Betfairs Liability in relation to its software failing

As somebody who likes to &#8220-back and lay&#8221- on UK horse racing, I was more than annoyed, when having placed a bet on a UK horse race, Betfair&#8217-s software malfunctioned, meaning that I was unable to lay off my bet as was my intention.

To those of us that engage in backing and laying, the result of the race is irrelevant- we are trading on price movements and price movements alone.  It was my belief (mistaken) that the contract that I had entered into with Betfair, would ensure that at all times Betfair would provide me with the means to back and lay, and that where it was unable to do so, the company would rule that as a proper market had not been formed on the race, my bet would be declared void, and my stake monies would be returned.

Alas, this was not so, as the following reply from Betfair makes clear-

&#8220-As the site was not available to any customers between 2 &#8211- 4pm, no bets were placed during this time and as this was due to matters beyond our control, our terms and conditions (11.3) state that:

We are not liable for the failure of any equipment or software howsoever caused, wherever located or administered, or whether under our direct control or not, that may prevent the operation of our betting services, impede the placing of orders for bets or the matching of bets, or prevent you from being able to contact us. In particular you should be aware that if you place a bet with the intention of subsequently placing a separate bet to reduce the liability incurred by the initial bet, there can never be a guarantee that the Exchange will be available at the point you wish to place the subsequent bet.&#8221-

As it happens, the race concerned was the 2.45 at Fontwell, which somewhat contradicts Betfair&#8217-s statement that- &#8220-As the site was not available to any customers between 2 &#8211- 4pm, no bets were placed during this time.&#8221-

That aside it would seem that I have been snared by Betfair&#8217-s all encompassing exclusion clause, to the effect that-

&#8220-In particular you should be aware that if you place a bet with the intention of subsequently placing a separate bet to reduce the liability incurred by the initial bet, there can never be a guarantee that the Exchange will be available at the point you wish to place the subsequent bet.&#8221-

I do not accept that this exclusion clause is fair or equitable, and accordingly I shall seek legal advice as to its efficacy.  In the meantime, I will no longer use my Betfair account.

Betfair are rumoured to be lining up for a 1.5bn flotation- it is a disgrace that they do not have back up servers to prevent their site from crashing.  When such an occurrence does take place, it is in Betfair&#8217-s interest to return all bets.  Betfair, the revolutionary betting company, have much to learn about the concept of goodwill.

12 thoughts on “Betfairs Liability in relation to its software failing

  1. Niall O'Connor said:

    Further; in that Betfair also operates in AUSTRALIA, why does it not run a duplicate site? Does betfair have compensation vis a vis revenue losses due to market failure.

    In that betfair is so dominant, should the gambling commission (the regulator) fine Betfair each time that its software fails? Does the gambling commission even care about the problems that arise when betfair’s software does fail?

  2. Chris F. Masse said:

    Niall, thanks for your post. To post, people should e-mail me when their draft is ready, and I press the “publish” button, once I have optimized the post for Google Search.

  3. Medemi said:

    Niall,

    lots of folks before you have lost a big chunk of their money, but Betfair welcome the commission anyway. The platform isn’t suitable for trading.

    As for the Gambling Commission, they don’t even care when Betfair’s software works…

  4. Niall O'Connor said:

    Medemi

    The point is one of regulation. If Betfair are insured for each time that their software fails, and they are unable to run complete markets on events, then, one would assue that there is little reason for them not to simplay void such markets. The 2.40 at Fontwell, was available fro five mins; then the site began to crash and ir was not possible to trade out open positions; then the site crashed.

    Betfair have now answered a number of questions I posed to them. They have accepted that this statement was flase; “As the site was not available to any customers between 2 – 4pm, no bets were placed during this time.”

    They accept that I placed a bet at 2.35; but they have no record of the fact that on five occasions I tried to lay my bet off.

    There are serious issues here, and I will pursue them. An exchange is not a fixed odds bookmakers and it needs to regulated in a different manner.

    I will expose the Gambling Commission for the fools that they are.

  5. Niall O'Connor said:

    Forgive typos; it’s late and I am trading – shorting GBP against the USD.

  6. Medemi said:

    Niall,

    >> An exchange is not a fixed odds bookmakers and it needs to regulated in a different manner.

    Betfair is a licensed bookmaker. Your bets are with them. Not many people know this, because betfair want to keep the appearance of being a P2P betting exchange. As long as it suits them.

    Betfair welcome the traders too, but when the site goes down their clients have to pay the price.

    The Gambling Commission know all this, but it seems they are in a tough position with betfair threatening to leave if the GC gives them a hard time. Interesting forces at play, IMO. But not good for the consumer.

    >> I will expose the Gambling Commission for the fools that they are.

    Good luck with that.

  7. Medemi said:

    Perhaps the conclusion should be that Betfair is nothing more than another gambling site, although some of us would like it to be more than that.

  8. Niall O'Connor said:

    Medemi

    Saying that Betfair is a bookmaker, is not only incorrect, but also lets them of the hook.

    It is through a failure in regulation that Betfair is indeed licenced as a bookmaker, but, actually, this does not make it a bookmaker. (at the very least, and most simplistic, the Betfair model ensures that Betfair itself is devoid of risk; something that does not pertain for a licenced bookmaker).

    Betfair is an exchange, and exchanges, need, have, deserve unique regulatory structures. Perhaps I could point you in the direction of this book;

    http://www.amazon.co.uk/What-Exchange-Automation-Management-Regulation/dp/0198297041/ref=sr_1_1?ie=UTF8&s=books&qid=1265278745&sr=1-1

    The fact that the UK’s gambling commission are not fit for purpose vis a vis the regulation of Betfair is the question at hand. Were Betfair to be classified as a licenced exchange, and regulated accordingly, then there would be greater protections in place for Betfair traders.

  9. Medemi said:

    >> It is through a failure in regulation that Betfair is indeed licenced as a bookmaker

    You are correct.

  10. Niall O'Connor said:

    The relationship between William Hill and the betting exchanges has not been a good one. On January 29, 2003, David Harding on the subject of Betfair’s impact on the the over-round said; “Some racecourse markets now return overrounds of only 1.2 to 1.3 per cent per runner. That is not sustainable. I cannot have a price mechanism for 50% of my business being desecrated. In a recent interview with Betview magazine Ralph Topping, Hills’ current head said of the exchanges; “‘I call Betfair the choirboys of the betting industry – “look at us we’re so innocent” – actually the exchanges are the biggest Masonic lodge there is. They’re a massive secret society where illegal gambling is taking place. What would throw a spanner in the works is if William Hill came up with an exchange model which could be offered in our betting shops or through our telephone business.”

  11. Medemi said:

    Bookmakers like Hill will close “markets” when it appears insiders are active because it will cost them money if they don’t. Exchanges don’t have that incentive. In fact, insider activity will result in increased volume and profits for betfair. They gain when punters are ripping each other off, and the irony of it is that most customers don’t care until it hits them in a big way *and* they have become aware of it.

    Even if an exchange decides to close a market and void all bets, it will result in bad publicity more often than not. So there you have a real problem that needs to be fixed by the regulator. It shouldn’t be up to the exchange because whatever they do, they can’t get it right. More so, because it is the sports industry as a whole and the average consumer, who have no involvement with betting exchanges whatsoever, who will be victimized.

    The Gambling Commission is not up for the task and betting exchanges will only be taken seriously when they are being regulated by a proper body with the necessary experience. Like the FSA.

    The public decides, in the end, but the public doesn’t seem interested. Until it is too late. So there you go again… we all get what we deserve.

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