Betfair was launched in June of the year 1998 and since then has seen massive growth to become the UK’s largest on-line betting company and the largest bet exchange company in the world. Betfair can now boast over two million customers turning over a combined weekly sum of £50 million. Betfair has become a sports betting phenomenon since it’s inception. It has literally revolutionalised sports betting. Previously “punters” could back (predict to win) a selection they fancied at odds offered, now Betfair offers the opportunity to lay (predict to lose) a selection.

Betfair operates differently from a traditional bookmaker, the key difference between a high street bookmaker and Betfair is that there is no “bookie” offering odds on all outcomes with a built in percentage profit margin. The key ingredient to make Betfair different is that “gamblers” are on both sides of the transaction. As a Betfair customer you do not bet against Betfair but against another Betfair customer. Customer 1 thinks that an outcome will happen and Customer 2 thinks that an outcome will not happen. One of the customers will “back” a selection and the other will “lay” the selection. As long as the two customers agree on the odds then the transaction can happen.

Being a betting exchange means that Betfair works on the same principles as the stock exchange except that users are exchanging sports odds as oppose to share prices. There are some key benefits to using a betting exchange over a traditional high street bookmaker as follows

-Odds are generally better with an exchange. — A bookmaker builds his profit margin into the odds he offers. With Betfair this is not the case so generally the odds are more generous.

-Odds are market driven — A traditional bookmaker will alter his odds on offer to ensure that he maintains a profit margin on all outcomes, for example if he receives a substantial bet on one outcome he will reduce the odds on offer to other customers. As Betfair is an exchange the odds on offer are driven by what other users are prepared to match, therefore in theory it should act as a “perfect market”

As well as its renowned Sports markets, Betfair has opened up a number of other on-line gambling games under the Betfair brand

- Betfair Poker. — In 2005 Betfair launched it’s poker functionality by purchasing http://PokerChamps.com which boasts a large number of users and sponsors top poker player such as Peter Jepson and Sorel Mizzi

- Zero Lounge — Betfair’s Zero Lounge is revolutionary in that the there is no house advantage and that users have an equal chance of winning or losing. The Zero Lounge offers Blackjack, Rouletter, Baccarat and Crazy Nights.

- Betfair Arcade — Betfair Arcade was launched in 2008 and uniquely rewards players for regular play. Games include Monopoly and Cluedo.

- Betfair Mobile — Betfair is now available for use on suitable mobile phones, an advantage that makes trading “backing and laying at different odds” more suited to the busy man.

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