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

As for sport, administrators’ overall relationship with betting was being sorely tested by a spate of scandals that suggested the two didn’t really mix. In 1999, a plot to disable floodlights at The Valley, home to Charlton Athletic who were playing Liverpool in a Premier League match, was thwarted by police. The conspirators behind this, who sought to profit from the suspension of betting in Asia on the match – in such circumstances bets could be settled on the score when the plug was pulled – were eventually traced to Malaysia. There had been two previous instances of floodlight failure in the previous fifteen months. Plots to halt a further eight games were also uncovered, which, according to estimates, could have netted the conspirators £30 million.

Cricket, certainly perceived as a gentlemanly game – whose players have for years often taken a keen interest in horseracing to kill time waiting to bat or during rain delays – faced an even greater violation. In the early months of 2000, the game became embroiled in the biggest corruption scandal in the sport’s history when Hansie Cronje confessed to a string of payments received in return for attempted match fixing.

At the same time in Britain, horseracing’s administrators struggled to establish relationships with the betting industry’s main operators that would constitute a substantial united partnership against corruption. The two parties were engaged in an elaborate dance. Against a backdrop of apparently cordial and cooperative relations, requests for information – when wrongdoing was suspected – were largely rejected by bookmakers on the grounds of client privilege. Leave it to us, the Jockey Club would perennially be told. At least there was widespread acceptance that there might actually be an issue.

Sport in America had its own troubles with rumours of organised and extensive illegal betting on college sports. Much of this was deep underground. The authorities largely turned a blind eye, concerned more with preserving the reputation of academic institutions and national pastimes. Attitudes mirrored national sentiment about steroid use in baseball. At seemingly any cost, the game’s reputation had to be maintained.

By the start of 2000, ahead of Betfair’s launch, some rudimentary betting exchanges were already in existence – Betmart and Betswap. Indeed, Coral, the third biggest British bookmaker, was developing a site under its Eurobet banner called play2match.com. These enterprises represented an effort to formalise what had up to this point been informal person-to-person betting – individuals would fax through to small groups details of any bets that there was an interest in making and taking.

Joe Saumarez-Smith, a specialist online gaming consultant whose London offices are next to a vinyl record shop illustrating that some products can survive the most dramatic of innovations, recalls an operation based out of Luxembourg. ‘You would ring in the morning with what you were prepared to trade then later on that day before lunch the fax machine would kick in with details of what was available to trade,’ Saumarez-Smith recalls. The minimum bet was £1,000, minimum stake to lay was double that. The market was professional punter versus professional punter, in Saumarez-Smith’s view. ‘There was 3pBob, so called because he took a 3 per cent commission. Quite often you would see an Indian illegal bookmaker wanting to have, say, £100,000 on the draw in a cricket Test match. There were sometimes bets worth having on cricket, also on European football. Basically the operation served as a clearing house and was of particular interest to those betting in Britain. There was domestic tax – 8 per cent at the start of the Nineties, trimmed to 7.75 per cent in 1992, then a further point four years later – at the time. That said, not many had time to read the faxes.’

With the Internet emerging, operations like Blue Square struggled with the World Wide Web’s limitations to present themselves as an alternative to traditional gambling markets. They traded despite the Internet’s shortcomings. In the meantime, fixed odds and pool betting through what had become traditional outlets – betting shops, cafes, pubs, and clubs – dominated. As for markets most favoured by gamblers, in Britain, despite some slippage in market share, horseracing was the punters’ choice. Football’s World Cup of 1998 is often cited as being when betting on sport came of age. But back then the event nevertheless still paled into insignificance alongside the giants of the Cheltenham Festival, Grand National, and Epsom Derby, along with showcase handicaps designed for the very purpose of a wager.

In Britain, there was what at least could have been interpreted as a preface to significant change in gambling. Government discussions over changes to the regulation of the industry were underway. By this stage, the National Lottery, launched in 1994, was six years old. It had already showed how lucrative betting might be – 1,000 millionaires created, tax revenues of around 12p from every pound staked – as well as how relatively harmless a flutter seemingly was to the nation’s spiritual and moral wellbeing.

At the start of the millennium, plans for the transfer of responsibility for gambling regulation to the three-year-old Department of Culture, Media, and Sport (DCMS) were taking shape, which would bring to an end any involvement with the Home Office. This most powerful of government bodies, which took on responsibility for the licensing of betting in 1970, had historically wrestled with the Treasury, the latter acutely aware of the potential revenue streams from a more liberal approach to betting. The Home Office generally prevailed in ensuring the continued treatment of gambling as a potential social evil. But when DCMS took over gambling in 2001, the Treasury had a much less weighty adversary in creating major obstacles to the adoption of a more enlightened, contemporary approach to having a punt. The gambling industry could be groomed for development to maximise the benefits to government.

That said, traditional bookmakers in Britain offering fixed-odds betting on high streets, nationwide, had recent form to hand that suggested grounds against being anxious about any upheaval, legislative or otherwise. During the 1990s they had negotiated comfortably the arrival of spread betting – a way of gambling where you speculate on whether the outcome will be greater or less than the market, itself, predicts. For example, Kevin Pietersen walks into bat for England at cricket. Spread betting bookmakers offer his expected runs at 75 to 78. You can either sell, meaning that you win your stake times a multiple of the number of runs KP falls below the target of 75, or buy if you believe he will score more than 78, again winning the number of runs over this mark multiplied by your stake.

Having initially thought that this form of betting might pose some threat to business and profit, there was now a consensus among traditional bookmakers that it would never be anything more than a niche. Indeed, spread betting, itself, feared rather than welcomed the Internet (rightly so it proved). If the Internet did catch on, the spread betting market leaders’ technological requirements to service the complexities of what they offered clients were a great deal more daunting than for say, Ladbrokes. For Ladbrokes, for decades the biggest private betting operator in the world, and the other giants of betting, they had to contemplate the much simpler task of merely establishing an Internet presence offering the simplest form of betting, namely fixed odds.

Peter Jones, formerly chairman of the Tote, which enjoys a monopoly of pool betting in Britain, sits back in the most comfortable of easy chairs in his London flat off the King’s Road. The area’s local William Hill is well known for servicing an affluent community with a keen eye on horseracing. Nearby is Ziani’s, an Italian restaurant with a deserved reputation for hosting central figures in the sport often celebrating a success down the M4 at Ascot or off the A3 at Sandown Park and Epsom Downs.

‘Spread betting?’ Jones, Tote chairman for ten years before stepping down in 2007, recalls. ‘That probably had little impact on the established betting shop world. Any major impact it had was on telephone betting. Otherwise, up to 2000 there had been some changes to gambling in Britain but nothing of great substance since the legalisation of betting shops in the early Sixties. Live pictures in betting shops, the National Lottery, fruit machines in betting shops; these had all come in but without being the cause of a massive shake up or revolutionary change.’

So what about Betfair? Or, ahead of its launch, other betting exchanges? Jones screws up his face trying to remember when Betfair assumed any sort of relevance to him, both personally and as chairman of the Tote. A lifelong punter, who made a killing supplying data on horseracing to the great and the good before taking up one of racing’s great offices of state, he did not even open a betting account with Betfair until 2003.

A book, For the Good of Racing: the first 75 years of the Tote, published in 2004 to mark the anniversary of the pool betting operation, makes no reference to Betfair anywhere. There is nothing between the covers to infer that the next quarter-century would be an altogether different experience as a result of the idea that Andrew Black and Ed Wray were refining. Indeed, Jones cannot remember when Betfair was first mentioned at a Tote board meeting that he chaired. ‘When it was it would have been in a general discussion, in a dispassionate context rather than as a threat to Tote business or turnover.’ At the time, Tote’s annual turnover was cruising towards £2.8 billion, the figure exceeded in 2008.

‘The arrival of Betfair – and other betting exchanges; there were about two or three – was at a very low level at first,’ Jones recalls. ‘At the time, the Internet was growing. But there was no broadband at this stage. A substitute for traditional forms of betting? Back then, I didn’t think so. How could I? Bookmakers, generally, were certainly not particularly fearful of betting exchanges or Betfair. There was not going to be a takeover. Low liquidity levels at the beginning because of the number of businesses meant they made no real impact on the overall market.’ What’s more, he adds, Betfair’s software was not, to his mind, particularly good.

Jones shrugs: ‘The lack of broadband was very important. The sort of trading that would come to Betfair – churning of turnover, which is so important – was very difficult with dial-up. Not easy at all to trade. At the Tote, consensus was that with the old technology, Internet betting wasn’t going to take off. I think – and we were in no rush – we did a first deal involving broadband in, if memory serves me right, 1999 with Totalbet.’

Sitting comfortably now, having relinquished one of horseracing’s most demanding posts, publicly scrutinised to a depth disproportionate to the importance of its stake in the betting industry, Jones notes how newspapers can sometimes over react to developments. In this case, he notes that press coverage of spread betting reflected that journalists were largely excited about what ultimately never made a substantial dent in the overall betting market. Jones laughs: ‘Newspapers? In general they always like something new.’

Looking back, in 2000 Compton Hellyer had every reason to be at least satisfied at his own efforts to break into the otherwise closed market of betting. In 1992, he established the spread betting firm, Sporting Index. Ahead of the millennium, the operation was a business heading towards profits approaching £10 million, albeit marginal compared to established bookmaking. In other words, a solid foothold for a start-up company less than a decade old. With his experience, Hellyer had more reason than most to doubt that Betfair could ultimately grow to the size to which the company amounts today. Modesty to one side, why would Betfair find it any easier to break into the market than his company had?

Hellyer would cash in his holdings in Sporting Index by 2003. ‘In 2000, the view we had was that Betfair and betting exchanges would never create the liquidity – enough money in play so that the market could accommodate those who wanted to bet or lay big – they needed. That was the situation for betting exchanges, collectively, but also Betfair specifically, ahead of what became its own path of sustained growth. Betfair did at least seem likely to stick around. Others gave the impression that they might have come to the market but they would as soon go. The volume of betting needed to sustain them didn’t seem to be there.’

At least Hellyer can claim to have had some sense of what Betfair would encounter. From his own experiences, he could confidently predict if the company took any sort of hold in the market, there would be a full assault from traditional bookmakers once initial complacency about fresh competition had been replaced by paranoia that the new blood was a threat to future livelihood. He concedes that Betfair did seem to be able to drain the liquidity from others. Yet even with the credit due for correctly identifying the eventual market leader, he acknowledges that he, along with everyone, missed a trick. ‘We underestimated them and the threat to us,’ he shrugs. ‘The way it turned out – with Betfair dominant – made it worse. In truth, six or seven betting exchanges would have been less of a threat to our business. But one horse, namely Betfair, left the rest for dead.’

Relative outsiders to the business sector in which Betfair trades, do have the advantage of distance that usually affords some enhanced perspective. Still, betting exchanges like Betfair – years from such high ground as flotation – were also not exactly resonating with the wider world of commerce and venture capital, either. Andrew P. Lee is Dresdner Kleinwort’s (DK) senior analyst of trends in the world of betting. His time spent analysing this sector of the economy coincides almost exactly with the launch of Betfair in 2000. Yet, it was not until 2002, when Lee was advising potential investors on the William Hill flotation, that he recalls making any reference to Betfair and betting exchanges. By then, exchanges – or Betfair – must have had some significance as Lee was responding via the DK quarterly assessment of the leisure market to the suggestion that Betfair would cannibalise William Hill customers. He recalls predicting ‘steady growth from steady products’, overall, in betting. ‘Some were negative about the William Hill flotation on the basis that all punters are price-discriminatory and would be drawn to betting exchanges’ odds which were better because of lower overheads,’ Lee remembers. His own view then, and now; ‘Absolute nonsense.’

In 2000, no one knew how big online betting would one day be. Lee’s London offices are in Gresham Street, near St Paul’s, named after Sir Thomas Gresham who rescued the royal household’s finances in 1551. Even he might have struggled to predict the exponential growth in gaming since the millennium and Betfair’s part in this. On the pavement, Lee joins colleagues in the only space available for some calming tobacco amid jittery markets. ‘The first online casino?’ Lee, drawing on his cigarette, struggles for the date. ‘I think that was 1995. The first significant sports betting on the web followed two years later along with Paradise Poker. But without broadband none of them were making any money and poker sites had not got their heads around the jackpot tournaments on which they have built their markets. It wasn’t until 2003 that Party Poker launched the first of them that was worth seven figures.’

By virtue of his starting point in overseeing the gambling sector for clients in 2000, Lee is in synch with the timeline of Betfair’s extraordinary growth. The inevitably conservative corporate culture of the City meant possibilities for the new venture were downplayed. Unlike newspapers, as Peter Jones noted, the Square Mile is much more taken by the established order than innovation. Much more significant than a new company to Lee, in the year that Betfair was launched, was the increasingly powerful lobby for abolishing betting duty – at the time, 6.75 per cent of either stake or winnings – in Britain. ‘Bookmakers in Britain had gone through limited periods of growth. There had not been much regulatory changes to ease the market. Real hopes lay in the potential change from betting duty based on turnover to tax based on gross profits,’ Lee recalls.

When fiscal reform came, this was, Lee recalls, ultimately considered a ‘pretty exciting change to the industry’ following a relatively low stimulus – regulatory and fiscal – to betting in Britain. ‘Gambling will always under perform in growth against GDP (Gross Domestic Product) and PDI (Personal Disposable Income) if there are no regulatory changes,’ he explains. For all the excitement that a newly-born should bring, prospects of a tax review generated a much greater sense of anticipation. (Indeed, whatever Betfair’s impact, that has remained the same.)

At the forefront of the advocates for a change in the way that betting operations were taxed, with profits not turnover in the frame, was John Brown. Now a resident of Florida during Britain’s harshest months, Brown is today usually far from such concerns save for anxieties that any stocks and shares he retains in the gambling world are adversely affected by fiscal reforms. Back in 2000, he was chairman and chief executive of William Hill so very central to proceedings pressing the Treasury and Customs for a fiscal reassessment. Though charming company, his style of operating in this role was abrasive. Maybe, with the uncompromising nature of the Treasury in mind, this was Brown’s true calling. Certainly, he ensured that his case was heard.

The possibility in 2000 that the Treasury would agree to ditching tax on betting turnover – leaving more money in customers’ pockets to bet with again – and replace it with a duty on gross profits was a delight to bookmakers. Compared to the significance of betting tax reform, Brown recalls no meaningful concern about betting exchanges generally and Betfair, specifically. The relevance of the Internet to Brown, who has had his success as a racehorse owner and a gambler, in parallel with his corporate achievements, was in the impact that it could ultimately have on the domestic market through operations like Victor Chandler. Victor Chandler, whose company carries his own name, is known as something of a gentleman’s bookmaker and was once famously described as the industry’s ‘Indiana Jones’. Well ahead of the millennium, Chandler, whose grandfather established the family firm, had led a move offshore to territories beyond the reach of the domestic exchequer. In 2000, betting in Britain with bookmakers was estimated at £7 billion. What the Internet – in conjunction with the telephone – meant was a growing proportion of that trade would be offshore and therefore tax-free, with operators consequently able to undercut domestic betting with odds unencumbered with tax. ‘Victor had spotted the potential,’ Brown recalls. ‘The law then meant that he couldn’t advertise without a British arm so he kept a presence in the UK – a Mayfair betting shop – to ensure that he could maintain his profile through marketing. Then [he] shipped out to Gibraltar where he paid no tax on bets that could be taken over the telephone and the Internet.’

Ahead of the change in taxation, Ladbrokes had already followed Chandler to Gibraltar, notes Brown, testily. William Hill then followed in turn, to Ireland. ‘We at William Hill had the biggest telephone operation of them all. Never mind the Internet, we required 200-plus staff on-site just to handle calls. I had a look at Gibraltar. We also considered Madeira. Instead we set up in Southern Ireland. I had the idea one day after ringing British Airways. The person I was talking to was speaking from Kilkenny. I thought, why not us there, too? Our lawyers believed that we would not be liable for tax there – on the basis that call centres simply relayed information and there was no actual transaction. In the end, we ended up with our computers in Antigua, our administration in the Isle of Man, and our call centre manned by girls flying out from London, which cost £15 a head. In three months, we transformed what was pretty much just a cow shed.’

The decision-making was based exclusively on fiscal considerations. Brown confirms: ‘We were not concerned about betting exchanges. We were concerned with losing potentially all our telephone betting – historically about 10 per cent of the business – to competitors offering tax-free betting. It wasn’t going to affect our betting shops. Those customers, they go in their lunch hour, or between shifts. But odds-on betting by big punters – where a substantial stake is risked for a relatively small reward at a marginal rate of return that is, because it is marginal, significantly worsened by any tax take – would have to go with tax-free bookmakers. The rate of return ensured that.’

Efforts in 2000 concentrated on correcting this market anomaly yielded a result in 2001. In meetings between bookmakers and Barbara Roche (Financial Secretary to the Treasury, then a Home Office Minister of State), Brown explained the business significance – a threat to jobs and tax revenues – of the exodus offshore as tax-free betting was irresistible to the high rollers. In the March budget of 2001, the then Chancellor of the Exchequer, Gordon Brown, abolished existing duty to take effect on the following 1 January, and replaced the old system with a tax on gross profits.

At Ladbrokes, historically and by any measure Britain’s most significant bookmakers, the change in tax arrangements were as welcome as at William Hill. Domestic betting turnover increases of 70 per cent exceeded government’s expectation, a conservative 33 per cent to 50 per cent. It also exceeded William Hill’s projections, creating 1,000 extra jobs there. At Ladbrokes, John O’Reilly, today managing director of remote betting and gaming, spent little time pondering betting exchanges in principle, or Betfair, as a prospective challenger to his employer’s commanding position as the world’s biggest bookmakers. Why would you when, thanks to the Treasury’s fiscal reform of betting taxation, happy days were confidently predicted to be ahead? What’s more, that view was despite the company being perhaps more aware than William Hill of the Internet’s potential and altogether more prepared for it to become a growing proportion of total business in time. O’Reilly’s sense had been, before 2000, that Ladbrokes certainly had to develop an Internet arm and he had told his fellow board members as much. After procrastinating with the notion – to be fair, O’Reilly had been told to concentrate solely on Ladbrokes’ takeover and subsequent sale of Coral after referral to the Monopolies and Mergers Commission – he, as Ladbrokes’ then managing director of the international arm of the company, was saddled with establishing Ladbrokes.com.

Ladbrokes launched Ladbrokes.com in the same year that Betfair was launched. ‘Betfair was not the first betting exchange,’ O’Reilly recalls. This echoes common observations among those who today seek to explain as much to themselves as anyone else why they didn’t pick Betfair from the pack. O’Reilly continues: ‘There was Flutter, which seemed to be chasing the smaller punter; the one who wanted to bet on how many times a particular word, like “The”, appeared on the front page of the Daily Telegraph. What they overlooked was that someone then had to count them! At the start, a few people also thought they could be online bookmakers, taking bets.’ O’Reilly suggests that they did their money pretty quickly. He further recalls that in 1999, Ladbrokes’ domestic turnover was 85 per cent in betting shops and 15 per cent over the telephone. A decade on, he chuckles at the suggestion that Ladbrokes’ figures might be very different today if the company had set up its own betting exchange like Betfair with retail outlets in the minority compared to the web. ‘Lots since have tried and failed,’ O’Reilly points out. ‘Which doesn’t mean that Ladbrokes could not have tried, or try, and succeed. Of course, we look at everything that affects the market.’

Perhaps a sign that John Brown belatedly grasped that the world he had known for a whole life (he joined William Hill as a teenager at the shop floor in 1950s working as a tea boy) had changed is that he reputedly considered an involvement with Betdaq after leaving William Hill. This was the betting exchange set up in 2000 by the Irish financier and friend of John Magnier and J.P. McManus, Dermot Desmond, which began trading the following year. Brown was rumoured to be in line for the chairmanship, something that he has since denied.

Certainly, what has since the arrival of betting exchanges become known as ‘traditional betting’ – essentially gambling at fixed odds – had been given due warning that those who sought to develop an alternative means of gambling over the web would face few legislative or governmental obstacles. Today, government has an appetite for the positives that gambling can bring. A visit by Richard Caborn in 2006 to Gibraltar to see how The Rock had become the foundation for a thriving Internet gambling outpost and how participants could be encouraged to return home, reflected what had been at the start of the millennium beginnings of a sea change. Not long after the launch of Betfair a leaked government memo to Betfair, reported in newspapers, further underscored that Britain was ‘open for business’.

Back in 2000, Tony Blair set the tone. In a speech on 11 September following the publication a year earlier of the government’s strategy for making the UK the best environment in the world to do e-commerce, the then prime minister launched a ‘UK online’ campaign. The intention behind a raft of initiatives and investment was to get people, business, indeed the government itself, online. ‘There is a revolution going on in our economy,’ Blair maintained. ‘A fundamental change, not a dot.com fad, but a real transformation towards a knowledge economy’

The government’s intention was for Britain to become the best place in the world for e-commerce, with universal access to the Internet and all government services on the net. If you were launching an Internet endeavour that year it was reassuring to know what lay ahead. Namely, the first 600 UK online centres in some of Britain’s poorest communities offering training in how to use the Internet – but without perhaps the intention of introducing the nation’s offline constituency to the thrills of gambling’s web.

Blair, of course, did not specifically mean Betfair when he said: ‘We cannot afford to slow down. Although the UK has surged forward and is leading in some key areas, we still lag in others.’ Indeed, Betfair was underestimated from the very top down, including those running the country, according to those who follow whispers in Westminster. To begin with, Peter Oborne, the respected political commentator and documentary maker, estimates that to the Treasury and other government departments, Betfair will have seemed like ‘just another small start up that wasn’t really going to make any difference’.

Still, inadvertently, the path had been cleared for something more substantial. If Blair’s general encouragement to Internet companies was welcome, specific changes to the government machine were even more so. The pending transfer of responsibility for gambling to DCMS did ensure that past obstacles to rival betting operators taking a stake of the established market would not be so insurmountable. For largely historical reasons, the Home Office had controlled matters, to the dismay of the Treasury. ‘There, gambling faced institutional hostility,’ Oborne argues. The Rothschild Report of 1978, with the brief of assessing the business as a whole, set the tone. ‘Feckless, connections with organised crime, among other negative observations,’ Oborne recalls.

In contrast, the Treasury had long seen gambling as little more than a revenue stream if not by generating tax through betting then via new jobs that a burgeoning industry would create. And a potential transfer of responsibility for gambling to the DCMS, created in 1997, was the Treasury’s chance to assume effective control of the industry. This was finalised within a year of Betfair’s launch. ‘It was very important for the Home Office to be out the way,’ insists Oborne.

The new political framework planned for gambling – and a greater tolerance of the activity – meant Betfair could expect to be nurtured by the state, not over-regulated. With the Treasury’s assumption of effective control – as a new government department, DCMS was no match for perhaps the most formidable of power bases within any administration – gambling in Britain completed its journey to legitimacy that had started in earnest with the creation in 1994 of the National Lottery. What was once frowned upon for the temptation to individuals it represented would be considered foremost as a business.

Oborne adds that bookmakers missed a trick back then. ‘Bookmakers have always had huge political influence,’ he confides. ‘At party political conferences they are always there, wining and dining MPs. You would have expected bookmakers to crush Betfair at the start, but, like everyone else, they underestimated the threat they would pose.’

By 2000, Andrew Black and Ed Wray had spent more than a year developing Betfair. Finally, launch was upon them. Still, perhaps only Black had any real confidence of exactly what heights the pair might hope to reach.

Wray’s most rewarding bet had been in 1998 when an own goal by Scotland in the opening game of the World Cup in France gifted him a ‘few thousand’. Wray’s own assessment of the state of the betting market two years later in 2000 was far from comprehensive and actually largely inward looking. ‘I didn’t do a huge amount of technical analysis,’ he confides. ‘I did it from the perspective of creating a viable business. I tried to work out what I thought people would bet with Betfair, potentially, on average and how many we would need to make the company work. Sure, I did realise that the potential market was big. In the UK alone, there were 8,000 betting shops. And during the football World Cup of 1998 betting online had certainly begun to establish itself. Spread firms also did pretty well. So certainly the market as a whole was something interesting. But I still worked on the basis that I didn’t need to know the size of the market as a whole. I wasn’t preoccupied with market share over and above achieving that which was big enough for us to mean that if we did a half decent job we would be alright.’

Did spending an extended amount of time with Andrew Black not shape Wray’s thinking? ‘I massively underestimated the betting market’s scale and size,’ Wray admits, with a heavy sigh. He finishes this with a resigned chuckle. ‘I remember telling Bert my views on what we might need to trade and the potential for this. He laughed. “Look at me and what I bet”, he said.’

Black, having been a professional punter, knew the scale of bets that his new venture could tap. In 1992, he collected £25,500 from a win-double betting on High Low to win the Lincoln Handicap at 40-1 and Party Politics to follow up a month later in April’s Grand National at odds of 25-1. Yet, Black was also, to a large extent, thinking purely within his own world rather than about the prospect of taking a share of the betting market as a whole. Wray recalls his partner’s mindset at the time. ‘Bert simply thought, I am a punter, the bookmakers offer a shocking service,’ he laughs.

Black admits that there was an academic, almost purely intellectual side to his effort in establishing Betfair. The project as a whole, like his assessment of the betting industry as a whole, was also coloured by personal considerations. Perhaps more than garnering a better deal for punters, he had something of an eye on establishing his ‘legacy’. He recalls: ‘I decided I wanted to come up with something for myself that would have an impact. I had worked on some fairly creative stuff in my time, the most creative of all for the government and Ministry of Defence using fairly heavy mathematical simulations. I wanted to come up with something that was special. Probably Internet-based.’

Press Black on exactly what he did for the MoD and he is a little vague, either because he cannot say, or does not want to say. Whichever, he is tantalisingly remote (as only he can be). Overall, Black – seemingly on ground which allows him more freedom to engage with the public about his endeavours – considered the betting market in 2000 to be ‘dull’, with the bookmakers’ take on the Internet ‘predictable’. To Black’s mind, they simply wanted to transfer their existing business to the web. In other words, the Internet would become just a very small corner of their overall retail business. ‘They knew they had to go online but the way they did it showed their lack of imagination’, he maintains.

Black had begun by relaying to a select few that Betfair ‘was a nice idea’. When no one seemed interested, he raised the stakes, in response to meeting such indifference. ‘Then I took to saying, this is going to be a big Internet idea. The more time went on, the more outspoken I became.’ Even then, Black ultimately fell short of gauging the full impact of his baby. Moreover, even those who felt sufficiently enthralled to join Black and Wray at Betfair had limited ambition.

Would you have quit a handsomely paid, prestigious, relatively secure job to work with Black and Wray? In the spirit of person-to-person betting, what would the odds in your favour need to be? Mark Davies, a colleague of Wray’s at J.P. Morgan joined the company – at the time, ostensibly Black and Wray along with Sean Patterson, finance director – a few weeks ahead of launch as Head of Business Development. He would eventually rise to take the post of Managing Director (corporate affairs) and today, in that role, remains immersed in the operation.

Davies, whose father is the acclaimed sports commentator, Barry, was drawn to Betfair because of the concept’s simplicity more than anything. ‘Before we launched I guess I knew betting was a slightly murky world,’ Davies laughs.