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Vicky Nolan

Q & A: Andrew Black

23 March 2001

While the likes of Britain's "Big Three" bookmakers--William Hill, Ladbrokes and Coral--have had little to worry about in terms of competition, a relatively new person-to-person betting service in June 2000 came onto the scene by staging a mock funeral for bookies. Their cheeky message: "Kiss that old bookie goodbye, 'cause you won't need him anymore thanks to our bookie-free betting site!" Betfair has maintained that no-holds barred attitude and has also managed to attract a substantial number of customers to its unique betting platform. A few weeks ago IGN got to know the personalities behind that attitude, along with a feel for how Betfair works, through the following interview with Andrew Black.

Betfair: Of all the betting platforms you will find, ours is probably the most complicated one. It works very similar to a stock exchange, something like the New York Stock Exchange--that would be the classic model. If you understand the NYSE, then you would understand our website.

Basically, we have two types of bets, we're probably going to bring on a third, but we haven't done so yet. We do odds bets and we do line bets. An odds bet is very much the British standard type of bet, and a line bet is more the American style of bet.

What happens on Betfair is that punters come in and they say, "Stuff that 3-1 on Britain winning, I'll give you 5-1 or 10-1." So, what is happening on Betfair, what is really exciting for the punter, is that the odds are much, much bigger. You get much better odds by betting on Betfair than you get in traditional betting.

So, a) they get really good prices and b) they get those prices in decent size. They get better betting value from us than they do from other people. It's a pure value proposition.

We definitely give better value than all the other bookmakers. That's because there is no overhead to our book system. At the moment we are, I believe, doing considerably better than all of the other person-to-person sites. The value on our site is genuinely better than they can offer in the size in which we can offer.

IGN:How does your betting platform differ from your competitors?

Betfair: Virtually all of the others are similar to each other. We are the only one which is truly different.

When we launched there were about four companies that launched at the same time. There were ourselves, Flutter, a company called Betmart and a company called Betswap. We were different to the other three. Flutter, Betmart and Betswap all have the same model, the same design.

Basically, they were billboards where people post up prices and other people take them. We aggregate and we order, so we force the bet's execution. Whereas they allow people to come in and see what they like on what is just great big matches board. It's a sort of glorified matches board, while ours is an actual exchange mechanism. We are quite different and the others are quite similar.

IGN: Who did your software, front and back end?

Betfair: We did. Actually, most of the work we've done has been on the back end. We specifically have a company that does the work, mainly the graphics, for the front end.

IGN: So your company has been doing well since its launch last year?

Betfair: Yes, our volume has been going up and up. We've experienced substantial growth from month to month. It's about a 38 percent growth rate from month to month.

We now match about a half million pounds in bets each week.

IGN: How do you charge customers for using your site?

Betfair: We now charge punters a percentage of the winning portion of the bet. We charge it specifically on the winnings only, and we charge it over the whole bet rather than on the per. It's five percent commission on net winning. Most people charge on stakes. We are about 2.1 percent of stake. The winner pays for the bet.

IGN: What are some of your future plans?

Betfair: Well, we'll be a little bit tight-lipped. First of all, we have two types of betting--we have odds betting and we have line betting. The line bets will become more Asian line-orientated and we will introduce spread betting.

The site. . . generally speaking, we need to continue to improve in a variety of different ways. We need to consider very seriously how we are going to expand internationally.

IGN: And right now you're taking bets from U.K. residents and who else?

Betfair: Pretty much all Europeans, Australia, and New Zealand. We are proactively expanding.

IGN: Will you be adding languages to your site?

Betfair: Quite possibly; I would say probably. As to when, the other things come first. Also if we're going to stretch much further abroad, we might have to look quite hard at our hardware structure and also at our posting setups, to see whether we'll have to add various bits and pieces to our databases. So, there's quite a lot of work to be done in going international in an aggressive way.

A proper international effort requires quite a lot of work and we're looking at that. We're also looking at expansion into other media and we've been looking at that quite a long time.

We haven't got product in either of those (iTV or wireless). We haven't made any decision yet. We haven't struck any deal yet for it.

Q & A: Andrew Black is republished from
Vicky Nolan
Vicky Nolan