No place for punter banter at smartened-up Betfair

Article from Greg Wood in 2008.

For fans of Betfair, the hiving off of its forum is the latest sign of the exchange's rapid corporatisation.

The users' forum on the Betfair betting exchange is not to everyone's taste. If some internet racing forums resemble a genteel discussion of matters of state in a Victorian drawing room, Betfair's can be more like a riot in the Coliseum. Some contributors like to think of themselves as Caesar, while others never tire of adding their voice to the raucous background noise. More tender souls, meanwhile, could well end up as lion food.

But the Betfair forum is also by far the largest and most lively aggregation of racing fans and gamblers anywhere on the web. It has been an important part of the exchange's appeal almost from its launch eight years ago, a way to advertise the person-to-person basis of the site and increase the sense of community.

Like any community, of course, it has its share of members with personality disorders: the bullies, the fantasists and barefaced liars, and the ones with such deep-seated anger-management issues that they should probably be under lock and key. But there are many others, too, who just want to talk punting with like-minded souls, and to do so in a forum where an honest opinion can be expressed, and even the odd insult hurled, without the sky falling in.

That, at least, is how it has always been, and those who didn't like it could easily surf off elsewhere. As of yesterday, though, the barbed wire may have started to fence off the wild frontier.

In a move which screams "float" even more plainly than the recent imposition of "premium charges" for some of its most successful clients, the responsibility for Betfair's forum has been hived off to a different part of the group - TSE Global Limited - with some important new procedures in place for forum users.

In particular, it will now be much easier to "report" other users (or at any rate, it will when the new forum actually works, since yesterday's launch survived for barely an hour before it crashed). This can only lead to the fairly rapid sanitisation of the entire forum.

Which is no bad thing, many would say. For anyone who has watched and admired Betfair's growth into a betting phenomenon, though, it follows the premium charge as the latest sign of the exchange's rapid corporatisation.

The punters who came together to make Betfair what it is are now just a means to an end, specifically a chunky share price when it floats. The forum, meanwhile, is a bit of an embarrassment.

Even Ben & Jerry sold out in the end, so the clear urge of Betfair's founders to spend more time with their money is both understandable and thoroughly well-earned. But when they are gone, what will remain?

This is surely the most intriguing question of all for punters who love the value and flexibility that exchange betting provides. Betfair's premium charge, remember, was apparently introduced because a small number of winners were felt to be draining too much money from the site's losers. Despite the dreadful PR, the money was required to keep the losers coming.

There must have been some good reason to allow their few rivals, along with many of their own customers, to kick them all over the park, and this one seems as plausible as any.

If Betfair had had a worthwhile competitor in the marketplace, though, it would never have dared to risk the loss of its precious liquidity. This, in turn, implies that its long-term viability may depend on the preservation of its effective monopoly in the market.

Now try this for a leap of logic. If a business model requires a monopoly to stop its customers eating it from within, then it is possible to argue that in the long term, it is a business model that doesn't work - which would be a good reason to cash in right now.

The graphs and projections at Betfair HQ no doubt suggest otherwise. It is arguable too that at some point in its expansion, it was inevitable that Betfair would want to draw a line under its humble beginnings and stride on into a shiny new profit-maximising future. Sadly, an edgy, rough-house internet forum probably has no place in that.