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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.

The business is split into two divisions, UK and 🌝 International.

UK operations are conducted from its headquarters in London, while its International business operates from its satellite offices in Ceuta, 🌝 Dublin, and Malta.

In February 2016, 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 2015 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 2016.

[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.

com, 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 🌝 for $50m.

Betfair also has a subsidiary called BetfairCasino.

com 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 2016, it launched a betting exchange in New Jersey, United States.[27]

In March 2018, 🌝 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 2021, 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]

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