Betfair’s merger with Paddy Power signals the end of a ten-year crusade against traditional operators
Coming hard on the heels of the potential merger between Ladbrokes and Coral, news has just broken that Paddy Power and online bookmakers Betfair will be joining forces.
It appears the era of the super-bookie has arrived, with bet365’s astonishing year-on-year growth leaving rivals scrabbling around to compete with the behemoth who continue to set a blistering pace in this exciting industry.
For betfair, getting into bed with a high-street bookmaker would have been an unthinkable prospect ten years ago. There were high hopes that the “world-leading sports betting exchange” would not only compete favourably with online bookmakers but actually usurp them.
Betfair were apparently “revolutionising betting”, they were signalling the death knell of Coral, Ladbrokes and William Hill. Aggressive marketing campaigns were deployed across all forms of media to illustrate that punters could win “up to 20% more” than they would get from their favourite bookie.
While this new kid on the block made online bookmakers sit up and take notice, the early growth was not sustained as the traditional bookies reacted to betfair’s arrival by making their prices more competitive and improving their In-Play products. More latterly, cash-out facilities have snuffed out another unique selling point of the exchange.
Betfair’s decision to create a fixed-odds betting product was essentially admitting defeat with any ambition that the exchange could compete on a level playing field with the big boys.
Even with the unpopular premium charges being levelled at long-standing customers, it simply isn’t possible to achieve the required growth if you are only creaming 5% of the profit on every exchange market while the bookies are getting odds-on favourites beaten on a daily basis.
Go to the betfair site for the first time and you could be forgiven for thinking the exchange actually exists. It simply sits alongside the other supporting cast members such as casino, poker and arcade while the fixed-odds product gets all the marketing love.
The betfair exchange remains a thing of beauty with all the tools required to essentially play the role of bookmaker. However, it has failed to conquer the hearts and minds of punters up and down the land. For many, it was too difficult a concept to understand, especially with the odds juggling about on a constant basis.
Now betfair will merge with Paddy Power and be led by the Irish company’s initatives. It’s been one hell of a success story for a company that only started trading in the summer of 2002 although a grand departure from the original ambition of decimating operators like Paddy in those halcyon days.