[an error occurred while processing this directive]
BBC News
watch One-Minute World News
Last Updated: Tuesday, 4 July 2006, 14:49 GMT 15:49 UK
Betfair thrives in online betting boom
By Michael Dempsey
Business reporter, BBC News

A hand operating a mouse
Online gambling is enjoying massive growth

While ex-champion jockey Kieren Fallon faces charges of conspiracy to defraud, his court case has focused attention on the wildly popular world of online gambling.

The inquiry into Mr Fallon and seven others stems from alleged irregular betting patterns spotted on Betfair, an online betting exchange.

Betfair is one of the most prominent players in a UK online gambling industry that made 5.2bn in 2005.

It was founded in 2000 by Andrew Black, who developed the internet betting exchange on his own laptop in his spare time.

Today the company employs nearly 1,000 staff and has 800,000 registered customers worldwide.

While a traditional betting shop sets its own odds, Betfair allows customers to bet against odds set by other gamblers. So one person can place odds on the site and see if other customers are attracted to the wager.

Hi-tech power

The money placed on the bet is held in a Betfair account, and other customers can decide whether to accept the odds or ask for different odds. Betfair takes a percentage of the winnings.

Former champion jockey Kieren Fallon
Ex-champion jockey Fallon faces charges

The online gambling model has allowed new types of betting. Traditional betting shops suspend odds the moment a sporting event begins.

Betfair allows customers to place bets as they take place. This means odds can change during a Grand Prix motor race or Olympic 100 metres sprint.

Four million people now gamble online in the UK every month. Technology is the key to their participation. At Betfair, half of the staff are busy maintaining the computers that allow customers to place up to 12,000 bets per minute.

This hi-tech approach is also what enables rapid monitoring of betting patterns. The company has agreements with bodies such as the Football Association or the Association of Tennis Professionals. Betfair retains the right to provide account information to official regulators.

"Integrity and transparency are crucial in any sport," says Jack Houghton of Betfair. "Our technology enables us to provide regulatory bodies with the information to achieve this transparency and integrity."

New law

Online gambling is forecast to grow by 22% this year. With huge sums of money washing around the internet, Betfair is believed to have taken 1bn of bets on the World Cup alone.

The scale of growth in online betting was one of the driving forces behind the Gambling Act, which comes into force in 2007. The Gambling Commission is the new regulatory body for the industry.

"Online gambling is burgeoning. The percentage of people who gamble on the internet has more than doubled in the last five years, and we expect this trend to continue," says Jo O'Driscoll of the Gambling Commission.

Not everyone is happy about the internet betting boom. Online exchanges such as Betfair have been blamed for a huge increase in gambling addiction.

Whatever the outcome of the charges against Mr Fallon, online gambling will grow. The technology-driven methods of the online betting pioneers have changed the way the British place their bets.

Betfair is capable of opening up a market on anything people are willing to bet on. The current summer heatwave has attracted 2,000 wagers on the highest temperature to be recorded on the UK mainland.

Fallon barred from British racing
03 Jul 06 |  Horse Racing

The BBC is not responsible for the content of external internet sites

Has China's housing bubble burst?
How the world's oldest clove tree defied an empire
Why Royal Ballet principal Sergei Polunin quit


Americas Africa Europe Middle East South Asia Asia Pacific