Betfair s Free Sport Betting Business Model

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I've been using Betfair for a long time now yet it's only recently I've wondered simply how much performs this company make? This question 's what has compelled me to create this information. I will not get copies of the accounts from companies house, this content will be all conjecture based on what I've picked up by using the site in the past.

What has allowed me to ponder this question could be the transparency in the Betfair site. If you consider traditional bookies such as WilliamHill, Ladbrokes or Betfred, that which you don't know on any particular sporting event is what continues to be bet altogether and on what particular outcome these bets were placed.

Take a normal Friday afternoon race meeting at say Ascot. It's the 2.30 and 5 horses are racing; the punters are logging on to among the traditional bookmakers websites and backing the different horses. The outcome is repeat the second favourite winning, we've got no clue whether individuals were backing the outsider or favourite, the amount was bet, and what kind of profit the bookmaker made.

Now take into account the same race with Betfair. The total amount exchanged to the race is offered near the top of the page, this can be typically about A�200,000 to get a standard horse race. Now we realize that Betfair have a commission on all winnings, and then for every bet exchanged there exists a winner, so they're taking their 5% whatever the result - about A�10,000 in this case.

So now for any quick little bit of 'back of fag packet' maths. Approximately 40 races each day generating A�10,000 are all A�400,000 a day one week per week, that's 2.8 million pounds a week. Throw within the bigger meetings understanding that rounds it to express 3 million, 5% that is A�150,000.

Now think about the Premiership football season. At least 12 games weekly generating between A�200,000 as well as a million pounds in exchanged bets, take the average and figure out the 5% commission knowning that's another A�350,000. On top of this there's the lower league and foreign games that has to generate another A�100,000 in commission so we're up to Half one million pounds per week in revenue.

Bear in your mind that you could (and individuals do) bet on everything, golf, cricket, tennis, boxing, champions league football, International soccer, not to mention gaming. I'm starting to come to concluding that they must be attracting weekly revenue within the millions, if it's only A�3 million per week, that's over 150 million a year.

I admit to having no clue if my workings are drastically wrong here, of course, if Betfair actually has annual revenue of A�1million or sboarena A�1billion. Neither do I have a sense of what their legal fees, IT costs etc amount to. What I do see is the fact that unlike traditional bookmakers the results associated with a sporting event doesn't have effect on their revenue.

To this end their main aim will be to just recruit as many customers as possible, which poses the question; with the numerous online bookies out there offering free introductory bets as high as and in excess of A�100, then so why do Betfair just offer A�30. That will be the topic of my next article.