Betfair - Controversy

Controversy

The fact that sports wagerers can use exchanges to lay outcomes has caused tremendous criticism from traditional bookmakers with much of the anger coming from the UK's "Big Three" - Gala Coral Group, Ladbrokes and William Hill. Betfair has led their defence by countering that while corruption is possible on any gambling platform, the bookies' arguments are motivated not by concern for the integrity of sport but by commercial interests. Betfair also asserts that unlike the high street brokers, who all accept anonymous cash bets, Betfair is aware of who their customers are. Customers are required to create personal accounts, and Betfair keeps records of each customer's betting history. Betfair in particular has noted that they have signed numerous information-sharing agreements with governing bodies around the world with whom they co-operate fully on matters if the latter suspects corruption to have taken place. The company shares information through agreements with some 30 sports bodies, such as the Lawn Tennis Association and the British Horseracing Association, and has been instrumental in several high-profile investigations into suspicious betting.

In August 2007, Betfair took the unprecedented step to void all bets following a tennis match between Martin Arguello and Nikolay Davydenko because of suspicious betting patterns. It prompted the establishment of a new investigative agency by the governing bodies of tennis.

In September 2009, the Advertising Standards Authority (ASA) banned Betfair from running two billboard adverts which claimed that their Starting Price (SP) offered 40% better returns, on average, than the industry SP. The ASA found that only 10% of the bets used by Betfair in their calculations yielded at least 40% better returns than the industry SP.

In December 2011, Betfair voided all in-running bets on a race at Leopardstown when an automated customer laid the winning horse Voler La Vedette at odds of 28-1, even as the mare crossed the finish line. Betfair claimed that the bet, which resulted in a maximum liability of close to £600M, was caused by a "technical glitch" and the customer only had £1000 in their account. The controversy was described as "devastating" by Betfair's CEO Stephen Morana and it affected at least 200 customers (backers) who were refused more than £23M in winnings. Some of these customers are believed to be pursuing their case with the independent adjudication body IBAS as Betfair no longer falls under the jurisdiction of the Gambling Commission since its move to Gibraltar in 2011.