||A major contributor to this article appears to have a close connection with its subject. (November 2014)|
||This article lends undue weight to certain ideas, incidents, or controversies. (November 2014)|
|Traded as||LSE: BET|
|Genre||Betting exchange and bookmaker|
|Founder||Andrew Black and Edward Wray|
|Headquarters||London, United Kingdom|
|Gerald Corbett, (Chairman)
Breon Corcoran, (CEO)
|Revenue||£387.0 million (2013)|
|£(69.0) million (2013)|
|£(45.2) million (2013)|
Betfair Group plc is the world's largest Internet betting exchange. The company`s headquarters is based in Hammersmith in West London, England. In 2011 Betfair became registered and licensed in Gibraltar; since 9 March 2011 its betting exchange operated under an offshore licence.
- 1 History
- 2 Operations
- 3 Chief executive officers
- 4 Controversies
- 5 Awards
- 6 References
- 7 Further reading
- 8 External links
The company was founded in 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.
In August 2014, Net Entertainment NE AB entered into a partnership with Betfair to expand its reach into the UK market.
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 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.
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. 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."
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 licenced providor of online gaming products. 
On 7 April 2014 Betfair launched its betfair exchange in Italy.
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, with Betfair successfully claiming 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).
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. The stake was valued at just £5.5m.
Chief executive officers
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 2006 Chief Technology Officer David Yu was appointed Chief executive officer of Betfair. In December 2011 after overseeing the company`s 2010 Initial public offering Yu resigned his position. Yu gave no reason other than stating that he did not wish to have his contract renewed but some obeservers speculated that the fact that the share price had fallen by 80% was a possible reason. .
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 about wagering on events televised by the satellite channel At The Races, because the "live" transmissions can be subject to a broadcast delay of up to five seconds. Betfair's Live Video service, offered on its website, typically offers lower latencies.
In 2010 the United Kingdom Gambling Commission produced an In Play Betting Issues paper.  The aim of this was to inquire into the fairness of this type of gambling. Betfair submitted a response arguing that the company's products were perfectly fair, stating that the majority of Betfair customers "have an overwhelming level of awareness of the issues specific to in running, and that there is no evidence that we are aware of that would support the suggestion that in running betting poses a greater risk of harm to vulnerable people than any other forms of gambling."
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 early 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.
The fact that wagerers can use exchanges to lay outcomes has provoked criticism from traditional bookmakers, with much of the anger coming from the UK's "Big Three" - Gala Coral Group, Ladbrokes and William Hill. Betfair has argued that the criticisms are motivated not by concern for the integrity of sport but by commercial interests. Betfair also asserts that, unlike the high street brokers, who 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 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 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 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.  Findlay had achieved fame in horseracing through his ownership of the steeplechaser Denman, winner of the 2008 Cheltenham Gold Cup. 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."
In January 2014 the 22 year old son of a Surrey police detective Daniel Dobson was arrested at the Australian Open tennis championships in Melbourne.  Dobson was held on suspicion of corrupting a sporting event after he was apprehended courtside with a concealed score signalling device sewn into his underpants. After the high profile arrest Dobson`s employer publicly unveiled himself as being 49 year old former Betfair senior computer engineer Stephen High of Sporting Data Limited.  The other directors of the company were also former senior Betfair personnel namely Martin Pendlebury and Simon Allen. High publicly stated that his employee was not in Australia to actively interfere in the matches but was there to send him live scores without the legal permission of the data rights owners Enetpulse, a subsidiary of IMG (company). High further said that he used the data to place bets against other Betfair customers who were gambling in play using normal television feeds.
High gave a radio interview to 774 ABC Melbourne in January 2014 to discuss the arrest of Dobson, as well as giving his own explanation as to what courtsiding entails. High publicly admitted that he was effectively employing Dobson to steal sports data for his syndicate.  He was also asked why Sporting Data had a relatively modest financial turnover. High responded that he chanelled the proceeds of his business into personal gambling accounts in order to avoid making tax payments to Her Majesty's Revenue and Customs.
There was much disquiet when it was revealed that the Sporting data syndicate made up 20% of Betfair`s in play tennis liquidity. It also transpired that High himself worked closely with Betfair founder Andrew Black (gambling entrepreneur).  Black said that High was the man who implemented his ideas and made them functional on the website.
In March 2014 the Australian prosecutor announced that the charge against Dobson that he had been illegally relaying information from the Australian Open for the possible benefit of bettors elsewhere was to be dropped.  Afterwards the Victorian Responsible Gambling Foundation issued a factsheet in which they stated that courtsiding was clearly a criminal offence under the Australian Crime Act 1958 as amended by Victoria (Australia) in June 2011. 
Subsequently Stephen High gave an interview to a journalist along with Sporting Data chief courtsider Richard Coughlan in which he said that he had stopped betting on tennis to concentrate on horseracing and soccer. He also said that he was developing a new betting model based upon the psychological performance of asian sportsmen and women.  Coughlan stated that he had himself retired from courtsiding in the interview “Oh, I loved it,” Coughlan, 27, said of his courtsiding job, which paid an annual salary of about 40,000 pounds ($67,000). “I’d love to still be doing it now.” High also admitted that his Sporting Data betting operations had been successful in 2013. "We broke a million” pounds ($1.7 million) last year, though that was before expenses on courtsiders and Betfair charges." 
Winning bets voided
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.  Betfair claimed that the bet, which resulted in a maximum liability of close to £600M, was caused by a "technical glitch" and there was only £1,000 in the customer's account. Betfair did not reveal the identity of the alleged customer or any details about his betting habits or account exposure, leading to speculation in the media that Betfair themselves are active in their own markets as proprietary traders. 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.
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.
Betfair founders Black and Wray received 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.
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.
- Preliminary Results 2013
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- O'Hare, Sean. "Betfair moves operations to Gibraltar". The Daily Telegraph. 9 March 2011. Retrieved 5 May 2011.
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- "Timeform Radio launches". 1 October 2008. Retrieved 8 April 2012.
- "Industry Awaits Betfair Plans for TVG". bloodhorse.com. Retrieved 8 April 2009.
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- Telegraph, http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/9278087/Betfair-to-launch-fixed-odds-betting-website.html
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- parte lunedì 7 aprile ora è ufficiale, http://bettingexchangeitalia.net/
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- "Racing: ATR dismisses the time delay with SIS as a 'non-issue'. - Free Online Library". Thefreelibrary.com. 6 March 2006. Retrieved 28 December 2011.
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- Official website
- Official Australian website
- Betfair Frequently Asked Questions
- l Betfair mobile app for professional exchange users