Betfair is an online gambling company which operates the world’s largest online betting exchange. It also offers a Sportsbook (fixed odds betting), online casino, online poker and online bingo. The company’s headquarters are located in Hammersmith in West London, United Kingdom and Clonskeagh, Dublin. Since 9 March 2011, Betfair has operated its betting exchange under a Gibraltar licence.
The company was founded in June 2000, by Andrew Black and Edward Wray. 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. 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.
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. 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. In May 2012, Betfair launched a Sportsbook (fixed-odds betting) service to compete with traditional bookmakers.
In August 2014, Net Entertainment NE AB entered into a partnership with Betfair to expand its reach into the market in the United Kingdom. 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 and the enlarged entity, named Paddy Power Betfair, is based in Dublin.The merger was completed on 2 February 2016.
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Since Betfair was launched in June 2000, it has become the largest online betting company in the United Kingdom, and the largest betting exchange in the world. Betfair claims to have over 4 million customers (1.1 million active customers) and a turnover in excess of £50 million a week.As of April 2013, the company employed 1,800 people worldwide, down from 2,300 people.
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.
However, if a bettor on the web site is long term profitable Betfair will require them to pay at least 20% of gross profits in total charges and this figure may go higher.
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.
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.”
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 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.
In February 2014, Betfair were granted two online gambling licenses by the State Gambling Commission of Bulgaria.
On 7 April 2014, Betfair launched its betfair exchange in Italy.In May 2016, it launched a betting exchange in New Jersey, United States
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”.
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 March 14, 2010 but was not discovered by Betfair data security until May 20 of that year.
In play betting concerns
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.
Among the bettors on Betfair’s exchange are companies that place high-speed automated bets using predictive models. Some of these companies use courtsidingdata 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.
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.
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.
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.
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. 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). In June 2011 Betfair raised its Premium Charge to 60% for some customers, a move which was met by outrage.
Betfair 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. 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.
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.
At the disciplinairy hearing into Findlay’s lay 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 lay bets were actually made on Betfair by Findlay “associate” Glenn Gill.
Betfair themselves condemned the punishing of Findlay, saying the punishment was not “proportionate or consistent with similar offences in the past.”Findlay had previously called himself “a walking advert for Betfair.”
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