About the new bet-matching logic:
It’s not clear why you believe that the majority of those customers who use Betfair’s forum are unhappy about the introduction of the improved matching logic. The sport this will most significantly benefit is football [soccer], and there’s nothing we’ve heard from our football customers that would suggest they’re unhappy, nor would we expect there to be. Even the thread you refer to has a mix of opinion. We don’t prevent customers posting negative opinions about Betfair (as long as they stay within the forum rules) as you can clearly see from reading the forum, even when the criticism is unfounded. But that does mean that the overall sentiment expressed on the forum is frequently unrepresentative: only a tiny minority of Betfair’s customers post on the forum, and it’s unrealistic to expect that customers would feel motivated to post to say that they’re very happy.
We expect no deterioration in site performance and the consequences of placing a bet in error are the same as if we had more customers placing more bets on a market – you’d be more likely to get a bet matched than to be unmatched, and you’d expect a better price overall. If you were right then that would imply that more customers active in a market is a bad thing (because if you place a bet in error you’re more likely to get matched than to have a chance to cancel). That’s clearly equally incorrect. We expect this to be a benefit to customers overall, even if that’s not obvious to all now. If we get things wrong customers vote with their feet, so we always question whether we can do things better, and if we conclude any change isn’t having the desired effect we’re never too proud to reconsider.
About payments made to the U.K. horse racing industry:
Betfair pays the exact same percentage of our gross profits in levy all other UK betting operators – 10% of gross profits on British horseracing. For the levy year just ended we paid just over £6.9m in levy. So, we agree that we pay our fair share! We don’t believe there is any rational justification to impose an extra charge on Betfair or on our customers. The Treasury conducted an 18 month review (announced by Gordon Brown in the 2004 Budget) into ‘the tax treatment of exchanges and their customers’. The conclusion to that review was ‘no change’. Had there been a justification for imposing a betting duty charge (which the levy traditionally follows) over and above what other betting operators are required to pay, I think we can assume the Treasury would not have passed up the opportunity to increase their tax take.
We don’t believe there is a realistic prospect of Betfair being obliged to pay more because we don’t think we (or our customers) will be singled out for discriminatory treatment, despite what some people would like to happen. On the basis that we won’t be hit by an increased charge, we will have no need to pass on something to customers and/or go off-shore.
