| HBS Case Collection
(Revised September 2009)
Betfair vs. UK Bookmakers
Betting exchanges provide an electronic platform that allows ordinary consumers to not only back teams to win, but also to lay odds for other punters to back. This business model allows punters to cut out the middleman of the bookmaker and leads to a much more efficient two-sided market. Betfair.com's domination of the betting exchange has threatened to undermine the core of the traditional bookmakers' business model. The case examines two aspects of the industry: (1) What specific choices did Betfair make to become the dominant betting exchange, winning the competitive battle over Flutter.com? (2) At what stages do Betfair.com's business model and those of the bookmakers interact? Will Betfair.com naturally come to dominate the industry, and if so how should the bookmakers react?
Keywords: Business Model;
Decision Choices and Conditions;
Entertainment and Recreation Industry;