Games - Betfair

	Games - Betfair

Betfair is the world's leading Internet betting exchange. It is based in the borough of Hammersmith and Fulham in London, England.

History

Betfair was launched in June 2000 and has become the largest online betting company in the UK and the largest bet exchange in the world. Betfair currently has over 100,000 clients and a turnover in excess of £50m/week.

A bet exchange allows punters (gamblers) to back and lay at odds set and requested by other punters rather than by a bookmaker. Betfair uses decimal odds, which are easier to work with for trading than fractional odds. Its bookmaking model - bringing together two counterparties with opposing views - removes the need for a bookmaker's markup or overround and this results in odds that are on average 20% better than bookmakers, according to the site's operators. Betfair punters are able to offer odds based on their own opinion rather than on a set bookmakers' margin. Betfair charges a commission on all winning bets - this is set at 5% of the net winnings for most markets although it is possible to earn discounts.

The company has attracted much comment in the British and Australian press. Its co-founders - Andrew Black and Ed Wray - won the Ernst and Young Emerging Entrepreneur of the Year award. More recently the company was recognised by the Department of Trade & Industry when it was given a Queen's Award, the most prestigious business award in the UK.

In October 2005 the 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. The deal will see Tasmania receive AU$5 million up front and is projected to pay Tasmania about $40 million per year. Now it has been approved by the Tasmanian Parliament it will be the second licence Betfair has received outside the UK - the first being in Malta. The deal has infuriated the established monopolistic totalisers and bookmakers (due to loss of revenue) and governments (due to loss of taxes) in the other Australian states. Bans on bet exchanges exist or are proposed throughout Australia.

On February 28th 2006 Betfair launched a new interface, including current live scores in in-play Soccer matches, Jockey silks and Horse form, and an express view in which only the currently available Back odds are viewable. The changes were critised on the Betfair forums by many members who disliked the smaller fonts, right-alligned columns, incorrect suspension information and other errors. On March 1st 2006 many of the problems were fixed while some outstanding issues still annoyed many users who feel the site was dumbed down in order to attract new punters to the exchanges.

Controversy

The fact that gamblers can now lay outcomes on the exchanges has caused tremendous criticism from traditional bookmakers with much of the anger coming from the UK's "Big Three" - Coral, Ladbrokes and William Hill. These firms argue that granting who they consider to be anonymous punters the ability to bet that an outcome will not happen is causing corruption in sports such as horse racing (since it is much easier to ensure a horse will lose a race, the bookmakers reason).

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 well 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 agreements with governing bodies of sport including the Jockey Club, with whom they insist they will co-operate with fully if the latter suspects corruption to have taken place.

In the summer of 2004, Betfair provided data to investigators, including the City of London Police which on September 1 led to 16 arrests on charges related to race fixing. Among those arrested was champion jockey Kieren Fallon, whose case remains before the courts as of this writing.

Betfair outside the United Kingdom

Although the bulk of its customer base is in the U.K., Betfair offers its services in a number of countries. Betfair currently does not accept customers and/or credit card numbers from the United States, where online gambling is legally proscribed. Being the leading bet exchange, Betfair has been reluctant to entangle itself in legal trouble and has thus turned away business from countries where its services are prohibited.

[ Visit the complete Wikipedia entry for Betfair ]

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