IS BETFAIR READY TO PLAY FAIR?
By Ray Paulick
Is Betfair developing a conscience? The world’s leading betting exchange, which recently dipped its toes into U.S. gambling waters with its purchase of the horse racing network and account wagering company TVG, has reportedly made a voluntary contribution to the Levy Board, the statutory group that disburses betting revenue from bookmakers, exchanges and the tote in the form of prize money for British racing.
The Guardian reported on Friday that Betfair recently made a voluntary payment of almost $2 million to the Levy Board in recognition of profits made by the exchange from clients outside of the UnIted Kingdom betting on British horse racing. The amount represents 10% of Betfair’s profits on such wagers.
Betfair has contractual obligations to the Levy Board on profits made from British punters, but this is apparently the first time the exchange made voluntary payments on gains from overseas clients betting on British racing. Betfair is based on Malta.
“We have sent a check,” Betfair spokesman Mark Davies told the Guardian, “as there is no statutory mechanism by which we can pay the levy in respect of our international business. We are doing this because we support British racing.”
That begs the question of when Betfair will begin to share its wealth with U.S. racetrack and horsemen (or , more simply,“Where’s ours?” as Australian-based pedigree consultant Byron Rogers asked when alerting me to Betfair’s voluntary payment to the Levy Board.) Though the betting exchange says it does not accept any wagers from the United States, it does offer betting on American horse racing to its international clientele. Currently, to my knowledge, Betfair does not share any profits from those bets with American racetracks or horsemen’s organizations. Negotiations have taken place between Betfair and Breeders’ Cup officials, as well as with the Thoroughbred Owners of California, but no revenue sharing deals have yet been struck.
It seems only a matter of time before American racetrack and horsemen’s organization officials link overseas wagering on American racing via Betfair to domestic contracts involving TVG.
Those who want to learn more about the relatively brief and exceedingly successful history of Betfair, a company founded in 2000 by Andrew Black and Ed Wray, might be interested in Colin Cameron’s new book: “You Bet— The Betfair Story: How Two Men Changed the World of Gambling.” Click here for details.
Copyright © 2009, The Paulick Report
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Tags: Andrew Black, betfair, betting exchange, Breeders' Cup, byron rogers, colin cameron, Ed Wray, Horse Racing, levy board, mark davies, Paulick Report, Ray Paulick, thoroughbred owners of california, You Bet the betfair Story
May 23rd, 2009 at 9:13 am
Back in 2000 when they were starting, they came to us here in North America to work with racing on exchanges and growing our racing to new markets, with this new idea they had. Everyone (in racings usual non-forward thinking way) showed them the door and called them a name or two on the way out.
I guess the answer to your question Ray, “Is Betfair ready to play fair”, is yes. They were ready to play fair 9 years ago, but we weren’t.
May 23rd, 2009 at 9:50 am
Adopting Betfair-type markets in the U.S. is the biggest single step that the industry could take. As usual, heads have been buried in the sand, but a few of the important industry leaders are beginning to see the light…
May 23rd, 2009 at 10:50 am
Now this, not a subsidy from the government, could grow racing.
May 24th, 2009 at 4:21 pm
I remember chatting to a senior exec from Betfair at a conference and after a few beers he said the only potential competitor they fear is the US government. They are that dominant.
Either way, racing should be funded directly from betting, whoever is dominant.
June 2nd, 2009 at 2:50 pm
Betfair have been very clever here.
They have set the tone for how they want to pay. Almost all regulators want betting exchanges and bookmakers to pay 1.5% of turnover but Betfair want to pay 10% of gross profits (there is a huge difference between the two and how it funds racing).
By sending the check, and presumably the Levy Board cashing it, Betfair have established how they want to play ball in England and in the rest of the world. We live in interesting times.
June 16th, 2009 at 6:33 am
After writing a quality post like that, I can’t to anything but comment!