You Bet: The Betfair Story and How Two Men Changed the World of Gambling. Colin Cameron
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to know the size of the market as a whole. I wasn’t preoccupied with market share over and above achieving that which was big enough for us to mean that if we did a half decent job we would be alright.’
Did spending an extended amount of time with Andrew Black not shape Wray’s thinking? ‘I massively underestimated the betting market’s scale and size,’ Wray admits, with a heavy sigh. He finishes this with a resigned chuckle. ‘I remember telling Bert my views on what we might need to trade and the potential for this. He laughed. “Look at me and what I bet”, he said.’
Black, having been a professional punter, knew the scale of bets that his new venture could tap. In 1992, he collected £25,500 from a win-double betting on High Low to win the Lincoln Handicap at 40-1 and Party Politics to follow up a month later in April’s Grand National at odds of 25-1. Yet, Black was also, to a large extent, thinking purely within his own world rather than about the prospect of taking a share of the betting market as a whole. Wray recalls his partner’s mindset at the time. ‘Bert simply thought, I am a punter, the bookmakers offer a shocking service,’ he laughs.
Black admits that there was an academic, almost purely intellectual side to his effort in establishing Betfair. The project as a whole, like his assessment of the betting industry as a whole, was also coloured by personal considerations. Perhaps more than garnering a better deal for punters, he had something of an eye on establishing his ‘legacy’. He recalls: ‘I decided I wanted to come up with something for myself that would have an impact. I had worked on some fairly creative stuff in my time, the most creative of all for the government and Ministry of Defence using fairly heavy mathematical simulations. I wanted to come up with something that was special. Probably Internet-based.’
Press Black on exactly what he did for the MoD and he is a little vague, either because he cannot say, or does not want to say. Whichever, he is tantalisingly remote (as only he can be). Overall, Black – seemingly on ground which allows him more freedom to engage with the public about his endeavours – considered the betting market in 2000 to be ‘dull’, with the bookmakers’ take on the Internet ‘predictable’. To Black’s mind, they simply wanted to transfer their existing business to the web. In other words, the Internet would become just a very small corner of their overall retail business. ‘They knew they had to go online but the way they did it showed their lack of imagination’, he maintains.
Black had begun by relaying to a select few that Betfair ‘was a nice idea’. When no one seemed interested, he raised the stakes, in response to meeting such indifference. ‘Then I took to saying, this is going to be a big Internet idea. The more time went on, the more outspoken I became.’ Even then, Black ultimately fell short of gauging the full impact of his baby. Moreover, even those who felt sufficiently enthralled to join Black and Wray at Betfair had limited ambition.
Would you have quit a handsomely paid, prestigious, relatively secure job to work with Black and Wray? In the spirit of person-to-person betting, what would the odds in your favour need to be? Mark Davies, a colleague of Wray’s at J.P. Morgan joined the company – at the time, ostensibly Black and Wray along with Sean Patterson, finance director – a few weeks ahead of launch as Head of Business Development. He would eventually rise to take the post of Managing Director (corporate affairs) and today, in that role, remains immersed in the operation.
Davies, whose father is the acclaimed sports commentator, Barry, was drawn to Betfair because of the concept’s simplicity more than anything. ‘Before we launched I guess I knew betting was a slightly murky world,’ Davies laughs.
‘I was an occasional punter. Looking back, it is surprising how few of the founder team were mad keen punters. Most days, I would wander past my local William Hill shop. I’d actually go in on Grand National day so that made me no more than a classic National punter. I don’t think I had bet on a horse at all other than that race.’
Along with Black and Wray, Davies – who does boast of having won money on Manchester United winning the Champions’ League in 1999 – cannot claim a concise analysis of the betting market compelled him to take a chance. ‘It was the trading side for me. I was trading for a living at J.P. Morgan. This was also trading. I understood that. I looked at the prototype for Betfair and thought, my god, that is such a simple idea, so well executed. If one in ten, or even one in 100 react the way that I am reacting to it then it is a viable business. The overall betting market? I didn’t really think about it. It was the simplicity of the idea that captured your mind.’
So Davies was betting on best odds of 10-1. Would anything from between 1 and 10 per cent of the market therefore be a success? Ed Wray was eyeing just a similarly small corner of the betting market for Betfair. It was enough for him, like Davies, to turn his back on what had been previously most gainful employment. Black, mean-while, was the more intimately involved with both the concept – as the creator – and the world of betting, itself. Today, he laughs. On one hand, he maintains he had a vision. On the other hand, he sees himself as a bit of a buffoon.
Not the sort of person, Black shrugs, who is going to come up with the next brilliant idea that would make millions over and over, year after year.
SPREAD THIN
Bookmaking is sometimes referred to as the world’s second oldest profession, just on the heels of prostitution. For years in Britain, both taking bets and what is generally accepted as a vocation with even more years against its name than turf accountancy remained tied up in preventative law and restrictive practices. Likewise, worldwide, with varying degrees of tolerance. Certainly, these were not trades for the high street. Then in May 1961, when the Betting and Gaming Act took effect, betting shops were, at least, granted above-board status in Britain. Though there were restrictions on what these new establishments could offer customers and how they might operate, premises that could accommodate anyone over a certain age wanting a bet were soon widespread. Within twelve months more than 10,000 opened for business, nationwide. With this, gambling went mainstream and Britain became a country more densely populated with places to bet than anywhere else in the world.
And after that breakthrough? Now, looking back over nearly half a century of history, the conclusion is unavoidable; largely no change or significant innovation in the betting industry at all over the thirty years that followed legalisation. Between 1961 and 1991, interiors of betting shops enjoyed a modest splash of paint and the addition of some contemporary fixtures and fittings (if that adequately describes television sets and actual seats, initially outlawed). But externally, windows still had to be blocked out to avoid potential customers being drawn in against their better judgement (also, betting shop regulars noted, maintaining privacy for anyone who didn’t want to be seen). Drinks of any sort were only allowed after enabling legislation became law in 1986 and then only the likes of coffee and tea from a machine. As for alcohol, though a pub would most likely be close by – the majority of betting shops in Britain had and have today urban locations – a beer, or, as betting often requires, something stronger, remained beyond the threshold of betting shops throughout the UK. As it does today. Back in the 1980s, bookmakers’ doorways would sometimes be graced with lame, thin, plastic coloured drapes that might otherwise have been made up into hula-hula skirts. They merely raised expectations that there might be something colourful through them. Instead, for most of the first three decades following the formal creation of the licensed betting shop, drab spaces accommodated die-hard, regular gamblers. These punters were denied a full range of refreshments for fear that anything too homely might be cause for the weak minded to extend their stay.
Much of this was out of bookmakers’ hands. They couldn’t just break the law (could they now?). Some restrictions did eventually pass into history. The arrival of television coverage, along with tea and coffee, in 1986 ahead of the thirty-year anniversary of legislation that brought betting shops into being also proved, with hindsight, a relatively major watershed. Not only did it bring to an end the frustration of listening to radio commentary and not even hearing so much as a mention of the horse carrying your money, betting shops became places of extended stays, and correspondingly