- Date.
- 05 August 2009
- Publication.
- News
- Author.
- Balderton
Betfair Profit Jumps as Users Deposit More Than $1.7 Billion
Betfair Ltd., which enables bettors in 140 countries to bet with each other over the Internet, reported a 29 percent increase in profit and said user deposits in the last year exceeded 1 billion pounds ($1.7 billion). Earnings before interest, tax, depreciation and amortization climbed to 72 million pounds, the closely held betting exchange said today in a statement. Revenue, or the commission charged on customer winnings, rose 27 percent to 303 million pounds, the company said.Founded 10 years ago by Andrew Black and Edward Wray, Betfair says it now processes more than 6.4 million transactions a day, more than all Europe’s stock exchanges combined.Chief Executive Officer David Yu said that the debt-free company has 133 million pounds of cash to fund expansion, and ruled out the prospect of an imminent initial public offering. “The business has never been in better shape, despite the biggest recession the world has seen,” Yu said by telephone. Betfair provides a medium for bettors to wager between themselves on line, rather than with a bookmaker. The London-based company receives commissions on all winning bets, usually of between 2 percent and 5 percent. As of the end of April, Betfair held about 240 million pounds of customer money in ring-fenced accounts.
About 3,000 pounds a minute is deposited onto the site by users to provide funds for betting, Chief Financial Officer Stephen Morana said. The year’s most-traded event was the men’s Wimbledon tennis final between Roger Federer and Andy Roddick, Morana said. More than 50 million pounds of bets were matched on the five-set marathon, he said, about twice as much as was wagered on soccer’s European Champions League final. Yu said there are “no plans at the moment” for an IPO. Betfair hired Goldman Sachs Group Inc. and Morgan Stanley as financial advisers in 2005 and said it was considering selling shares to the public. Softbank Corp., a Japanese high-speed Internet service, bought a 23 percent stake in 2006.
