FAQ's

 Frequently Asked Questions

Please find below some frequently asked questions about Betfair and betting exchanges.


BACKGROUND INFORMATION:

Q: Who owns Betfair?

A: Betfair Pty Limited is an Australian registered company which is a 50:50 joint venture between The Sporting Exchange Limited (a UK registered company and owner of Betfair Limited) and Crown Limited. Betfair Limited (UK) is a privately held company.

Q: When did Betfair begin operating in Australia?

A: Betfair was issued with a licence by the Tasmanian Gaming Commission on 7 February 2006. The licence runs for a period of 5 years. It was the first betting exchange licence issued in Australia.

Q: What is a betting exchange?

A: A betting exchange is a wagering operator that “matches” punters with directly opposing views on the outcome of a particular event or race. It operates in a manner resembling a stock market in that a punter can either back (i.e. buy) or lay (i.e. sell) an outcome on a race or event.

Q: What is Laying?

A: Laying a bet means you are betting on something not to happen – e.g. a match not to end in a draw, a horse not to come in first, a rugby team not to win by over 7.5 pts etc. You can only lay an outcome if someone else is willing to take the opposing view (i.e. bet that the same outcome will happen). So if the odds of Hawthorn winning the AFL grand final are $7.00 and you don’t think they’ll win, you are risking $6.00 to win someone else’s $1.00. Conversely, the other person is risking $1.00 to win your $6.00 if Hawthorn does win.


BUSINESS METRICS:

Q: How does Betfair generate its revenue?

A: Betfair generates revenue by charging commission of (generally) between 2- 5% on a punter’s net winnings (i.e. profit) on a given market.

Q: Does Betfair have offices in Australia?

A: Betfair employs over 80 people in its operational centre in Hobart and a number of corporate staff in Melbourne.

Q: How many customers does Betfair have?

A: Betfair has about 10,000 active Australian customers; about 4,500 of which are active during any given week. The website matches about 12,000 bets a minute, up to 5 million a day – more than all the European stock exchanges combined. In the first year of Betfair’s Australian licence, over 50,000 overseas customers bet on Australian markets. Globally, Betfair has over 500,000 active customers.

Q: Does Betfair have a retail presence?

A: No. Betfair is an online business and does a small percentage (less than 5%) of its business over the telephone.


LAW AND TAXATION:

Q: Is Betfair legal in Australia?

A: Yes. Betfair is licensed by the Tasmanian Gaming Commission to operate a betting exchange in Australia. The licence is non-exclusive – that is, other betting exchanges may be licensed in Tasmania if they meet the Tasmanian Gaming Commission’s stringent probity and operational requirements.

All residents in Australia are permitted to place bets on all markets offered by Betfair.

Q: Is “in play betting” permitted in Australia?

A: The Interactive Gambling Act 2001 (Cth) makes it an offence for a wagering operator to permit people physically present in Australia from placing bets on a sporting event via the internet once the event has started. The Act does permit a wagering operator to accept bets once a sporting event is “in play” if the bet is placed via the telephone.

Q: Where is Betfair licensed?

A: Betfair holds a Tasmanian Gaming Licence with a betting exchange endorsement pursuant to the Gaming Control Act 1993 (Tas). In Australia, Betfair is regulated by the Tasmanian Gaming Commission.

Q: Is Betfair required to be licensed in all states and territories of Australia?

A: No. As Betfair holds a licence in Tasmania it is legally permitted to accept bets from customers throughout Australia.

Q: Does Betfair contribute funding to the racing industry?

A: Yes. As part of its licensing requirements, Betfair is required to contribute a range of taxes and product fees to the Tasmanian Government, most of which are passed on to the racing industry. The core elements of Betfair’s contributions are as follows:

  • A tax of 15% of the gross revenue that Betfair receives in respect of racing and sporting events held in Australia.
  • A product fee of 20% of the gross revenue that Betfair receives in respect of Australian racing events.

Like the TAB’s in other major Australian jurisdications, Betfair pays its taxes and product fees based on its gross profits.

Betfair also makes voluntary product fee payments to peak Australian sporting bodies, including the AFL, Cricket Australia, the NRL, Football Federation Australia, Tennis Australia and the PGA Tour of Australasia. Betfair is currently the only wagering operator in Australia to make these voluntary product fee payments.


INTEGRITY ISSUES:

Q: How can Betfair help protect the integrity of sport?

A: The use of technology allows Betfair to introduce higher standards of probity, consumer protection and integrity than is possible under cash-based systems used by TABs and traditional bookmakers. Every bet on Betfair can be tracked to a particular customer. Betfair records every detail of every bet and every click of the mouse once you are on its site. It can trace every cent in and out of the exchange, and every bet back to an end customer and an end bank account. All of this information is available to racing and sporting regulators, anti-money laundering agencies and law enforcement bodies either through the Tasmanian Gaming Commission or through Betfair directly.

Q: Who does Betfair have Product Fee and Integrity Agreements with?

A: Betfair has Product Fee and Integrity Agreements with RVL, Cricket Australia, AFL, NRL, FFA, The PGA Tour of Australasia and Tennis Australia. These agreements enable the regulators/sports bodies to gain access to customer identities and wagering information from Betfair should they ever wish to investigate betting activity on a particular race or event access. Betfair has also agreed to contribute a product fee to the sports based on the amount of wagering occurring on the respective sports.

In addition to this Betfair UK has similar information sharing agreements with the following bodies:

  • The Horseracing Regulatory Authority in the UK – June 2003
  • The ATP (men’s professional tennis tour) – September 2003
  • The Darts Regulatory Authority – December 2003
  • The International Cricket Council – January 2004
  • The FA (English soccer) – March 2004
  • The Jockey Club of South Africa – September 2004
  • The Rugby Football League (UK rugby league) – December 2004
  • UEFA (European soccer) – January 2005
  • The National Greyhound Racing Club (UK greyhounds) – January 2005
  • The Thoroughbred Racing Protective Bureau (US racing) – March 2005
  • The International Tennis Federation – October 2005
  • The Grand Slam Committee (tennis) – October 2005
  • The Lawn Tennis Association – October 2005
  • The Women’s Tennis Association – October 2005
  • The Rugby Football Union – February 2006
  • The British Darts Organisation – February 2006
  • The Belgian FA – February 2006
  • FIFA (World soccer) – May 2006
  • Racing Services Tasmania – July 2006
  • Horse Racing Ireland – August 2006
  • Football Association of Ireland (FAI) – October 2007

Q: How do you monitor betting?

A: We have a dedicated integrity team of specialists who monitor the betting patterns across all the betting markets offered by Betfair. They use a combination of software tools and experience. As the details of every bet are recorded any market can be investigated, current or historic.

Betfair now gives stewards in most States real time access to all bets placed on their races on Betfair. No other wagering operator in Australia is in a position to do this. In addition, all personal details of punters are available to stewards in Tasmania and in Victoria as a result of information sharing agreements that those States have signed with Betfair. Betfair would like to sign similar information sharing agreements in all States. The agreements are free of charge to the racing body.

Q: How does Betfair know who’s betting on the exchange?

A: Betfair knows the identity of all its customers. Betfair requires that any customer opening an account must verify their identity along the lines of the "100 point test" commonly used by financial, and other, institutions in Australia.


CONSUMER BENEFITS:

Q: What are the benefits of a betting exchange?

A: Betting exchanges offer a superior consumer proposition in terms of choice, value, and control.

  • Better choice - Better choice comes from the fact that you can ask for better odds than you’re being offered, and from the fact that you can take either side of a bet – to bet that an outcome happens (back) or doesn’t happen (lay).
  • More control - The greater control comes as a result of the greater choice and the ability to proactively manage your position on a given market i.e. you can trade yourself into a position by backing and laying that guarantees you a profit on any outcome.
  • Better value - The better prices comes as a result of the competitive market place and the fact you are betting against other punters not a bookmaker. Bookmakers have to make a profit because they have overheads, wages to pay and shareholders to please. This means that every time a bookmaker offers you odds a profit margin is built into those odds.
  • In-play betting – Betfair pioneered in-play betting. It allows you to bet, as the name suggests, while an event is in progress and right up until the end of the contest.