcasts from Los Angeles, California and is available in the United States on Dish Network and DirecTV as well as select cable companies...
in the United States from Macrovision
Macrovision
Rovi Corporation is a globally operating, US-based company that provides guidance technology, entertainment data, copy protection, industry standard networking and media management technology for digital entertainment devices and services...
$50 million USD as part of Macrovision
Macrovision
Rovi Corporation is a globally operating, US-based company that provides guidance technology, entertainment data, copy protection, industry standard networking and media management technology for digital entertainment devices and services...
's dissolving of TV Guide's assets.
In Play Betting Controversy
Betfair offer in play betting on a variety of horseracing events. There has been considerable controversy http://www.thefreelibrary.com/Racing%3A+ATR+dismisses+the+time+delay+with+SIS+as+a+%27non-issue%27.-a0142880766 surrounding bets placed on events televised by the satellite channel At The RacesAt the Races
At The Races is a British television channel, originally co-founded with Channel 4, but now owned by a partnership between British Sky Broadcasting, Arena Leisure Plc and 30 UK racecourses....
. This is because the "live" transmissions are actually the subject of an artificial delay of up to five seconds. This means that customers of Betfair find themselves in the invidious position of placing bets on outcomes that have already been decided. A whole industry has grown up to take advantage of Betfair customers who watch At The Races and bet in play. These enterprises use faster transmissions to "front run" Betfair customers. Matt Williams of the Racing Post described the situation "Why would anybody want their pockets picked by punters privileged to a faster feed? Some exchange bettors carry on punting regardless, whereas other, greener, in-running punters are oblivious to the speed differences." http://www.thefreelibrary.com/Racing%3A+ATR+dismisses+the+time+delay+with+SIS+as+a+%27non-issue%27.-a0142880766
Premium Charge
In September 2008, Betfair introduced a "Premium Charge" for bettors whose winnings were deemed to be disproportionately high when compared to the amount of commission they pay. Specifically, members whose commission charges amount to less than 20% of their gross profits (across at least 250 markets) are required to pay the additional charge to make up the difference.Even though Betfair insisted that the charge would only affect a very small portion of its members (less than 0.5%), it attracted a great deal of criticism on its member forum and from the broader exchange betting community. According to The Guardian, the charge has significantly changed the relationship between Betfair and its customers, as Betfair can no longer claim to be a neutral bet exchange provider "where winners are welcome" (its mantra for many years).
The customers most likely to be affected by the Premium Charge are successful traders, whose repeated backing and laying at small margins results in few losses (and hence yield little commission). Backers with a particularly good strike-rate may also be subject to the additional charge.
In June 2011 Betfair announced that it will raise the Premium Charge to 60% for some customers, a move which has been met by outrage.
Controversy
The fact that punters can use exchanges to lay outcomes has caused tremendous criticism from traditional bookmakers with much of the anger coming from the UK's "Big Three" - Gala Coral GroupGala Group
Gala Coral Group Ltd is a British betting shop, bingo and casino operator owned by private equity houses Candover Investments, Cinven and Permira. In October 2005 it merged with Coral Eurobet for £2.18 billion. The acquisition made it the UK's third largest bookmaker and largest bingo operator. It...
, Ladbrokes
Ladbrokes
Ladbrokes plc is a British based gambling company. It is based in Rayners Lane in Harrow, London owned by Bhavin Kakaiya. From 14 May 1999 to 23 February 2006, when it owned the Hilton hotel brand outside the United States, it was known as Hilton Group plc...
and William Hill. Betfair has led their defence by countering that while corruption is possible on any gambling platform, the bookies' arguments are motivated not by concern for the integrity
Integrity
Integrity is a concept of consistency of actions, values, methods, measures, principles, expectations, and outcomes. In ethics, integrity is regarded as the honesty and truthfulness or accuracy of one's actions...
of sport but by commercial
Commerce
While business refers to the value-creating activities of an organization for profit, commerce means the whole system of an economy that constitutes an environment for business. The system includes legal, economic, political, social, cultural, and technological systems that are in operation in any...
interests. Betfair also asserts that unlike the high street brokers, who all accept anonymous cash bets, Betfair is aware of who their customers are. Customers are required to create personal accounts, and Betfair keeps records of each customer's betting history. Betfair in particular has noted that they have signed numerous information-sharing agreements with governing bodies around the world with whom they co-operate fully on matters if the latter suspects corruption to have taken place. The company shares information through agreements with some 30 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.
In August 2007, Betfair took the unprecedented step to void all bets following a tennis match between Martin Arguello and Nikolay Davydenko
Nikolay Davydenko
Nikolay Vladimirovich Davydenko is a Ukrainian-Russian tennis player. Davydenko's best result in a Grand Slam tournament has been reaching the semifinals, which he has done on four occasions: twice each at the French Open and the U.S. Open. His biggest achievement to date was winning the 2009 ATP...
because of suspicious betting patterns. It prompted the establishment of a new investigative agency by the governing bodies of tennis.
In September 2009, the Advertising Standards Authority
Advertising Standards Authority (United Kingdom)
The Advertising Standards Authority is the self-regulatory organisation of the advertising industry in the United Kingdom. The ASA is a non-statutory organisation and so cannot interpret or enforce legislation. However, its code of advertising practice broadly reflects legislation in many instances...
(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.
Other services
In addition to its online betting market, Betfair offers a number of gambling-related services.Betfair Poker
In late autumn of 2005, Betfair finalised a deal that began in early summer, to purchase the online pokerOnline poker
Online poker is the game of poker played over the Internet. It has been partly responsible for a dramatic increase in the number of poker players worldwide...
site PokerChamps.com, which the company will integrate into its network, replacing a poker arm that previously used gaming technology software from CryptoLogic Inc
CryptoLogic Inc
Cryptologic Limited is a Dublin, Ireland-based software application service provider , one of the five largest in the industry along with Boss Media, Microgaming, Playtech, and Real Time Gaming....
. On 30 October 2006, Betfair Poker left the Cryptologic network to move to its new platform.
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."
On 21 July 2006, all American
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
accounts were frozen and the return of players' funds were in progress, a move that immediately followed the arrest of David Carruthers
David Carruthers
David Carruthers was the CEO and a board member of online gambling company BETonSPORTS plc. He served as CEO from July 2000 until July 24, 2006...
, former Chief Executive at BetonSports
BetonSports
BetonSports plc is a British online gambling company founded by Gary Kaplan in 1995. The company was one of the biggest players in the United States online gaming market, drawing in several billion US dollars in wagers in the early 2000s...
. Betfair had previously implemented geolocation software
Geolocation software
In computing, geolocation software is used to deduce the geolocation of another party. For example, on the Internet, one geolocation approach is to identify the subject party's IP address, then determine what country , organization, or user the IP address has been assigned to, and finally,...
in 2004 to deny U.S. residents the ability to place bets on its site.
Noted professional players who were sponsored by Betfair include John Tabatabai
John Tabatabai
John Tabatabai is a Welsh professional poker player based in London, England. He was the runner-up to Norwegian poker player Annette Obrestad in the first World Series of Poker Europe Main Event. He is currently sponsored by Betfair....
, Sorel Mizzi
Sorel Mizzi
Sorel Mizzi is a professional poker player. Mizzi plays online poker under the names of "Imper1um" and "Zangbezan24"...
, Peter Jepsen
Peter Jepsen
Peter Willers Jepsen is a Danish poker player. In March 2007, he won the European Poker Tour zł15,000 No Limit Hold'em in Warsaw, Poland, netting him $415,679. In September 2008, he set a new World Record for winning the highest ever pot in online poker history...
and World Series of Poker Europe
World Series of Poker Europe
The World Series of Poker Europe is the first expansion effort of World Series of Poker-branded poker tournaments outside the United States. Since 1970, participants had to travel to Las Vegas if they wanted to compete in the World Series of Poker...
bracelet winner Annette Obrestad
Annette Obrestad
Annette Obrestad is a Norwegian poker player. Obrestad is the youngest person to ever win a World Series of Poker Europe bracelet...
Since then Annette has left, and moved over to fulltiltpoker and has become a red name pro there. Betfair Poker also sponsor the WSOPE festival, which is a European version of the World Series of Poker held in the USA. This event is held at The Casino at The Empire in London's Leicester Square.
Zero Lounge
In 2006 Betfair Casino introduced its "Zero lounge - where the house has no edge". According to Betfair, perfect play should result in the player having an equal chance of winning or losing. For example, the roulette wheel has no zero. This means that someone playing red-black, odd-even, or high-low has an exactly 50% chance of winning, (as opposed to a 48.65% chance on a normal roulette wheel with a zero). However, in some games, such as blackjack, it is necessary to learn perfect play in order to match the house. Players who draw a card when they have 17 or more are likely to lose money to the house. The zero blackjack rules have been slightly modified (re-written) compared to normal European blackjack. For example natural suited blackjacks pay 2 to 1 instead of 1.5 to 1, Any five card 21 automatically pays 2-1, pairs of aces cannot be split, all other pairs can be split, including 4s, 5s, and 10s, only one split is allowed, doubling is allowed on 8, 9, 10 and 11, including "soft" 18s, 19s, 20s and 21s, and insurance can be taken any time the dealer shows an ace, no matter what cards the player holds.The games offered in the Zero lounge are blackjack
Blackjack
Blackjack, also known as Twenty-one or Vingt-et-un , is the most widely played casino banking game in the world...
, roulette
Roulette
Roulette is a casino game named after a French diminutive for little wheel. In the game, players may choose to place bets on either a single number or a range of numbers, the colors red or black, or whether the number is odd or even....
, baccarat
Baccarat
Baccarat is a card game, played at casinos and by gamblers. It is believed to have been introduced into France from Italy during the reign of King Charles VIII , and it is similar to Faro and Basset...
, Jacks or better
Video poker
Video poker is a casino game based on five-card draw poker. It is played on a computerized console similar in size to a slot machine.-History:...
and Crazy Eights
Crazy Eights
Crazy Eights is a shedding-type card game for two to seven players. The object of the game is to be the first to get rid of all the player's cards to a discard pile. The game is considered a pre-extension of Switch and Mau Mau, much favoured in schools during the 1970s.A standard 52-card deck is...
.
Tradefair
Launched in November 2008, Tradefair offers financial betting and trading. Tradefair currently offers Tradefair Spreads, which is a financial spreads betting product. Customers can speculate on the movement of stocks and shares without using a stockbroker, and therefore using Tradefair does not require a commission payment.An earlier product, HiLo was closed down in 2009.
Betfair Arcade
In September 2008, Betfair launched Betfair Arcade, a series of easy-to-play games, including MonopolyMonopoly
A monopoly exists when a specific person or enterprise is the only supplier of a particular commodity...
, Cluedo
Cluedo
Cluedo is a popular murder/mystery-themed deduction board game originally published by Waddingtons in Leeds, England in 1949. It was devised by Anthony E. Pratt, a solicitor's clerk from Birmingham, England. It is now published by the United States game and toy company Hasbro, which acquired its U.S...
and Deal or No Deal
Deal or No Deal
Deal or No Deal is the name of several closely related television game shows, the first of which was the Dutch Miljoenenjacht produced by Dutch producer Endemol. It is played with up to 26 cases with certain sums of money...
.
Cash 4 Clubs
Cash 4 Clubs is a sports funding scheme set up and funded by Betfair. The scheme provides sports grants to local community sports clubs.Betfair Mobile
Betfair Mobile was introduced in 2007 to allow users who are away from their PC to login to their Betfair account, view markets and place bets.Further reading
- Bowers, Simon. "Betfair steps in to bail out punters". The GuardianThe GuardianThe Guardian, formerly known as The Manchester Guardian , is a British national daily newspaper in the Berliner format...
. 17 November 2004. Accessed 1 July 2011. - "How betting online began: An easy birth". The EconomistThe EconomistThe Economist is an English-language weekly news and international affairs publication owned by The Economist Newspaper Ltd. and edited in offices in the City of Westminster, London, England. Continuous publication began under founder James Wilson in September 1843...
. 16 July 2009. Accessed 1 July 2011. - Goodley, Simon. "Betfair to buy back £50m shares months after its flotation". The GuardianThe GuardianThe Guardian, formerly known as The Manchester Guardian , is a British national daily newspaper in the Berliner format...
. 29 June 2011. Accessed 1 July 2011.