Betfair s Free Sport Betting Business Model

I've been using Betfair for a long time now however it is only recently I've wondered just how much can this company can even make? This question is exactly what has compelled me to write down this short article. I will not receive copies of their accounts from companies house, the information will be all conjecture depending on what I've picked up by using your website through the years.

What has allowed me to ponder this question may be the transparency inside Betfair site. If you consider traditional bookies like WilliamHill, Ladbrokes or Betfred, whatever you have no idea of on any particular sporting event is what has become bet as a whole and on what particular outcome these bets were placed.

Take a consistent Friday afternoon race meeting at say Ascot. It's the 2.30 and 5 horses are racing; the punters are logging onto one of the traditional bookmakers websites and backing the many horses. The outcome is say the second favourite winning, we now have no idea whether people were backing the outsider or favourite, how much was bet, and what kind of profit the bookmaker made.

Now consider the same race with Betfair. The total amount exchanged for your race is given at the top of the page, that is typically about A�200,000 for any standard horse race. Now we realize that Betfair please take a commission on all winnings, as well as every bet exchanged there exists a winner, so they're taking their 5% whatever the result - about A�10,000 in this instance.

So now to get a quick amount of 'back of fag packet' maths. Approximately 40 races each day generating A�10,000 each are A�400,000 every day one week a week, that's 2.8 million pounds weekly. Throw in the bigger meetings and that rounds it to state 3 million, 5% ones is A�150,000.

Now consider the Premiership football season. At least 12 games per week generating between A�200,000 plus a million pounds in exchanged bets, take the average and work out the 5% commission and that's another A�350,000. On top of this you have the lower league and foreign games that have to generate another A�100,000 in commission so we're up to Half a million pounds per week in revenue.

Bear at heart that one could (and the ones do) bet on everything, golf, cricket, tennis, boxing, champions league football, International soccer, not to mention gaming. I'm starting to arrive at concluding that they must be getting weekly revenue in the millions, and if it's only A�3 million weekly, that's over 150 million annually.

I admit to having no clue if my workings are drastically wrong here, if Betfair actually has annual revenue of A�1million or sbobet A�1billion. Neither do I have a solid idea of what their legal fees, IT costs etc total. What I do see is always that unlike traditional bookmakers the outcome of the sporting event has no bearing on their revenue.

To this end their main aim will be to just recruit as much customers as you possibly can, which poses the question; with the numerous online bookies available offering free introductory bets as high as plus more than A�100, then how come Betfair just offer A�30. That may be the topic of my next article.