Betfair Paddy Power Merger Makes Headlines

03/25/2016
By Pamela PattersonGoogle
At its inauguration, Betfair’s founders famously engineered a mock funeral to mourn what they claimed would be “the death of bookmaking.”

Just eighteen months later, Betfair became an indisputable market leader in exchange betting and was growing at a rate that spelled doom for the bookies.
Since then, Betfair has remained at the very top of the gambling market, with its annual accounts swelling year on year. It has added to its range of gaming products, employs a staff of 2000 across its offices worldwide, and has started buying into the US market. In effect, Betfair is a success story through and through.

Since its launch fifteen years ago, Betfair has made a name for itself as one of the biggest players in the global gambling market, and it shows no signs of slowing down. Rather than doing away with bookies, the betting exchange has solidified its stance by merging with one—Irish bookmaker, Paddy Power—in a surprise deal that left the latter with 52% of the shares. Even in an industry that is expected to amalgamate, this move has created resounding shockwaves.

Last month, after the news emerged of talks of a possible merger between Coral and Ladbrokes, Paddy Power’s PR team joked that it was planning to join up with Betfair and change its name to Betty Power. This “joke” now seems prophetic. By merging together, Betfair and Paddy Power are set to create a business conglomerate that will arguably rank as the biggest in the gambling world, not to mention the most lucrative, forward-looking and aggressive.

Founded in 1988, Paddy Power is a relatively new company, and it does not rely as heavily on high-street shops as do higher ranked British bookmakers like Ladbrokes and William Hill. When news of the merger circulated on Wednesday, the shares of both companies shot through the roof, as the market sensed their amalgamation offers both parties significant benefits.

However, while shareholders will certainly capitalize off the merger, it does not seem as promising for punters. Mergers between large competitors limits the choice in the market and can, over time, nudge up margins. This particular merger, however, brings up nagging questions that loyal Betfair customers wasted no time raising: does it mark the start of the decline for exchange betting, what with Paddy Power slowly reinstating the historic supremacy of bookmaking?

 For the sake of argument, it may be claimed that true exchange betting died out in 2008, when Betfair announced a “premium charge” of 20% on regular big winnings, raising the bar as high as 60% in some cases. The decision to remove cash directly from the accounts of exceptionally large winners was a serious blow to its meticulously groomed image as a place that welcomed winners. The Premium Charge, however, does not keep smart players from making big money; it simply slows down the process.

British and Irish bettors enjoy a vast range of options, with comparatively low margins thanks to the competition. Betfair and exchange betting will not disappear once the merger takes off the ground, and its prices on popular events will continue to keep regular bookies honest. Concerns that bookmaking is dying a slow death have finally been proved unfounded.
Share |

Latest News:

Subscribe for FREE
Enter your details for EXCLUSIVE No Deposit Casino Bonuses updates sent directly to your email.

Top 10 Online Casinos

Rank Casino Logo Casino Casino Review
1
Slots of Vegas
Play
Review
2
Lucky Red
Play
Review
3
Aladdin's Gold
Play
Review
4
Win A Day
Play
Review
5
Slotland
Play
Review
6
Cool Cat
Play
Review
7
Prism
Play
Review
8
High Noon
Play
Review
9
Sloto' Cash
Play
Review
10
Club World Casino
Play
Review