Betfair is set to offer its shares for sale on the London Stock Exchange for the first time.
Its main business is punter-to-punter betting - punters make bets with each other. It now claims three million registered customers and over the last year dealt with five million transactions a day - more than all European stock exchanges.
The company therefore makes a commission on every bet laid*, without the traditional risks run by a bookmaker - it never loses a bet. A spokeswoman for Betfair got in touch to point out that it only takes a commission on winning bets.
For the year ended 30 April 2010 Betfair grew revenues 13 per cent to £341m and made profits of £53.5m. It had £151m in the bank and no debts.
Chief executive David Yu said: "Betfair’s unique and highly sophisticated exchange platform technology is at the very heart of the Company’s success in establishing itself as the world’s largest international online sports betting provider."
The technology to allow real-time settlement of wagers is described as proprietary and unique. It is provided by LMAX, which is 73 per cent owned by Betfair. LMAX said in July it had received Financial Services Authority permission to trade contracts of difference - a way to mirror the buying and selling of any index or share, without actually owning it.
The company claims to have invested £300m and 4.6 million man hours in its platform since 2000.
The company employs just over 2,000 staff, as well as 143 in Australia were it owns 50 per cent of Betfair Australia. It also operates in Malta, Italy and the US.
SportingBet meanwhile is handing over $33m to the Office of the US States Attorney for Southern New York, acting for the Department of Justice, in order to guarantee not to be prosecuted. This sounds like a bargain - it cost online casino Partygaming $105m to secure a similar agreement in 2009.
This led Sportingbet to sell its US business for a dollar. ®