Entain PLC, the owner of powerhouse UK betting brand names, consisting of Ladbrokes and Coral, has now dumped its betting exchange Betdaq, which it offered back to Dermot Desmond recently.
A brief history of Betdaq
In 2000, Irish business owner Dermot Desmond founded the Global Betting Exchange (GBE) with a vision to create a platform where punters might wager against each other. From GBE, the sports betting exchange Betdaq was released in 2001.
A few sponsorship offers, consisting of one with Celtic FC and another with Kempton Park Racecourse, saw Betdaq firmly establish itself as the second-largest online wagering exchange behind Betfair by 2013, albeit with just a 7% market share. Still, this was enough to lure wagering huge Ladbrokes to buy the Global Betting Exchange and its assets for EUR30m from Desmond in the exact same year.
Despite being backed by Ladbrokes, Betdaq has actually never got on par with Flutter Entertainment's Betfair. It's played with various promos, such as using 0% commission, but most have actually just led to a temporary bump up in users, with absolutely nothing continual. Contributed to that, Betfair and Paddy Power formed a majority merger, which added substantial marketing power to help keep Betfair at the head of the pack.
What is a wagering exchange?
Betting exchanges were indicated to change the betting industry, and while they need to a degree, we can't state they have actually fallen the big bookmakers, like some thought they might. In a nutshell, a wagering exchange is a peer-to-peer wagering platform. Punters bet against each other instead of wagering versus a bookie.
This style of wagering has advantages and disadvantages. The main benefits are that the prices are usually much better on an exchange because there is no bookmaker's margin to consider; likewise, winning wagerers do not have their accounts restricted - something that is known to take place if you're too effective against a bookmaker.
The drawback of exchanges is that they only flourish if enough users are supplying liquidity to the marketplaces. Additionally, they can be a little overwhelming for beginners who do not comprehend how backing and laying bets work.
What's Desmond's Plan?
For the time being, we can only hypothesize why Desmond has actually chosen to turn the clock back and obtain Betdaq again. Our sensation is that he's noticed a chance opening up in the market that he can benefit from. The charge paid for Betdaq is undisclosed, so we can't state if the cost was simply too good to turn down or not.
What we do understand is that Betfair has faced increased criticism over its commission rates for both moderate bettors and professional traders, such as Caen Berry. Essentially, Betfair is creaming off as much as possible from bettors who succeed here and there, along with drawing from its huge players who have made numerous thousands over the years. On top of this, there are now limitations as to how much under 25s can win.
Whatever the reason, Desmond is taking on a major challenge if he desires Betdaq to seriously rival Betfair. The excellent news for punters is that it keeps competitors healthy. No one desires a Betfair monopoly where they can continue to call all the shots. For that factor, we want Dermot and Betdaq all the very best.
