Betfair was founded in August 1999 by Andrew Black and Edward Wray. In its’ first month of trading Betfair attracted £120,000 of bets resulting in Black and Wray receiving an award for Emerging Entrepreneur of the year in 2002. Betfair is now the largest betting exchange in the world. Betfair are licensed by the Government of Gibraltar and regulated by the Gibraltar Gambling Commissioner under the Gambling Act 2005.
Betfair and betting exchanges alike have not escaped criticism, whilst John Brown was the managing director of William Hill he was the most outspoken critic of betting exchanges and he called for them to be banned. He insisted that they were illegal as they allow customers to take bets without holding a gambling licence. This argument was support by the other two of the top three UK bookmakers Ladbrokes and Gala Coral who also believe that betting exchanges heighten the likelihood of corruption. Ladbrokes alleged that at least one race was fixed every day. In 2004 Jockeys Kieren Fallon, and Sean Fox were suspected of foul play after Fallon appeared to race without exerting any effort and Fox appeared to dismount during a race. These incidents were suspected to be linked to unusual levels of gambling activity at betting exchanges. Following this a committee of peers and MP’s looked at assessing Britain’s gambling laws. The outcome of this meeting was a Draft Gambling Bill which recommended that punters laying a large amount in betting exchanges should be forced to obtain a licence. Betfair and Betdaq strongly opposed this Bill, Sir Robert Horton (former chairman of BP and Railtrack) who was appointed as non-executive chairman of Betfair stated that the number of professional punters using exchanges is immaterial and most of these are licensed bookmakers who are hedging their positions. Horton added that betting exchanges must not be forced abroad. It transpired that the government under Gordon Brown ignored the recommendation and allowed betting exchanges to continue operating in their current form. In 2005 Betfair obtained a Maltese gambling licence which was seen as threat to leave the UK if there was a change in the gambling laws.
In 2004 Betfair entered the poker market with an agreement with CryptoLogic and in 2005 they acquired the Danish poker website PokerChamps. In 2006 Betfair was issued a licence to operate in Australia, later that year Betfair also launched Betfair Mobile allowing punters to place bets via their mobile phones in time for the world cup. During this busy year Betfair also launched a casino platform. In 2007 Betfair launched the financial trading platform Tradefair. In 2008 Betfair Arcade was launched which initially offered sixty games. In 2009 Betfair became the betting partner of Manchester United FC. In 2010 Betfair launched Betfair TV and they floated on the London Stock Exchange.
Betfair now employ over 2,000 people worldwide and is a FTSE 250 listed company. They have over 3 million registered customers and process 7 million transactions every day.