A British software developer called Andrew Black now runs a multi-million pound business and employs 290 employees after getting a great idea and implementing it.
He is the owner of Betfair.com which cuts out the bookmaker by matching those that want to bet with those that want to take bets. In other words you can be either the punter or the bookie on his site.
He got the idea from the Stock Market where bargains are matched and commission is taken. He gets his money from a small commission from the winner.
Betfair has 30,000 regular customers and 80% of the market that they are in.
Cutting Out the Middlemen
The Internet allows people to bypass the middleman, and the bookmakers are just middlemen. However, no one had attempted this till he got the idea.
I‘m sure that there are a lot more applications for this type of technology, including in our own market, where the agents are the middlemen. Perhaps, at some time in the future, someone will be put together a system that will match those with opportunities with those who want them.
The bookmakers don‘t like this idea at all, and would like the Government to outlaw it.
Betfair takes a commission of 2% to 5%, and only from the winner. The loser pays nothing. This commission is a lot less than the bookmakers normally take.
Usually, 99.99% of people who take in betting lose over the longer term. The odds are loaded against them. Even if they do win, the bookmakers will bar them.
Betting Against Each Other
However, with this method, you are only betting against some other ordinary punter like yourself. If you are a little better than average, i.e. enough to cover the commission charges then you could potentially make a living at it.
There must be plenty of untrained people offering daft prices for sporting and other events on Betfair.
The Government are monitoring this, but there is unlikely to be any laws on the subject, so those people who think that they are good can make hay at least till then.
There is an argument that those people acting as bookmakers on the site should be taxed, but they aren‘t at the moment.
Andrew Black got the idea while he was a software developer for British Intelligence. It is good to see one of our community doing well and it would be good to see even more in the future.
We will continue to look out for examples of success, and if anybody else knows of any, please get in touch.