Betfair continues to be one of the UK's biggest internet success stories: the all-conquering betting exchange saw revenues jump 27% to £303m in the year to April, at a time when its high street rivals have seen income slump. In fact, its revenues have now doubled in the last three years, despite investing heavily in expansion overseas - it continues to pick up market share and attract new customers, and without piling any debt onto the business. That would be a pretty impressive achievement at the best of times, but it's even more so at a time when consumer spending has been shrinking across the board. Betfair is turning out to be a real game-changer for the gambling industry...
There were more impressive figures from Betfair today: behind that big rise in overall revenues, there was a 20% jump in its sports division (where it's now Europe's biggest online operator) and 31% growth in its games division. It's also making more and more money overseas, after a big push in recent years - nearly half of its revenues are now from its international business. As of this year, that now includes TVG Network in the US (the largest wagering business that's actually legal - bought for $50m). So if the US government eventually gets out of Vegas's pocket and relaxes its online gambling rules, Betfair will be quids in (dollars in?).
But despite this, Betfair still managed to chalk up a profit of £72m, up 29%. All in all, it now has 652,000 registered users (up 25% on the previous year), with some £240m sitting in their online accounts. Yesterday bookie William Hill issued a profit warning, saying that the recession was keeping punters away - but by the looks of these numbers, some of them are staying at home and going on Betfair instead. The online exchange model, which allows people to act as either bookie or punter, clearly looks like a better value option than the high street (and since Betfair takes its commission whatever happens, it doesn't mind either way).
In other words, the Betfair concept - and almost as importantly, its whizzy software - seems to have changed the way people think about gambling. Not bad for a company that started less than ten years ago. In fact, these results are so good that there's now talk of a flotation: about half of the business is owned by a Japanese bank and private equity, and at some point they'll want to cash in on what looks like being one of the best investments they'll ever make...
In today's bulletin:
Lloyds sinks to massive loss as it writes off £73m per day
Betfair worth backing as revenues soar again
Editor's blog: Machismo has had its day
Could the recession cause two decades of income loss?
Seven ways to... Manage interns better