History and Founder of Betfair

Updated: 15.08.2025

Betfair.com is one of the most exceptional gambling sites on the Internet. It's a unique online betting site. We'll get into the biographies of the founders and the company in a moment. But first, let's look at the founding concept. (If you're familiar with betting exchanges, you can skip ahead).

The Basics of Betfair Exchange Betting

Betfair is a peer-to-peer betting exchange where, instead of betting with a bookmaker, players place unique, personalized bets against each other in a marketplace that resembles stock trading. Users can choose bets that express optimism (called "back") or pessimism (called "lay"). Below is a screenshot of the game day menu for a soccer match between Bayern Munich and Chelsea.

Remember, this is an exchange, not a bookmaker. At Betfair you only bet to the extent that others (in total) have placed bets. You only bet to the extent that others (in total) have bet back.

For example, consider a lay bet on Chelsea at odds of 4.9: these are the odds we are giving to the other side. In other words, we are giving someone else 4.9 to 1. To win $338, we have to risk 3.9 times that amount, or $1318.2, because we are effectively getting 1.2564 odds ourselves.

Suppose we want to bet a larger amount, such as "win $1000", while still keeping the odds less than or equal to 4.9. Referring to the image in front of us, the first "Win $338" would be covered, and there would still be an unmatched bet of "Win $662" as part of our original pending bet. If we chain our bets so that one of them is contingent on either the first or second portion of the previous bet being matched, the unmatched portion of the second bet goes into the same scenario as above. If any part of a bet is matched at any time, it becomes a pending bet for us in the time between the match and the actual event.

The great thing about exchange betting is that it is vig-free trading. We can back Chelsea, and if the odds improve, we can back them for an instant profit (as long as it is matched). Or if we think that backing Chelsea doesn't look good, we can cut our losses and back them for a small loss. Also, most matches are in-play, so we can keep betting until the final whistle. At the end of the game, anyone who has profited from all this will have to pay a small commission, but only on net market wins.

With the basics of exchange betting explained, we can now introduce you to the founder of Betfair and learn more about their history.

Betfair Founder Andrew Black

The founder of Betfair is Andrew Black, born on 13 May 1963. The founder of Betfair is Andrew Black, born on May 13, 1963. He is, interestingly enough, the grandson of Sir Cyril Black - a Baptist who was the most vocal member of the British Conservative Party in opposing betting shops in Britain. As the story of Ladbrokes goes, Sir Cyril lost that battle against betting. In more ways than one, with his grandson's creation of Betfair, it could be said that Sir Cyril lost that battle. The founder of Betfair is now a historic figure in British gambling.

Andrew Black's success is not the result of inherited wealth. Instead, it is a success rooted in hard work and perseverance. It is a story of stumbling through a series of not-so-great jobs - like stocking shelves - that paid little, some almost nothing. It is a story of trying things out-living as a professional gambler for a while and contemplating life as a student. It also has moments of dealing with personal tragedy - caring for a brother with a brain tumor for two years before he died. And through it all, it moves to a part of Black's life that is just plain interesting: his work in software, which led both to greater success in his gambling system and to a new passion for the stock market. ***A portion of Andrew Black's fortune is used to support worthwhile causes around the world:

Andrew Black did not want to just get by; he wanted to make a name for himself, and sports betting was not going to get him there. He made the leap from a job as a trader to the world of IT, and eventually began brainstorming ideas for what would become Betfair. In the middle of all this, he suffered a huge blow to his life when his father died. Most fathers want to see their sons succeed, and I have no doubt that this was part of the motivation behind Black's drive to do something big with Betfair.

Enthused by the concept, Andrew Black began talking to anyone who would listen. Ladbrokes did, but William Hill wouldn't even let him in the door. The first serious tête-à-tête was with the Racing Post. Black explained to them how odds would fluctuate on the Internet in the future and how exchange betting was a much better model than bookmaking. He dumbed down the concept of 'back and lay' to 'buy and sell'. He hit it with all the enthusiasm he could muster and proclaimed, "Exchange betting! Someday somebody will do that," and he was met only with smiles. Talking to established companies was fruitless.

Things began to move in Black's direction after he attended a party thrown by his friend Jeremy Wray in the summer of 1998. At the party, Black was approached by Ed Wray, Jeremy's younger brother, who had a few words of encouragement for Black: "I hear you have an idea." Ed Wray, who also worked for JP Morgan at the time, had started out as a skeptic. He had heard a lot of pitches and was not easily impressed. But after a few hours with Black, he was sold.

Andrew Black and Ed Wray spent five months discussing their plans before seeking venture capital. This was no easy task, however, because a company called Flutter had already secured funding for the same business model. Although Black and Wray did not see Flutter as a threat, approaching potential investors was awkward and nearly impossible because many in the venture capital world had already backed their future competitors. Yet somehow, Black and Wray were able to raise over £1 million and began developing their product on a shoestring budget.

Betfair Marketing Fuels Their Success

When Andrew Black had a unique idea, he was never shy about pitching it. In fact, he sold it to everyone under the sun, which may have cost him both early venture capital and a few potential competitors who might have been better off staying in the shadows. By March 2000, Betfair wasn't up and running, while other exchanges like Betmart, Betswap, and a few others were. At this point they hired JoJo Pimrose, who had previously worked at Bloomsburg and News International. She was given 12 weeks to come up with a marketing plan for Betfair's expected launch in June 2000.

At first, Pimrose had nothing groundbreaking to offer. Her concepts were pretty much: "the eBay of betting" and "the NYSE of betting," which were not very compelling descriptions of what she was trying to get off the ground. She was so dissatisfied that she took her not-very-strong pitch to a marketing firm called Circus and paid them to make her ideas sound better.

Circus agreed to help and came up with a distinctive idea. The company would spend £20,000 on a launch party and then run a "Death to the Bookmaker" campaign. Although Ed Wray was not keen on the idea, he eventually went along with it. He and Black donned gangster outfits, set up fake bookmakers to picket the launch party, and staged a New Orleans-style funeral, complete with a coffin parading through the streets of London. The media lapped it up, producing a huge feature in the Sunday Times and several other newspapers. In addition, the Racing Post, which is extremely selective about the advertisers it accepts, approached Betfair to become a sponsor.

Bookmaker Objection Helps as Does Flutter Purchase

In the early days of Betfair, the reaction of bookmakers to betting exchanges ranged from outright dismissal to near pathological obsession. During the Euro 2000 final, one bookmaker, who doubled as a PR spokesman, said on live television that Betfair's concept was fine, but in the end, he insisted, punters would always prefer the traditional bookmaker. But as media commentators began to give more and more airtime to exchange betting, the various factions of the betting industry began to pump up an almost non-stop PR campaign of their own against Betfair.

Bookmakers protesting only drew more attention from gamblers. They'd share an enemy with us and side with us against the disreputable bookmaking industry. With the media now in a frenzy, it made sense for us to be the overt villain and for Flutter to be our superhero rival, whom we would grudgingly take over in January 2002 from the 'turning to our competitors for help' angle, which was now one that benefited from bad publicity for the betting industry.

In October 2002, Andrew Black and Edward Wray won the Ernst and Young Emerging Entrepreneur of the Year award. Betfair, the company they jointly owned, had been in business for less than five years. Betfair had also done something almost unthinkable in modern British business: it had created a truly international business that was innovative in every sense of the word.

Critics of Betfair Exchange Model

Betfair's betting exchange model isn't without its critics, especially among horse racing enthusiasts. Critics claim that Betfair's model, which allows anonymous punters to set lines, can lead to corruption. This is especially true in horse racing, where a punter can bet on a particular horse to lose. It's much easier to fix a horse race than a major sporting event. Betfair counters these critics by saying that they work closely with the horse racing industry. Because they keep records of who places what bets, they are more likely to catch corruption in the industry than a brick and mortar sports book that takes bets from anyone without any form of identification.

United States Restricted

Betfair has never accepted players from the United States. In 2004, Betfair's website was equipped with a geo-blocker that restricted access to US IP addresses. Therefore, when the Unlawful Internet Gambling Enforcement Act (UIGEA) was passed in the US in October 2006, it had no impact on Betfair's business model.

Other Products

Betfair now offers sports betting, horse racing, casino and online poker all from a single website. Betfair's casino includes a section called the Zero Lounge. Betfair's Zero Lounge features a number of online gambling games that, when played with the right strategy, are said to pay back 100% of the money wagered (although it seems unlikely that any casino could afford to do that). In blackjack, the Zero Lounge pays 2-1 on suited blackjacks and a "5 card 21", but doesn't allow splitting aces. Betfair's Casino Zero Lounge offers a 100% payback game of Baccarat, but hardly any casino game is legal to play without a strategy that reduces the house edge to 0%, or a strategy that basically ensures that you won't win anything unless you hit a straight flush, since all live dealers are required to "cipher" (read previously unreadable cards) during the game.

In 2007, Betfair launched a mobile platform. In November 2008, it launched Tradefair, which allows users to place bets on stock fluctuations throughout the day. In January 2009, Betfair acquired the TV Games (TVG) network for $50 million. (TVG is a horse racing network that broadcasts to a simulcast audience in the United States). Horse racing is an exception to the UIGEA.

Betfair Poker History

In May 2004, Betfair added poker to their gaming offerings. They joined the Cryptologic Network, which included William Hill, Interpoker and Ritz Club London. In November 2005, Betfair purchased Pokerchamps. Pokerchamps was a standalone online poker room that accepted players from the United States. You could say that Pokerchamps was Betfair's first experiment in owning and operating a real money online poker room. You could also say that Betfair was a pretty bad parent to let their first online poker subsidiary go into receivership. For a while, Betfair continued to handle the accounts of their US customers at 663-746-6908. Betfair then kicked Pokerchamps out of the US poker market due to some very shady dealings.

In December 2007, Betfair shut down PokerChamps and told all its players to sign up directly with Betfair Poker. Betfair then terminated all affiliate agreements between PokerChamps and its marketing partners. This infuriated the affiliates who had played a large role in building PokerChamps, as it meant they were being cut off from the only source of revenue they had. Being in a tunnel-like space and knowing that nothing was going to get better, the affiliates asked how it was going to be reversed. The only person who could talk to the boss was an affiliate who had been with PokerChamps since the beginning. (more on the next page)

The programming of Pokerchamps was a big problem. Complaints about the software came from all over. The program could not handle multiple tables, made too many errors, and was way too slow. It was also downhill from the programming side of things, with a poker room software level that was rumored to be too low for even Betfair to want to keep. Playing on the Pokerchamps software was like taking a step back in time to some of the earlier programming mistakes made on earlier poker room software. In July 2010, Betfair announced that they would be migrating once again, this time to the Ongame Network.

When Cryptologic was Betfair and Betfair was independent, rakeback was allowed. However, Ongame does not allow rakeback. After announcing the move to Ongame, Betfair saw a spike in signups. Then in July, Betfair migrated players to Ongame and new prospects were no longer offered rakeback.

Betfair continued to have problems even after moving to Ongame, as their software was essentially the same as PokerChamps (which has since been upgraded). To add insult to injury, in January 2011 there was an incident where the poker software stopped communicating with players' banks. Players would join poker games only to find that their money was gone. For a period of two weeks, players' funds were MIA. During much of this time, Betfair did not offer poker as they had pulled it from their schedule while they worked on the

More Befair Controversy

Betfair has remained one of the top sports betting sites for customers looking for odds, but online poker hasn't been the only product to bring dissent to the Betfair name. In the interest of fairness, we will address these other issues as well.

Happy Hour Promotion

On November 13, 2010, Betfair presented one of the most memorable bonuses to their casino players. It was a seemingly bottomless bonus that allowed players to make multiple deposits and accumulate bonus promises. And instead of shutting the whole thing down, Betfair let the promotion run for a full three hours. Then, the next morning, they decided to cancel all bonuses and make players cover their casino losses instead. They reversed all withdrawals, cancelled all pending withdrawal requests, and pretty much stopped communicating with players altogether. The decision not to pay the promised bonus was considered final by Betfair.

ASA Rulings Against Betfair

The Advertising Standards Authority (ASA) has taken Betfair to court on a number of occasions. In August 2009, the company was found by the ASA to be in breach of its codes. Betfair advertised that its starting prices for bets were 40% better than the industry standard.

A month later, Betfair faced the ASA over complaints about advertising aimed at minors. The ad, which featured Annette Obrestad, was used to attract potential customers: "Online experience is measured in games, not years. Join the new generation." Obrestad was 20 years old when she starred in the ad, and she used the handle "Annette_15" (as in her age when she first started playing online poker). The ASA's decision is interesting because it gives several reasons for finding the ad to be aimed at minors, including the serious point that no one under the age of 25 should be in a gambling ad.

In February 2011, Betfair lost further decisions from the ASA. One was about an ad claiming that Betfair cuts out the middleman when it comes to betting on sports. The ASA said, "No, you don't. You take a commission, as all good middlemen do". A few weeks later, the ASA said Betfair's Happy Hour promotion was misleading, but they refused to explain why (if you know why, you can better avoid doing it in the future). Then in March, Betfair claimed in an ad that its starting prices were 40% better than the industry standard. The ASA said this was also misleading.

The ASA rulings only increase Betfair's ability to make certain claims in the UK. They do nothing more than slightly tighten the reins on misleading advertising. The ASA doesn't deal with gambling complaints of any kind and has no power to force refunds to players who fall victim to false advertising, such as the Happy Hour promotion.

Betfair IPO

It's hard to find details about the finances of a private company, but it's known that Betfair made a profit of $1.5 million in 2002. That was just a starting point, much like the tote and casino games it offered. In the space of a year, Betfair seemed to find its core player base, and it grew that 2002 figure tenfold to around $15 million if you look at the period between 2002 and 2009. When Betfair went public on the London Stock Exchange in October 2010, those annual net revenues were in that range, and Betfair's stock jumped 20 percent from its initial offering price. Revenue growth seemed to stall after that initial boost, and then more bad news followed.

German License

In May 2012, Betfair became one of the first licensed gaming sites in Germany. This brings the total number of licensed countries to seven. The others are the United Kingdom, Malta, Australia, Gibraltar, Austria and Italy. They are currently in the process of obtaining a license from Spain, should the tax authorities there reach an agreement.

Betfair Becomes a Bookmaker

It is rather odd that a company that first found success with a "death to the bookmaker" campaign would launch a sportsbook on its .com site in 2012. The ostensible motive was to capture the 30% of its customer base that couldn't use Betfair because of the need to improve liquidity in certain markets. This goes to the heart of the fears about Betfair's business model. We used to call Betfair a near-perfect betting exchange because of its low vig and unmatched betting opportunities. The downside, however, has always been that the absence of a traditional bookmaker in many markets has hampered our ability to enjoy the near-perfect exchange. However, from May 2012, not only will Betfair's odds be even better as a sportsbook is now part of the package, but customers will also be able to legally dip into the exchange at Betfair when placing these bets.