Yu On Exchange Wagering, Future


Given the fact that the racing industry has seen its handle take a serious tumble in the last few years, more people are beginning to pay real attention to Betfair

, the wagering exchange which took 36 bets in its June 2000 launch and now processes more than 5.5 million daily.

An article by The Wall Street Journal discusses the wagering giant with Betfair Chief Executive David Yu, who explains that it is Betfair's technological platform which has been the driving force behind the change in global wagering practices.

"Ten years ago, betting was a really inefficient market and was not a good deal for customers," Yu was quoted as saying. "The prices were inefficient; there wasn't the chance for customers to express their view on what the real value should be. There wasn't the ability to bet in play and there was nowhere to trade your positions.

"We changed that by inventing the exchange. A lot of people who were quite sophisticated and knowledgeable about sport were sitting on the sidelines because there was no facility for them to bet into. Now we have more than 1 billion page views per day and on average £3,000 is deposited every minute via our site."

In the article, Yu also discusses the controversial British wagering levy and the launch of LMAX, a financial trading platform which will allow punters to trade on the movement of a company's share price without actually owning the underlying stock

"We have built a high-performance, highly reliable transaction engine and we have applied it to sports betting." The LMAX business, he says, "is going to be bringing those advantages into the financial trading world so we can extend the use of our core platform into other domains over time."

(With files from The Wall Street Journal)


The first line in the comment below is typical of what is wrong with many people in harness racing:

"I dont understand exchange betting so am not interested in it".

Please !

I dont understand exchange betting so am not intrested in it.The para mutal betting system is the best way of betting,and you have honest racing.The problem with wagering on horseracing was the introduction of excotic wagers.That is why the grandstands are empty.The excotic wager took a lot of money away from win,place and show pools and at many tracks the pools were so small you altered the odds if you put 20 dollars on an outsider,also the huge decrease in the chance of winning on excotics combined with a bigger take out,resulted in the bettor being cleaned out,and giving up going to the track.Also thr excotic took all the fun out of watching the race,when you bet on 1 horse you owned that horse for the race like the actual owner,but with excotics you have to follow 3,4.or5 horses and often have to examine your tickets after the race to see if you have won.Another complication of the excotic is the extra handicapping time and the fact newcomers to the track find them too complecated and confusing,unless racing solves this problem soon,its all over,my solution is to get rid of the excotic entirely and make a big cut in the win,place and show pools take out

What needs to happen is education on what exchange betting actually is instead of taking sarcastic swipes at the sport lead the charge to change.
Exchange betting is listed on the multi point plan also 5% levy on purses to pay for the plan. That I dont agree with. There is more than one betting exchange and if approached in the proper way they will support the plan fiancially, why wouldnt they the returns are favourable.
An exchange cuts out the levy's the middle man the cut of the pie. It matches bets with the players for a set commission. With takeouts around 26 percent on some wagers that could be as much as 20 percent going back into the horses price. Simple concept that was brought from the city to the race track. When betfair posted its profits last year it was in the billions of dollars that was just commission charges. Not a bad return.How many times have we groaned when a horse has gone off stride at the start...with an exchange you can change your bet in running. EDUCATION friends thats the name of the game. If the steering committee wants advice on how to proceed there are horsemen like myself willing to help......Roy Steele

The important thing at this point is we don't repeat the same mistakes. It is time for racing to welcome exchange wagering. A little of something is better than a lot of nothing.

With exchange wagering and the possibility of people making multipe bets during the running of the race, it may be what we need for those bettors who are tired of making their bet and waiting fifteen minutes for the next race.


They offer a low price, that customers are willing to pay, and deliver that on a rapidly-changing innovative technological platform that appeals to modern society.

I wonder why they are successful. :)

Imagine if they came to us in racing in 2002 or 2003 and asked to partner up? They needed partners then and would have been happy to, and probably would have negotiated a great price for us too, for purses. Our racing would have been promoted to a new subset of wagering customer - one that was not even looking at us!

Whoops, silly me. They did!

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