Betfair Group plc (LSE: BET) is the world's largest Internet betting exchange. The company is based in Hammersmith in West London, England. In 2011 Betfair went offshore and was registered and licensed in Gibraltar and since 9 March 2011 its betting exchange operate under this offshore licence. Since Betfair was launched in June 2000 it has become the largest online betting company in the UK and the largest betting exchange in the world. Betfair claim to have over 4 million customers and a turnover in excess of £50 million a week. The company employs about 2300 people worldwide and 1200 in the UK.

A betting exchange allows gamblers to bet at odds set and requested by other gamblers 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 percent better odds than those offered by a traditional bookmaker. Betfair charges a commission on all winning bets, which is set at 5 percent 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 percent. However, controversially, Betfair has introduced a "premium tax" which is targeted at those who satisfy the following conditions: "If, over the lifetime of your account, you satisfy the following criteria: Your account is in profit; Your total charges generated are less than 20%† of gross profits; You bet in more than 250 markets." Higher rates of premium charge can be incurred if you satisfy the following conditions: "Lifetime net profits exceeding £250,000; Lifetime commission generating less than 40% of lifetime gross profits; Betting in more than 1,000 markets." This means that customers who qualify for this, will be asked to pay between 40% and 60% on all future exchange activity. This has been "met with a mixture of outrage and transparent threats to take business elsewhere." Betfair's former promise that "winners are always welcome", was quietly withdrawn when the first 20% premium charge was introduced in 2008, clearly this no longer seems to apply to this group and that's a shame.

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.

Read more about BetfairHistory, Outside The United Kingdom, In-play Betting Controversy, Premium Charge, Controversy, Other Services

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