online gambling genre betting exchange and bookmaker founded 2000 founder andrew black and edward wray headquarters london united kingdom key people gerald corbett chairman breon corcoran ceo revenue 393.6 million 2014 1 operating income 61.6 million 2014 1 net income 51.0 million 2014 1 website betfair.com betfair group plc is the world s largest internet betting exchange . the company s headquarters are located in hammersmith in west london england . since 9 march 2011 betfair has operated its betting exchange under a gibraltar licence . it was listed on the london stock exchange until it merged with paddy power to form paddy power betfair on 2 february 2016 . contents 1 history 2 operations 2.1 overseas business 2.1.1 australia 3 chief executive officers 4 controversies 4.1 lllegal dividends 4.2 data theft 4.3 in play betting concerns 4.4 advertising 4.5 premium charge 4.6 sports integrity 4.7 winning bets voided 5 awards 6 references 7 further reading 8 external links history edit 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 . 2 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 . 3 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 . 4 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 . 5 betfair floated on the london stock exchange with a stock symbol of bet on 22 october 2010 at 13 valuing the company at 1.4 bn 2.2 bn . 6 in march 2011 the company moved some of its operations to gibraltar to reduce the amount they paid in tax . 7 in 2012 betfair launched a fixed odds betting sports betting service to compete with traditional bookmakers . 8 in august 2014 net entertainment ne ab entered into a partnership with betfair to expand its reach into the uk market . 9 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 10 and the enlarged entity named paddy power betfair is based in dublin . 11 the merger was completed on 2 february 2016 . 12 operations edit 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 . 7 as of april 2013 the company employed 1 800 people worldwide down from 2 300 people . 13 betfair claims on average 20 percent better odds than those offered by a traditional bookmaker . 14 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 . 15 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 . 16 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 . 17 cash 4 clubs is a sports funding scheme set up and funded by betfair . the scheme provides sports grants to local community sports clubs . 18 overseas business edit 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 . 19 in 2014 betfair were granted two online gambling licenses by the state gambling commission of bulgaria . 20 on 7 april 2014 betfair launched its betfair exchange in italy . 21 australia edit see also betfair pty limited v western australia in november 2005 the tasmanian government announced a deal to license betfair australia 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 . 22 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 . 23 in the 2012 high court case of betfair pty limited v racing new south wales betfair s appeal against a newly enacted fee to access new south welsh vital race field information was rejected . the court held that the relevant law would have no discriminatory or protectionist effect on interstate trade thereby complying with section 92 of the constitution of australia and that betfair had not proven that the fee would cause significant economic damage not to the extent of the appellants in castlemaine tooheys ltd v south australia . 24 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 . 25 chief executive officers edit 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 . 26 in 2006 chief technology officer david yu was appointed chief executive of betfair . in december 2011 after overseeing the company s 2010 initial public offering yu resigned his position . 27 the current ceo of the company is breon corcoran who was formerly employed by paddy power was appointed in august 2012 . 28 controversies edit lllegal dividends edit 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 . 29 data theft edit 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 3.15 m account usernames with encrypted security questions 2.9 m 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 . 30 in play betting concerns edit 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 . 31 among the bettors on betfair s exchange are companies that place high speed automated bets using predictive models . some of these companies use courtsiding data 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 . 32 advertising edit 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 . 33 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 . 34 premium charge edit 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 . 35 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 . 36 37 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 . 38 in june 2011 betfair raised its premium charge to 60 % for some customers a move which was met by outrage . 39 sports integrity edit 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