When publishing its results for the year ended 30 April 2007, Betfair said that it was in a “-Very strong cash position with 180m stg of corporate funds at the year end in addition to 174m of client funds held on trust in seperate ring fenced accounts.”- 174m sitting in a bank for a year, would, with an interest rate of 5.5% yield 9.6m. A radical thought, I know, but isn’-t it time that the company began to pay interest to those that have money on deposit with it?
A second interesting aspect of Betfair’-s recent results, concerned its disclosure that Timeform, which it acquired at the end of November 2006, for around ?15m, had “-made a small loss in its first five months of trading after acquisition.”- There are grounds for questioning the strategic viability of this acquisition, but perhaps what is most interesting, is the fact that Betfair is not exploiting a rich vein of content that is parked on its own servers.
Betfair is sitting on the most comprehensive database of information pertaining to the workings of the horse racing and sports betting markets ever compiled. Rather than give snippets of this information to some fat cat academic, who will then publish it in a weighty tome, priced well beyond the reach of the average punter, Betfair should release as much of it as is feasibly possible to the betting public.
Such an act would serve to give credence to the company’-s claim that is has revolutionised the betting industry. Failure to do so, may leave it open to the charge that such information is being exploited by its employees, at the expense of the average punter in the street.
As a company that has consistently positioned itself as a radical alternative to traditional bookmakers, Betfair seems somewhat shy when it comes to disclosing which of said bookmakers, use it’-s exchange as a hedging mechanism. It was recently alleged, for example, that Interactive Gaming Holdings, the owner of PremierBet and Heathorns, went to the wall owing Betfair the sum of 250K. And IG Index recently said that its sport business achieved revenue growth of 37%, to ?6m, with a component of this growth being their new business of market making into the betting exchanges- with revenue for the six months to 30 November 2006 coming in at ?650,000. Those that trade on Betfair are entitled to know who it is they are competing with – Time for full disclosure.
A final point concerns situations where betting markets are suspended due to fradulent activity. Is it right that Betfair should benefit from such markets, through the holding on to commission that it has earned on the market?
Four simple points- interest payments on all deposits- the opening up of its databases- the disclosure of all betting and spread betting companies that use its exchange- the return of commission that has been earned on fradulent markets. If Betfair does not implement them, then its competitors should.
[Cross-posted from Betting Market]