Swedish 'market maker' turned over pounds 500m on the exchanges.
A LITTLE-KNOWN Swedish company turned over nearly pounds 500 million on betting exchanges, including Betfair and Betdaq, in the first six months of 2008, the Racing Post can reveal.
Stockholm-based Betting Promotion Ltd, which describes itself as a "market maker" who "puts up prices on markets so that customers always have plenty of opportunities", turned over more than pounds 498m in the period from January to June 2008, showing an operating profit of around pounds 558,000.
Listed on Sweden's Nordic Growth Market, Betting Promotion, licensed by the Malta Lotteries and Gaming Authority, has been trading since April 2003, having started development work in June of the previous year.
In May of this year it signed an agreement with Betfair, published on the stock exchange in Sweden, to "provide liquidity on a large number of markets".
While this may appear similar to the seeding of markets, a practice Betfair have always denied, the exchange's corporate affairs managing director Mark Davies explained: "Our customers who consider themselves 'liquidity providers' get all the profit and incur all the loss of any given bet, just like any other customer would. Whatever they do, there is no way that Betfair can lose money as a result."
Davies added: "I cannot talk about any individual clients, I am afraid. It is not news that we have people on the site who are big players and are therefore providing liquidity."
Johan Moazed, CEO of Betting Promotion, said: "We have agreements with exchanges, but they vary from exchange to exchange and I can't provide any details on the agreements."
A financial study of the firm, carried out by behavourial analyst RedEye at the end of 2006, claimed that Betting Promotion had grown quicker than Betfair in the previous two years, and forecast further rapid growth.
Figures available at the time of the RedEye analysis revealed that Betting Promotion "handled"
43,000 bets per day, winning money on approximately 54 per cent of all events. The firm had not shown a loss on any of the previous 11 quarters, with the biggest loss incurred on any individual event being pounds 96,000.
Although Betting Promotion did move into horseracing markets after the analysis was carried out, Moazed said it was "a market sector we no longer support", and in 2007 some 78 per cent of their business revolved around football betting, with the largest individual percentage - 15 per cent - provided by the English Premier League.
When asked whether Betting Promotion would be subject to the new premium charge, which has resulted in Betfair's biggest winners paying 20 per cent commission on winnings, Davies said: "We can't talk about which customers specifically would pay the premium charge but, as we said in the Q&A on the Betfair forum, everyone is liable."
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|Publication:||The Racing Post (London, England)|
|Date:||Oct 7, 2008|
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