Q&A: Betfair - December 2004  

Continuing its series of questions and answers with companies influencing the digital sports space in the UK and Europe, Sport and Technology spoke to David Yu, chief technology officer for peer-to-peer betting exchange Betfair.

Please describe your team’s role and responsibilities.

 “Our engineering team looks after all aspects of technology for Betfair. That includes the obvious things like our website, but also looking after all of our production servers that host our site. We do all that internally, we don’t outsource at all. We also look after all the internal systems, like mail, our media and television systems, CRM systems, file servers and so forth. We also support other parts of the business such as field marketing. Additionally, we have an on-site 24/7 support team that can respond to customers’ technical queries. In the past we have had instances where our engineers have gone to key customers’ homes to provide technical support. My own background is in managing technology teams.”

You have just been awarded IT director of the year from the Telegraph Business Awards in the UK. How do you feel about that?

“I think it is really great for the team to get some recognition for the hard work they have done. We spend as much time here evaluating our people as we do our technology. At the end of the day it really is the team that does all the work. We have built a great team here. The fact that the technology is also good just happens because we have great people.”

How would you sum up how your technology works?

“At the heart of what we do is a high volume, high performance order matching system and all of our bets are orders or trades just as they would be on a stock exchange. They come into a proprietary engine that we’ve developed here in the last four years that enables us to provide all the functionality that we have. We process 1.5m bets per day which is three or four times the volume that the London Stock Exchange trades per day. We are also a true 24/7 business which is a real challenge because there’s never really any downtime for maintenance overnight that traditional businesses might have. We’re very externally event-driven, meaning that when a horserace or football [soccer] match starts, its going to start whether we are ready or not, whereas for most other online or e-commerce companies, a few seconds or minutes delay really doesn’t matter that much. There’s so much money flowing through our systems that every second really does count. People really are betting every second of the day somewhere in the world and we have 300,000 users in 85 countries.”

Do you block customers from the US where online gambling is illegal?

“We don’t allow people to register if they have US funds and so on. We also use sophisticated IP detection or other rules. For instance, in Australia the technicality is that you cannot bet ‘in the running’ on sports so we use IP detection to block Australian users. We operate within whatever regulatory models are set out.”

Why do you think that peer-to-peer betting has been such a growth area?

“I think because it’s a superior product that provides far more choice to users in terms of betting opportunities and far superior value. And people find it can be a much safer platform because we have an excellent audit trail. We maintain records of transactions, serve over 80m page views per day and we record every single one of those and archive them indefinitely. We know every single bet and who is betting on what and who they are betting against. And you just don’t have that kind of information or transparency in the brick and mortar equivalent. Our interests lie with the governing bodies of the sports because at the end of the day we will make money whatever the result is – because we take a commission from whoever wins. It doesn’t matter to Betfair who the winner is. Betfair is viewed very much as a marketplace rather than bets between opponents.”

There was controversy earlier in the year when some gamblers on the Betfair website were accused of race fixing. How have you addressed that?

“It was actually Betfair who raised it. These aren’t new issues in horseracing. All that happens is that through the transparency of the site and through the fact we can record every bet, we can say to the Jockey Club or International Cricket Council or whoever it may be through our memorandums of understanding, that these are the people placing the suspicious bets. These things have always happened, but now with our system, we have been able to bring them to light. The Jockey Club has come out on record saying how we have helped them to police their sport.”

What is the most popular sport that Betfair users bet on?

“Horseracing accounts for around 70% of the business (we were the third most prolific horseracing sponsor in 2003 as well), followed by soccer at 20% and then cricket, golf and greyhounds. At any one time we have 5,000 markets open on the site and in any given month we settle approximately 22,000 given markets.”

Who is your typical user?

“The Betfair site attracts a different kind of punter to the person who goes down to a high street store and sits there all day. Because it’s sophisticated technology, it attracts more of the city trader type.”

Would you ever consider launching a mobile service? Would that work based on the way your platform is structured?

“We have looked at mobile products and what we typically find is that the Betfair website is one of the most comprehensive websites out there in terms of its functionality and it is very complicated. It would be very hard to capture that in a mobile device especially because of the interface constraints. And because we have such a good telephone service with about 65 brokers who provide a service for our users, people would rather just call than use their phone to try and do something via SMS. However, we are looking at whether a segment of users might like something on the go. We would expect that the majority of our users would use the website from their home or from their business or be using the phone to call in.”

What changes do you have for the Betfair site in the pipeline?

“We are constantly releasing new things. We’ve probably averaged more than one release a week over the last year. One of the challenges for us is that because business is growing so quickly in terms of transactions, we spend a large part of technology time on improving the capacity and performance of the site. Whilst that might not be visible to the end-user, the fact that our performance stays the same means that we are running to stay still. But we have recently released new features and improved registration and we have a road map for releasing new products as far as the eye can see.”

What do you think will have the greatest impact on Betfair in the future?

“Probably regulation. But also continuing to innovate and improve technology will make a difference to Betfair as we never want technology to be a constraint to the business and its growth. Technology is really at the heart of what we do. The P2P betting exchange couldn’t exist without technology. Being able to stay ahead of the competition by creating innovative products is really important to us.”

The next Q&A will feature Dr Philippe Verveer, director of technology at the International Olympic Committee, 1999-2004.

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