Point 2 is not a valid point imo. It is the biggest barrier to entry for anyone entering the exchange market. BF have re-invested 100's of millions into what they have. The volume of bets/transactions that their systems have to handle is mind boggling.Just cannot be replicated cheaply.

With regard to point 1 it may well be the case that some places actually open up (US, Asia, India etc). These are just huge compared to places like France etc.

http://www.independent.co.uk/news/business/news/japanese-bank-faces-loss-on-betfair-listing-2029058.html

Softbank, a Japanese bank, is facing major losses on its 23 per cent stake in Betfair, the online betting exchange which is hoping to float in the autumn.

The British business, one of the UK’s few successes during the dotcom era, has hired Goldman Sachs and Morgan Stanley to advise on the listing, which could value the company at £1.5bn. However, that price tag is understood to be at the top of most industry watchers’ expectations. Softbank bought its near one-quarter stake in Betfair for £355m in 2006, valuing the business at £1.54bn. When asked if the company would be valued at £1.5bn, a senior Betfair source replied: “I wish.”

Why would anyone want to? 99% of system time is probably spent processing the requests of non liquidity providers

you keep banging this drum but you have nothing to back it up with except your own prejudices. Take it to another thread imo

I also suspect a lot of their liquidity is down to a very small percentage of customers. That makes them vulnerable imo.

Reckon thats probably true.

you can get as much as you want matched at 1.01 i would imagine. Your talking about getting matched at price you want. Its tiring having to read same stuff on and on.

nice. Everyone has trouble getting matched at value prices, your the one who thinks they have god given right to value prices and moans when you have to do some work to get on.

So the only people who drip feed are people with their own tissue.

I don't think I have a god given right to value prices and I don't think under any interface I'd get what I want on at my chosen price. What I moan about is the stupid interface that necessitates drip feeding and conveys information that encourages talentless copy cats to bombard the API. I'm fed up saying this. Maybe if t1ts like yourself would read my posts it would save me having to repeat the same thing over and over.

sonoflardars, I was just wondering who the first safety-in-numbers t1t would be to come along after bren's posts.

nice thread hijacked

yep by the whinging feck who hates betfair and wants an interface to just suit him

Is it a milk float ?

There's plenty of other exchanges with better technology - but they aint got any liquidity so they die. qed.

I thought they wrote this story last year.....

Betfair ponders £1.5bn flotation after shareholders call in bankers for talks
Betfair could be in line for a £1.5bn flotation after shareholders in the world's biggest gaming exchange decided to call in bankers to discuss the group's options.


By Jonathan Sibun
Published: 10:54PM BST 22 Aug 2009
Betfair ponders £1.5bn flotation after shareholders call in bankers for talks
Betfair is keen to raise capital so that it can lead the consolidation of the gaming sector

Bertie Black and Ed Wray, Betfair's founders, have agreed for meetings to be held with banking advisers over the coming weeks to discuss a potential flotation in what would be the UK's first major listing since the financial crisis hit.

Betfair is keen to raise new capital in a bid to lead the consolidation of the global gaming industry and a flotation would give it the necessary means.

A listing would also land Mr Black and Mr Wray with a potential payout worth hundreds of millions of pounds, cementing their position as some of Britain's most successful entrepreneurs.

As well as the two founders, who own a combined 25pc stake, Betfair's shareholders include SoftBank, the Japanese bank, which owns a further 23pc and is thought keen to realise a return on its investment.

Softbank bought its stake in a £355m deal in April 2006, valuing the betting company at close to £1.5bn.

While Betfair has seen strong growth since then, equity market valuations have fallen sharply since the financial
crisis hit and Softbank's stake would likely be valued at a similar level to three years ago.

Mr Wray and Mr Black are thought each to be worth about £190m but could scoop a further £350m or more between them were they to offload their stakes in the company.

Private equity investors and management own the remaining 25pc of the company.

Betfair suggested it was not pushing towards a flotation when announcing results earlier this month but the founders are understood to have reconsidered their position in the wake of the continued strength in global equity markets.

While a flotation appears to be the most likely option, Betfair could choose to raise capital by other means, including tapping existing shareholders for further funds. A downturn in the equity markets could also persuade the founders to put any flotation plans on hold.

Betfair is keen to raise capital so that it can lead the consolidation of the gaming sector.

Industry experts believe a ban on online gaming in the US could be lifted as early as next year, a move that would be expected to lead to a pick-up in mergers and takeovers in the sector. 888 and Partygaming, the online gaming companies, are thought likely to be involved in any consolidation moves.

Goldman Sachs, Morgan Stanley and Rothschild have acted for Betfair in the past and might expect to be involved in any flotation or capital raising. Any discussions are thought likely to lead to a beauty parade of potential advisers in the coming weeks.

Betfair, which revolutionised UK betting with its peer-to-peer wagers, revealed record full-year results earlier this month.

Revenues rose 27pc to £303m in the year to April 30, with active users - those who placed a bet over the period - up 25pc to 652,000. Earnings before interest, tax, depreciation and amortisation rose 29pc to £72m, despite ongoing investment.

David Yu, Betfair's chief executive, said some two billion bets were placed on the exchange last year, an average of 6.4m trades a day, more than on all European stock exchanges.

Betfair is one of a host of private companies, many backed by private equity firms, expected to float in the last quarter of this year and the first three months of 2010.

Acromas, the group behind AA, the roadside emergency service, and Saga, the travel and insurance specialist, Pets at Home, the retailer, Merlin Entertainments, the London Eye operator, and United Biscuits and Birds Eye, the food companies, are just some of those thought to be on the shortlist of possible candidates.

Betfair declined to comment.

-Basic rate of commission will increase, seem to remember them toying with 7% years back.
-Accounts will be restricted or Premium Charge will go up to 50%.

significant potential upside as well with some big new markets potentially coming online (us, india, others)

Agree Zebadei & Waytowin. I personally believe it is too high. You can see the previous years profit and revenue on the reports and the valuation of £1.5 billion is over 30 times last year profit.

Sure share prices are based on future growth and if de-regulation occurs in key markets in Europe and US there is massive scope for growth but it's a gamble still.

However we've been reading these 'Betfair will float' statements for over a year and we still haven't seen anything official. They say there is no smoke without fire but they must have run out of wood for the bloody fire at this stage. Also I'd trust a more research article from Financial Times than Sky News speculation merchants.

CLYDEBANK29     19 Jul 10 16:50 
£1.5bn for a retail company making £70m a year

Remember £70m is before depreciation, tax etc, after the figure was £34m and 2008 was £33m so not much growth there!!

Chuck in regulatory issues with countries banning BF.

I would also speculate future tax implications for users which would affect volumes,i would guess maybe 1000 users have won over £1m, its only a matter of time before a few elite users profits become more widely known and with more and more users using BF as their sole income maybe the government would like a share.

Personally ive been looking forward to them floating but the more i think about it the less i will invest.

Amazon is P/E 20

Betfair also has no debt, and i'm sure betfair siting on $100 million cash, as all betafir new investment has come from cash and not debt