The Betfair exchange was launched in 1999 by Andrew Black, who worked for British intelligence, and Edward Wray, who left a position as a trader at JPMorgan Chase & Co. The innovative betting exchange model it used ensured that within just a few years, Betfair had secured a significant share of the online betting market.
When it first became known that Betfair was planning on launching a fixed-odds betting site, the reaction was mixed. The betting exchange model is what differentiated Betfair from other online betting options and made it a success – so sceptics predicted that the sportsbook would be a major flop.
Instead it appears that Betfair Sportsbook has contributed to a dramatic turnaround for Betfair. The company recorded losses of £49.4 million for the financial year ending April 2013. For the year ending April 2014, its profits were a massive £61.1 million. The turnaround can be attributed to the launch of the sportsbook, which netted £36.2million in revenue, as well as to various cost-cutting initiatives.
Betfair’s initial argument that a sportsbook would prevent its existing customers from turning elsewhere for fixed odds betting is proving well founded.