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Betfair's Free Sport Betting Business Model
(image: https://i.ytimg.com/vi/zqYir_sbO7g/maxresdefault.jpg)I've been using Betfair for decades now but it is only recently I've wondered the amount creates this change company can certainly make? This question is exactly what has compelled me to write down this informative article. I will not be getting copies of their accounts from companies house, the information will likely be all conjecture based on what I've picked up by using the website in the past.
What has allowed me to ponder this question is the transparency inside Betfair site. If you consider traditional bookies such as WilliamHill, Ladbrokes or Betfred, whatever you don't know on any particular sporting event is what has become bet as a whole as well as 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 to one of several traditional bookmakers websites and backing the many horses. The outcome is repeat the second favourite winning, we've got no idea whether individuals were backing the outsider or favourite, just how much was bet, and what type of profit the bookmaker made.
Now consider the same race with Betfair. The total amount exchanged for that race is offered towards the top of the page, this can be typically about A�200,000 for the standard horse race. Now we know that Betfair have a commission on all winnings, and then for every bet exchanged there's a winner, so they're taking their 5% whatever the result - about A�10,000 in this case.
So now for the quick little 'back of fag packet' maths. Approximately 40 races each day generating A�10,000 each are A�400,000 every day 7 days every week, that's 2.8 million pounds weekly. Throw within the bigger meetings understanding that rounds it to express 3 million, 5% that is A�150,000.
Now consider the Premiership football season. At least 12 games weekly generating between A�200,000 plus a million pounds in exchanged bets, consider the average and work out the 5% commission which's another A�350,000. On top of this there is the lower league and foreign games that must generate another A�100,000 in commission so we're up to Half millions of pounds a week in revenue.
Bear in mind you could (the ones do) bet on everything, golf, cricket, tennis, boxing, champions league football, International soccer, as well as gaming. I'm beginning to come to concluding that they must be getting weekly revenue inside millions, and if it's only A�3 million weekly, that's over 150 million 12 months.
I admit to using no clue if my workings are drastically wrong here, of course, if Betfair actually has annual revenue of A�1million or A�1billion. Neither do I have a perception of what their hips, sboarena IT costs etc add up to. What I do see is the fact that unlike traditional bookmakers the outcome associated with a sporting event has no relating their revenue.
To this end their main aim must be to just recruit numerous customers as possible, which poses the question; using the numerous online bookies available offering free introductory bets up to and in overabundance A�100, then exactly why do Betfair offer only A�30. That could be the topic of my next article.
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