You Bet: The Betfair Story and How Two Men Changed the World of Gambling

You Bet: The Betfair Story and How Two Men Changed the World of Gambling
Colin Cameron

The fascinating tale of how one company spawned a huge international business success story, created legions of new gamblers and revolutionised the worlds of gambling and sport for ever.In 2000 a company called Betfair, founded by Andrew Black and Ed Wray, began trading. Since then, the brainchild of these two contrasting English innovators has meant the world of gambling, sport, the Internet, government attitudes to betting and public perceptions of what is behind a 'flutter' haven't been the same.Betfair is an Internet betting exchange, which pairs up via the web those who want to have a bet ('backers') with those who want to take one ('layers'), cutting out the traditional middleman, namely the bookmaker. The company's success - Betfair today is one of the world's ten biggest companies operating on the web - has fuelled exponential growth in Internet betting. What's more, the operation has revolutionised the way the globe gambles, forcing bookmakers to change, altered how sport deals with corruption based around betting and how governments worldwide treat betting, and caused shifts in cultural and social attitudes to betting generally.You Bet considers the Betfair story, a remarkable tale of how a simple idea tapped into the modern-day global psyche for betting and became a multi-billion dollar company. But much more than that, You Bet considers the worldwide impact, culturally and socially, of the explosion in Internet betting in which Betfair has been both an agent for change and a beneficiary of evolving attitudes to betting.This vibrant book takes you to the heart of the colourful world of betting, features a range of characters with personality and opinions in proportion and offers unique analysis of why people gamble. The book is both an inspirational - and aspirational - tale of how the dream of two men became a reality.

You Bet

The Betfair Story: How Two Men Changed the World of Gambling

Colin Cameron

To Emily and Lois

Table of Contents

Cover Page (#ueac36253-e875-5d3d-98e9-8c2559c765d9)

Title Page (#u599bbde6-0b3b-5d74-b959-7804d5169837)

Dedication (#u406f5242-eae9-58aa-86db-bd73a55abefb)

PREFACE AN INTERESTING WHEEZE (#u8db7107e-692b-54c3-ad8c-e0b7fb4c92ca)

PART ONE THE BETFAIR STORY (#ufa24ab38-8919-52cc-9f76-b975b62d1f10)

INTRODUCTION (#u2ab0eb68-91f7-5910-9aee-90981e8acb08)

Chapter ONE MILLENNIUM (#ue238c444-048e-53d4-9f23-a7a8ae0e739c)

Chapter TWO SPREAD THIN (#u1fbb92db-f384-5613-8c30-376cee9552d8)

Chapter THREE ILLUSIONS OF CONTROL (#u5e79fa5a-ba53-57d5-8ae2-d520d724f410)

Chapter FOUR YES, NO, AND YES (#litres_trial_promo)

Chapter FIVE REVERSE MOP-UP (#litres_trial_promo)

PART TWO BEYOND BETFAIR (#litres_trial_promo)

Chapter SIX SPORT E{U} = (1-P)[QU(Y+G)]+(1-P)… (#litres_trial_promo)

Chapter SEVEN BUSINESS New Eyes (#litres_trial_promo)

Chapter EIGHT GOVERNMENT Suited (#litres_trial_promo)

Chapter NINE BOOKMAKING High Net-Worth Individuals (#litres_trial_promo)

Chapter TEN SOCIETY Impossible Steps (#litres_trial_promo)

Index (#litres_trial_promo)

Acknowledgements (#litres_trial_promo)

Copyright (#litres_trial_promo)

About the Publisher (#litres_trial_promo)

PREFACE (#ulink_fc5067aa-c17f-5838-94f9-748abd347a98)

AN INTERESTING WHEEZE

During breaks from the writing of this book, any general conversation about the subject matter usually fell into two categories. On one hand plenty wanted to know how, as the subtitle of You Bet suggests, two men changed the world of gambling and in the process – and this was the real hook – became multimillionaires. Equally some others wanted to consider the ethics of setting up a company that promotes betting.

Immoral or amazing? An ‘interesting wheeze’ was one description of Betfair. After reference to the dictionary definition of ‘wheeze’ – a cunning plan – this was refined to ‘interesting concept’. As a business endeavour, Betfair is at very least that. To the more enthusiastic the company’s progress represents a breathtaking corporate tale of all-conquering growth culminating in market domination and handsome profit.

To me, the story of Betfair, which forms the first part of this book, is a compelling narrative of individuals giving up often assured and substantial incomes in return for pursuing an idea in the spirit of true entrepreneurship, of which there is currently a substantial need, worldwide. As a winner, twice, of Queen’s Awards for Enterprise, Betfair has the endorsement of the highest levels of government, and the head of state, Herself.

As for the ethics of Betfair, a negative view on the morality of person-to-person betting probably reflects a position on gambling established before the company was even launched. Moreover, if you were against the activity, in whatever form, before 2000, I would suspect your view of Internet betting of any kind is that this simply brings the unwanted vice of gambling into the home. The world of Internet betting in which Betfair sits very central makes ‘it much easier, regrettably, for enormous sums to be spent unthinkingly’, said Andrew Langdon, court recorder in the case of Bryan Benjafield. The 23-year-old book-keeper was sentenced in 2008 to five years in prison having gambled over £1 million of a Dorset construction company’s holdings with online casino websites, in all around one tenth of his employer’s annual turnover.

An old friend from university is not hostile to gambling. A bet just leaves him cold. A few years ago, when he worked in London’s financial sector, he went to Goodwood at the invitation of a City client. On each of the afternoon’s seven races he placed bets of £10 and was left pondering that even in those contests where proceedings culminated in the closest of photo finishes his heart and pulse rates hardly deviated from normal. Yet, like me, he, too, found the Betfair story intriguing, (possibly even more so than the hedge fund he ran, before quitting to embark on a degree in English, twenty years after graduating from Cambridge in the Sciences). If you have reservations of the morality in Betfair’s core endeavour, I hope that what to me is an historic story of contemporary innovation can still raise your pulse for reasons other than anger.

Of course, whatever your opinion, for consenting adults Betfair is legal. The company went to great lengths and expense to establish this. Betfair cannot be denied on those grounds the host of commendations for creating jobs and general wealth since the company’s launch in 2000. After spending many months dealing with Betfair, it is easy for me to see the basis for the civil reception – recorded in Part Two of this book – that the company received in Whitehall and at the Treasury. Betfair, itself, is, by and large, an open, up-front operation. Bar a reluctance to make available the contact details of one original investor, whom in any case I was able to source, independently, I cannot fault the accommodation I was afforded.

And bookmakers, generally? On an individual basis, and discounting that, as publicly quoted companies, there is a limit to what information could be made available to me, I equally could find little to fault the willingness with which they granted me time and co-operated in answering inquiries often implicitly critical. In my experience, if betting is a business you consider immoral, you might find objections harder to sustain when you are sitting across the table from those who make up the corporate entities with whose trade you take issue.

As well as the subject of betting in a broad sense, I write about a whole range of pleasures such as matters of style to wine and cigars. I am lucky to do so. That said, racing and betting represent, to me, a most welcoming village which, though a non-resident, I am always delighted to be received back as a guest. Likewise, neighbouring towns with interests, which touch on matters relating to Betfair and Internet gambling. The support cast of this book was largely receptive to being interviewed and forthcoming. As for those who were initially reticent, they did at least leave themselves open to persuasion. Please note that none, Betfair, bookmakers, or otherwise contributed in any way to the cost of publication.

If you are a dedicated gambler you will most likely already appreciate how the world of betting can grab you. I hope very much that this book, which should have obvious appeal, serves to give you fresh insight into a pastime that you already savour actively. Beyond this, as this is a story that involves society as a whole, if you are not predisposed to take an interest in betting or have fundamental reservations, please excuse me for suggesting you might nevertheless still want to gamble on this book proving most compelling. Why not take a punt?

COLIN CAMERON, MARCH 2009

PART ONE THE BETFAIR STORY (#ulink_a492f373-0809-51e7-a053-1e30ac9c3508)

INTRODUCTION (#ulink_367e18ad-890b-57e6-9ebe-0dcd7727e90e)

‘There was an old fellow from Ealing

Who had a peculiar feeling.

He read on the door,

Don’t spit on the floor.

So he lay down and spat on the ceiling’

‘That kind of sums up me’

– Andrew ‘Bert’ Black, creator of Betfair

Ed Wray was born in 1968. He has a thirst for all sports though he admits to no great ability at any. Comfortably over six feet tall, he often finds himself in houses where the ceiling is a general threat to his wellbeing. Andrew Black was born five years before Wray in 1963. He is passionate about horseracing. Indeed, having been taken, aged eight, to Goodwood by his father, Tony, a property developer, one imagines that he could be sustained by this alone (though he does have a near encyclopaedic knowledge of past Wimbledon winners and their paths to the final).