Betfair is the world's largest Internet betting exchange. The company is based in Hammersmith in West London, England.
Since Betfair was launched in June 2000 it has become the largest online betting company in the UK and the largest bet exchange in the world. Betfair claim to have over 3 million clients and a turnover in excess of £50m/week.
A betting exchange allows punters (gamblers) to bet at odds set and requested by other punters rather than by a bookmaker. Members can make both 'Back' bets (normal bets on a selection to win) and 'Lay' bets (bets on the opposite side of the Back, against the selection), thereby eliminating the traditional bookmaker.
Betfair claims on average 20% better odds than those offered by a traditional bookmaker.
Betfair charges a commission on all winning bets, which is set at 5% of the net winnings for most markets, although according to how much a client wagers on the site, it is possible to reduce the amount of commission paid to as low as 2%.
The Betfair interface can be seen as bearing a strong similarity to that of the Stock Exchange, with the 'back' and 'lay' options comparing to the buying and selling of derivatives. Indeed there are many professionals who play the Betfair market for profit, using purpose-designed software 'robots', in much the same way as a Stock market trader.
Betfair's co-founders, Andrew Black and Edward Wray, won the Ernst and Young Emerging Entrepreneur of the Year award. In 2003, the company was one of about 50 recipients of the Queen's Awards for Enterprise in the Innovation category. The Queen's Awards are the UKs highest official awards for business.