Betfair, Going Public..Founder Resigns..?

[rwwupl]

http://www.bloodhorse.com/horse-racing/articles/58993/betfair-going-public?source=rss

Lots of things to chew on with Betfair...Going public, and founder resigns?

Excerpt:
“Any international racing jurisdiction considering permitting Betfair to operate in their territory has to give very careful consideration to the impact on their sport, and learn from the British experience. In fact, we understand that they are offering far better terms to other Racing authorities, and we call on Betfair to now engage with us constructively and end the uncertainty,” Roy said.

And following this article:

http://blogs.wsj.com/source/2010/09/21/betfair-founder-andrew-black-to-quit-as-company-confirms-ipo/

Excerpt:

Andrew Black, one of two founders of U.K. internet betting exchange Betfair, has picked a funny old time to stand down as a non-executive director of the company, which Tuesday confirmed a long speculated-upon plan to list on the London Stock Exchange.

Buried on page six of the Intention To Float document it says:

Andrew Black and Chris Batterham, who are both Non-executive Directors of Betfair, will retire as directors at the AGM to be held on 6 October 2010.”

Excerpt #2:

Could Black have been prompted to get out while the going was good, fearing that his baby may be heading in the same direction as Ocado, another recent high-profile U.K. technology IPO which, like Betfair, was primarily handled by Goldman Sachs and which is now trading at around 20% below its July offer price. Read related news here.

[Robert Goren]

Getting out while the getting is good?

[lamboguy]

its called :distribution

[rwwupl]

https://www.britishhorseracing.presscentre.com/Press-Releases/BRITISH-HORSERACING-REACTS-TO-BETFAIR-S-IPO-ANNOUNCEMENT-166.aspx

21 Sep 2010 18:00
BRITISH HORSERACING REACTS TO BETFAIR’S IPO ANNOUNCEMENT

Excerpt:

Following today’s announcement from Betfair that it intends to list on the London Stock Exchange, Paul Roy, Chairman of the British Horseracing Authority, said:

“Today’s announcement is no real surprise to the markets. What will be of great interest is that it comes a day after the close of a major consultation process by the Horserace Betting Levy Board, that strikes at the heart of Betfair’s model, at a time when the figure of an underpayment to Racing of £30m has been stated by a leading betting industry figure, and during which the future relationship between exchange betting and Racing is under close scrutiny by the relevant authorities.

[andymays]

http://www.thoroughbredtimes.com/international-news/2010/September/22/British-Horseracing-Authority-blasts-Betfair.aspx

Excerpt:

Any international racing jurisdiction considering permitting Betfair to operate in their territory has to give very careful consideration to the impact on their sport, and learn from the British experience,” Roy said. “In fact, we understand that they are offering far better terms to other Racing authorities , and we call on Betfair to now engage with us constructively and end the uncertainty.”

[DeanT]

It strikes everyone as odd that the BHA would be commenting on an IPO of a tech company. It's like the Yellow Pages commenting on Google's IPO.

The BHA, and other horse racing authorities world-wide (as the rest of the gambling world innovates, grows and continues to expand) somehow sits and clings to the past (they were created in 1832, and really dont act much different almost two centuries later). I guess the cathartic exercise of trying to stick it to others makes them feel good, but it does not do anything for the sport. The sport simply slips into irrelevance, as customers continue to leave.

15 or 20 years from now this will all be looked at in a business book, or in a white paper in an economics journal. There have been scores of old businesses who clung to the old, thinking they are better than they are, and are more needed than they are. They resist, fight, usually ask governments for help, then they fail.

Betfair gets about 30% of their action from racing; mainly because racing fights them at every turn. It used to be upwards of 70% way back in 2003. They have seen the roadblocks and the folks who are protecting their monopoly first, and have moved on to be a global technology company with hundreds of millions of dollars of revenue on sports, Idol betting, Oscar betting and all the rest. Customers, who used to play racing in high quantity, have seen the writing on the wall, and the unwillingness of racing to cooperate, and have fled the sport with them.

Betfair does not need racing, racing needs them.

Racing just has a serious problem coming to grips with that.

I doubt they ever will.

[gm10]

It strikes everyone as odd that the BHA would be commenting on an IPO of a tech company. It's like the Yellow Pages commenting on Google's IPO.

The BHA, and other horse racing authorities world-wide (as the rest of the gambling world innovates, grows and continues to expand) somehow sits and clings to the past (they were created in 1832, and really dont act much different almost two centuries later). I guess the cathartic exercise of trying to stick it to others makes them feel good, but it does not do anything for the sport. The sport simply slips into irrelevance, as customers continue to leave.

15 or 20 years from now this will all be looked at in a business book, or in a white paper in an economics journal. There have been scores of old businesses who clung to the old, thinking they are better than they are, and are more needed than they are. They resist, fight, usually ask governments for help, then they fail.

Betfair gets about 30% of their action from racing; mainly because racing fights them at every turn. It used to be upwards of 70% way back in 2003. They have seen the roadblocks and the folks who are protecting their monopoly first, and have moved on to be a global technology company with hundreds of millions of dollars of revenue on sports, Idol betting, Oscar betting and all the rest. Customers, who used to play racing in high quantity, have seen the writing on the wall, and the unwillingness of racing to cooperate, and have fled the sport with them.

Betfair does not need racing, racing needs them.

Racing just has a serious problem coming to grips with that.

I doubt they ever will.

You hit the nail on the head.

They aren't behind the curve ... they haven't even realized that there is a curve.

[DeanT]

You hit the nail on the head.

They aren't behind the curve ... they haven't even realized that there is a curve.

That's a fine way to put it.

It is just frustrating to watch a wonderful business go down in flames like we have. Read the boards in your country and the BHA and some bookies and big breeders are going on about this IPO and saying how much they are "needed" to make it work. What a complete load of malarky.

In five years time racing will be a pimple prick on revenues of this monster company. They will probably spend less than 5% of their marketing spend on racing at that time. LMAX, moving into China, asian markets as barriers fall, the Indian market for cricket and elsewhere - building a huge business with technology as its main core.

Racing means virtually nothing to them at that time. And the BHA and others are going to have to look in the mirror.

Reading Greg Wood in the Guardian was good for a laugh (or a cry depending on your perspective)

http://www.guardian.co.uk/sport/blog/2010/sep/21/racing-united-immediate-bust

They want more money. Dammit, they deserve more money. They had it a couple of years ago and now they want it back. But they don't want to earn it – that would be tawdry. They just want to count it and bank it.

This is racing united only in arrogance, complacency and sheer pig-headedness. Oh, and futility too, because it does not matter how many times you suggest that the "right target range" for the levy is between £130m and £150m, rather than the current estimate for 2010 of £75m. The government will still laugh at you.



Online gaming is growing in the UK faster than Facebook is growing in the UK. .........

http://www.r2collective.com/

How do we sit here and watch Rome burn, arguing about the ridiculous while the rest of the gambling world passes us by? How does racing do this again and again? Doesnt anyone who runs racing ever get fired for poor performance?

[andymays]

I haven't made my mind up on Betfair but I am leaning against them. When Burn came on TVG and said he supported the takeout increase in California I couldn't believe what I was hearing. I think there are integrity issues with this guy.

Nobody has been able to tell me whether or not the standard 5% (or whatever it is) will be the same in California.

I believe the people who run things here will add on another 10% and tell Horseplayers that we're still better off than we were before.

Tell me where I'm going wrong on this!

[DeanT]

Nobody has been able to tell me whether or not the standard 5% (or whatever it is) will be the same in California.

I believe the people who run things here will add on another 10% and tell Horseplayers that we're still better off than we were before.



I would not put it past racing to do that. If they ran the hula hoop company in 1956 I am pretty sure hula hoop's would have not caught on.

Who knows what you are dealing with in racing. Read the Paulick report comments section for a glimpse of what and who runs it.

[gm10]

I haven't made my mind up on Betfair but I am leaning against them. When Burn came on TVG and said he supported the takeout increase in California I couldn't believe what I was hearing. I think there are integrity issues with this guy.

Nobody has been able to tell me whether or not the standard 5% (or whatever it is) will be the same in California.

I believe the people who run things here will add on another 10% and tell Horseplayers that we're still better off than we were before.

Tell me where I'm going wrong on this!

Regardless of take-out, you'd be able to lay and get fixed odds. Those are two definite improvements for any serious player.

[andymays]

I would not put it past racing to do that. If they ran the hula hoop company in 1956 I am pretty sure hula hoop's would have not caught on.

Who knows what you are dealing with in racing. Read the Paulick report comments section for a glimpse of what and who runs it.

This is why we need reporters and not "repeaters". You would think that someone would ask the questions that need to be asked of Betfair and those that support them in California. WTF?

[DeanT]

This is why we need reporters and not "repeaters". You would think that someone would ask the questions that need to be asked. WTF?

Betfair is smart Andy, and they know prices and takeout with their product - it is their product. If they wanted to charge more takeout and make more money, they would.

From their annual, when responding to raising their prices:

But shouldn’t we want customers to lose money as quickly as possible?

Slot machine operators around the world routinely return a higher percentage to punters than they are required to under regulation. Altruism, or commercial nous?

Racing knows that customers who go racing, and a) feel they had no value for money at the racecourse, and b) don’t win a single bet all day, don’t have much fun. They may not come back. In just the same way, we know that the least valuable customers to Betfair are the ones who lose all their money quickly. They go away and never come back. So, we are happy to take less off our customers per bet.

Business is all about offering your customer the product he wants at the price he wants. If you can do that, he’ll spend his money with you. For us, that means offering a whole new range of products (inrunning betting, for example, or the ability to trade a position), to attract a whole new audience.

So, if racing came in and said to me or you and we were running a successful business and said "let us price it for you and run it with your customer base" any sane person would tell them to go jump in the lake. I would expect BF, or anyone else, who partners with racing who is building a billion dollar brand would not allow anyone to tell them how to price their product. It would be economic suicide.

As for "who in racing is asking these questions?". No one, because all we hear from racing is rhetoric about the old time thinking. This business has never had gambling people in it making decisions, so we should not expect them to ask gambling related questions.

[andymays]

Betfair is smart Andy, and they know prices and takeout with their product - it is their product. If they wanted to charge more takeout and make more money, they would.

From their annual, when responding to raising their prices:



So, if racing came in and said to me or you and we were running a successful business and said "let us price it for you and run it with your customer base" any sane person would tell them to go jump in the lake. I would expect BF, or anyone else, who partners with racing who is building a billion dollar brand would not allow anyone to tell them how to price their product. It would be economic suicide.

As for "who in racing is asking these questions?". No one, because all we hear from racing is rhetoric about the old time thinking. This business has never had gambling people in it making decisions, so we should not expect them to ask gambling related questions.

They can't do it in California at 5%. It will never ever happen at that price.

If they could guarantee that price in California I would support them.

[DeanT]

They can't do it in California at 5%. It will never ever happen at that price.

Like I said - I doubt they care if they end up in CA or not. CA should care, but BF does not.

If CA does not play ball, maybe NJ will. if NJ does not want to play ball, India will. And China, and Canada, and everywhere else there is an opp.

When you have a global business that has a technological edge, they will end up winning, because customers are the ones who run it, not regulators.

If Sotheby's had a huge lobby in CA in 1998 and wanted to shut out Ebay the way racing shuts out companies and they succeeded, they would still be a huge business because they were offering something that consumers wanted. Consumers always win.

There will be online wagering in AZ some time in the future. There will be more and more exchange wagering as well in many, many countries. The only question is when - and what companies and businesses partner up and try and partake in its success.

[Indulto]

I haven't made my mind up on Betfair but I am leaning against them. When Burn came on TVG and said he supported the takeout increase in California I couldn't believe what I was hearing. I think there are integrity issues with this guy.

Nobody has been able to tell me whether or not the standard 5% (or whatever it is) will be the same in California.

I believe the people who run things here will add on another 10% and tell Horseplayers that we're still better off than we were before.

Tell me where I'm going wrong on this!Suppose the takeout for win bets was 10% regardless of whether the bet was made pari-mutuelly or through an exchange?

[Charlie D]

Reading Greg Wood in the Guardian was good for a laugh (or a cry depending on your perspective)

http://www.guardian.co.uk/sport/blog/2010/sep/21/racing-united-immediate-bust





Those same punters, perhaps the most important customers of all in the long term, were treated as an irrelevance by the Racing United charter.



Ring a bell???

[Enigma]

The answer to the ever growing problem of the decline in horse racing is obvious. Offer huge incentives(reduce take-out to an acceptable level) to bring back the lost revenue into the horse racing gambling arena.
Eliminate the obvious corruption with severe penalties. Of course we know this will never happen and horse racing will continue to spiral into oblivion.

[rwwupl]

http://www.markxdavies.com/2010/09/22/who-on-earth-is-advising-racing/

.
--------------------------------------------------------------------------------

Who on earth is advising racing?

Excerpt:

I have to say that I saw the BHA’s press release in response to Betfair’s announcement of its intention to float and shook my head in disbelief. Who on earth is advising these guys, and what on earth are they trying to achieve?

If you haven’t seen their statement, you can find it here. If you haven’t the time to read it, suffice it to say that they basically appear to be of the view that the current levy consultation can somehow scare investors off buying Betfair shares. I know Paul Roy has held that position for a while because he once told me over dinner; but when he did, I genuinely thought that, in time, he would see how idiotic a suggestion it was. And that if he didn’t, then someone would warn him off it as a strategy. Sadly for him and for Racing, neither appears to be the case.

OK… I have a vested interest here: as most readers will know, I am a shareholder in Betfair - arguably a significant one; and you could claim that I am therefore talking my own book. But I make no reference to Betfair’s float, which I am restricted from discussing in any way, other than to use it as the context for the BHA statement. That statement reveals the astonishing inadequacy of Racing’s leadership, as well as that of its advisers – should, that is, such people exist.

[Charlie D]

Thanks Roger

(Change British Horseracing to US horse racing)


The fact is that today, Betfair (like most bookmakers) runs a global business, to which the relevance of British horseracing is, unfortunately, falling by the day. This sad and simple truth is clearly lost on Racing’s leaders,

[andymays]

Betfair responds to critics of its business model in England - Thoroughbred Times

http://www.thoroughbredtimes.com/national-news/2010/September/23/Betfair-responds-to-critics-of-its-business-model-in-England.aspx

[DeanT]

Betfair responds to critics of its business model in England - Thoroughbred Times

http://www.thoroughbredtimes.com/national-news/2010/September/23/Betfair-responds-to-critics-of-its-business-model-in-England.aspx

It's why I like reading real businesses when they speak. You can tell a lot about an argument, when said argument is detailed and referenced. Almost every BF release over the years is always referenced, like you see in this document, with footnotes, either to gambling journals, or case law.

When racing puts one out - like we see with the CA takeout hike, or the BHA document - they are always filled with broad generalities, claims without reference, and buzzwords; simply placed to inflame a passion, or to ask for governments to bail them out.

It is a fascinating exercise to watch.

The press needs to ask the questions and get the answers, but they do not.

The first question anyone would ask CA when they speak of the takeout hike and make a wild claim like "$30M will be added to purses" is: What are you using to estimate this? Last years numbers are used to estimate, but raising prices lowers handle by a multiplier of 2.3, so how can you keep the same projections.... etc etc."

But no one does.