Betfair

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Outcry over Betfair cricket ads, by Natasha Robinson- 27th Dec 2008
(Credit: The Australian)

The Nine Network has caused a furore for allowing online betting agency Betfair to advertise during the Boxing Day Test, with campaigners furious that the plugs -- including one by cricket legend Ritchie Benaud -- expose children and teenagers to gambling.

World Vision head Tim Costello and South Australian senator Nick Xenophon said yesterday they were shocked to see Betfair's strong presence on advertising billboards at the Melbourne Cricket Ground.

Mr Costello, who was at the MCG yesterday, said he was "very worried" about the potential for children who viewed the Betfair advertising to go home and gamble online without their parents' knowledge.

"You've got families and kids here," Mr Costello said. "Of course gambling is part of life, but I think when it's a family cultural event like the Boxing Day Test, the advertising is inappropriate."

He said he was particularly concerned at the way Benaud had quoted Betfair's odds during his commentary, broadcast live around the nation on the Nine Network yesterday morning.

"The truth is we know that gambling addiction breaks up families, causes crime and comes at a huge social cost," Mr Costello said. "When it's a family event like the cricket, when it's being broadcast live and kids are listening to it, it is overstepping the mark. It's inappropriate certainly for kids at a family event."

Senator Xenophon, who was elected as a South Australian senator at the last federal poll largely on an anti-gambling platform, described the online gambling world as the "wild west" and called on the Rudd Government to impose regulations on the broadcasters.

"Online gambling such as Betfair has the potential to deliver the next wave of problem gamblers," he said.

"There's very little regulation in relation to advertising. Gambling advertising ought to carry with it warnings, and we ought to be looking at restrictions similar to those that apply to cigarettes and alcohol."

Senator Xenophon agreed with Mr Costello that the ability for online betting agencies to advertise at the cricket threatened the Boxing Day match's family-friendly status. "It's a shame for the great game of cricket that it's been reduced to just another event to have a punt on," Senator Xenophon said. "It diminishes the great game of cricket."

Nine's publicity officer did not return calls yesterday.

Senator Xenophon said he had concerns that online betting on sporting matches could expose sports to corruption and match-fixing. A spokesman for Betfair last night declined to respond to the criticisms made by Mr Costello and Senator Xenophon, but the agency has strongly argued in the past that it has safeguards in place to guard against corruption, the risk of which is increased because punters have the chance to bet on a team's loss as well as a win.

Betfair tipped off the Australian Football Federation last week that Socceroos Kevin Muscat and Craig Moore, as well as Melbourne Victory midfielder Grant Brebner, had bet on soccer matches, in breach of regulations.

In 2000, South African captain Hansie Cronje was banned from cricket for life after admitting he took bribes from bookmakers to fix games.

And Shane Warne and Mark Waugh were fined by the Australian Cricket Board after being offered inducements to give pitch and weather reports on Australia's tour of Pakistan and Sri Lanka in 1994.

Betfair Sports Exchange

Betfair is the world's leading sports betting exchange, a concept it pioneered in 2000. All bets on Betfair are placed by users who either want to bet for a selection or outcome in the normal way (back), or bet against a selection or outcome (lay). Bets are matched between people with opposing views. Betfair is a licensed bookmaker in the UK. It also has licences in Australia, Malta, Austria and Germany.

Betfair Poker

Betfair Poker Originally launched in May 2004, Betfair Poker is one of the fastest growing poker rooms on the internet and one of the busiest online rooms in Europe. In October 2006 Betfair Poker released its new poker software, hosted on our own poker network. This means we are very lucky – we’re able to react to what our players want, so you’re really able to “Play it Your Way”. Betfair revolutionised the sports betting industry and Betfair Poker is changing the face of online poker for ever.

Betfair Casino

The only casino in the world with no house edge.

Betfair Casino offers two great casino lounges, the Zero Lounge and the Main Lounge. The Main Lounge offers a huge range of the newest and most exciting games making it one of the most diverse and best value casinos on the web. The Zero Lounge is the first casino with zero house edge on every game.

Company Overview

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

History
Since Betfair was launched in June 2000 it has become the largest online betting company in the UK and the largest bet exchange in the world. Betfair currently has over 1,000,000 clients and a turnover in excess of £50m/week.

A bet 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 uses decimal odds, which are easier to calculate with than fractional odds. Its bookmaking model brings together two counterparties with opposing views, and thus removes the need for a bookmaker's markup or overround. As a result, the odds are up to 20% better than bookmakers' odds, according to the site's operators.[citation needed] 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, which is set at 5% of the net winnings for most markets--though it is possible to earn discounts.

The company has attracted much comment in the British and Australian press. Its co-founders, Andrew Black and Edward 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 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 that 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. A ban on the use of betting exchanges took effect in Western Australia on the 29th January 2007 and possibly South Australia in the future. Betfair claims this new law violates the Constitution of Australia and filed a legal challenge which remains before the courts.

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. Within two days the 'Xpress' idea was also adopted by BETDAQ. The changes were criticised on the Betfair forums by many members who disliked the smaller fonts and the right-aligned columns, which displayed a large amount of whitespace. On March 1 these display issues were addressed, although many users still felt the site had been dumbed down in order to attract new punters to the exchanges. The gambit worked, however, with 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.

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" - Gala Coral Group, 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 fully if the latter suspects corruption to have taken place.

Criticism
Betfair handles 5,000,000 transactions every day - more than the London, New York and Tokyo Stock Exchanges combined.[citation needed] On occasions, the site has been unavailable as the company performs upgrades to the software. While these suspensions in service are often planned and announced to Betfair's customers before they are due to take place, at other times the site has been known to crash unexpectedly.

For traditional punters, a crash might be little more than an annoyance, but unexpected outages are of particular concern for the so-called traders - customers who typically bet on both sides of a proposition in an attempt to make money by capitalising on changes in the odds. Unlike most stock exchanges which charge a commission for every transaction, Betfair only charges commission on the net "winnings" which for a trader who will typically be no more than 5% of the amount "bet" - so to try and make substantial amounts of money a trader needs to commit a significant amount of capital. The bulk of a trader's capital can be protected if he "closes" any "open" position before the match/race being bet on begins. But if the website crashes shortly before the start of the race/match and the trader is unable to close his open positions, his capital will be in serious jeopardy.

Keeping the traders happy is probably very important to Betfair because they are believed to be the primary source of capital in the client accounts, which is what provides the liquidity that Betfair's competitors have not yet been able to match. Betfair have acknowledged these "unplanned outages" and attributed them to technical and hardware issues.

Betfair 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, where online gambling is legally proscribed. Being the leading betting exchange, Betfair has been reluctant to entangle itself in legal trouble and has thus turned away business from countries where its services are likely prohibited. As a result, unlike some other online gambling operations Betfair was not seriously affected when the U.S. Congress passed strict prohibitions affecting Internet gambling in late 2006.

Betfair has several thousand customers in Australia but its marketing activities are currently restricted to Tasmania, where it is licensed. Betfair is well known in Australia because of negative publicity from the racing industry and the totalizators. However, Betfair signed a landmark agreement with Racing Victoria in July 2006 which saw Betfair begin covering Victorian racing and left the exchange on decent terms with two of Australia's six states. Betfair also has agreements in place with several major spors in Austrlaiam including the Australian Football League, Cricket Australia and the PGA Tour of Australasia.

PokerChamps.com
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 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 geo-location software in 2004 to deny U.S. residents the ability to place bets on its site.

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. Bad players, (e.g. 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, Roulette, Baccarat and Jacks or Better.

Betfair Australia Corporate

Betfair is the world's leading betting exchange, a concept it pioneered.

All bets on Betfair are placed there by users who either want to bet for a selection or outcome in the normal way (back), or bet against a selection or outcome (lay). Bets are matched between people with opposing views.

Betfair is a licensed bookmaker in the UK. It also has licences in Australia, Malta, Austria and Germany.

Why Betfair?

Betfair offers you unprecedented choice, value and control.

* You can bet that an outcome will happen (back) or that it won't happen (lay).
* You can choose the odds you want to play at.
* You can bet whilst the game is in play.

How do I use the Exchange?

When you "back" a selection (be it an individual, a team, horse, dog or other), you are betting that it will win. This is just like betting with a conventional bookie.

When you "lay" it, you are betting against it winning. For example, if you're betting in a market on which team is going to win the Premiership and you lay Sydney Swans, you offer odds to other punters who wish to back Sydney Swans. If Sydney Swans don't win, then you pick up the backer's stake. If Sydney Swans wins, then you pay out. This is what bookmakers traditionally do.

Although Betfair knows who is on each side of every bet matched through the exchange, you never know who you are betting against. Your privacy and the confidentiality of your bets is maintained by Betfair's secure site.

Choose your odds

If you want better odds than are currently available, you can place an order for a better price, but be realistic because there has to be somebody prepared to lay the bet at those odds, and vice versa.

Take a look at the odds before an event and you will see them change as Betfair members back and lay their bets. The odds often improve nearer to the off as the number of people in the market increases.

Betfair is licensed by the Tasmanian Gaming Commission.

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