From Academic Kids

Betfair is a United Kingdom based Internet bet exchange. Betfair was launched in June 2000 and is the largest online betting company in the UK, with over 100,000 clients and a turnover in excess of 50m/week.

The exchange allows punters (gamblers) to back and lay at odds set and requested by other punters rather than by a bookmaker. Betfair's bookmaking model - bringing together two counterparties with opposing views - removes the bookmaker's markup or overround and this results in odds that are on average 20% better than bookmakers, according to the site's operators. Betfair punters offer odds based on opinion rather than on a set bookmakers' margin.

The fact that gamblers can now lay outcomes on the exchanges has caused tremendous criticism from traditional bookmakers with much of the anger coming from the UK's "Big Three" - Coral, Ladbrokes and William Hill. These firms argue that granting who they consider to be anonymous punters the ability to bet that an outcome will not happen is causing corruption in sports such as horse racing (since it is much easier to ensure a horse will lose a race, the bookmakers reason).

Betfair has led their defence by countering that while corruption is possible on any gambling platform, the bookies' arguments are motivated not by concern for the integrity of sport but by commercial interests. Betfair also asserts that unlike the high street brokers, who all accept anonymous cash bets, Betfair is well aware of who their customers are. Customers are required to create personal accounts, and Betfair keeps records of each customer's betting history. Betfair in particular has noted that they have signed numerous agreements with governing bodies of sport including the Jockey Club, with whom they insist they will co-operate with fully if the latter suspects corruption to have taken place.

In the summer of 2004, Betfair provided data to investigators, including the City of London Police which on September 1 led to 16 arrests on charges related to race fixing. Among those arrested was champion jockey Kieren Fallon, whose case remains before the courts as of this writing.

The company has attracted much comment in the British and Australian press. Its co-founders - Andrew Black and Ed Wray - won the Ernst and Young Emerging Entrepreneur of the Year award. More recently the company was recognised by the Department of Trade & Industry when it was given a Queen's Award, the most prestigious business award in the UK.

Betfair does not accept customers from the United States.

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