You Bet: The Betfair story: how two men changed the world of gambling
By Colin Cameron
If you live outside the gambling tent, Betfair is a business that will leave you cold, just another name that has popped up in the internet age to lure slices of business away from the high street betting shops of Ladbrokes and William Hill.
Inside the gambling arena, however, Betfair is the newcomer that out-ranks all. It is the true revolutionary, the punters' friend with a radical idea - remove the bookie from the equation by enabling individuals with opposing views to strike a wager between themselves.
The web has let this happen on a wide scale, but it's the old-fashioned quality of person-to-person betting - two parties making an arrangement - that makes it powerful. It's the force of mathematics at work. Betting exchanges like Betfair tend to deliver better prices for the punters. For example, Mon Mome, this year's '100-1' winner of the Grand National, had a starting price on Betfair of 142-1.
From a business perspective, the beauty of exchanges is their tendency to be natural monopolies. Liquidity, the most precious resource of any form of exchange (bets or shares), tends to flow to one place. So it is safe to assume that Betfair will be around for some time yet. A corporate biography is certainly in order. Just don't expect a story of thrills and spills.
Unfortunately for author Colin Cameron, Betfair hasn't suffered many crises on its path to success. The element of jeopardy - as film-makers call it - is missing. Betfair has looked like a winning proposition for most of its nine years; in fact, ever since the rival Flutter exchange agreed to be taken over.
'Of course, Betfair was always going to work,' says co-founder Andrew Black at one point in this book. It is only half in jest, but the idea at the heart of Betfair really was, and is, that good.
Cameron's book is at its best explaining how market dynamics and changes to the taxation of gambling in 2001 played in Betfair's favour, but the reader is left craving more human touches. The most fascinating revelation about Black is that he has suffered headaches all his life. How does an entrepreneur cope with such an affliction?
And who are all these private gamblers laying and taking odds on Betfair's website? A few who have reached semi-celebrity status are introduced, but this book fails to explore the stories and lives of those in the trenches - for instance, the gamblers now populating premises dedicated to providing the best and fastest broadband environment for exchange-betting.
Are these people really modern-day versions of the small-time gambling addicts hanging around traditional bookies' offices? How many are actually making money by approaching betting as a form of trading? If they're making profits, how much? This area is left unexplored, which is a shame: Cameron seems too much in awe of Betfair's success. Greater exploration of the effects on society of betting exchanges would be welcome.
Still, business readers can sit back and admire the professionalism that Betfair has displayed in its dealings with regulators, sporting bodies and the media. The wisdom of allowing ordinary punters to lay bets - in effect, betting on a horse to lose - is not easy to sell. Betfair has overcome resistance by being open. In my limited journalistic dealings with Betfair, it has usually succeeded - it tends to give straight answers to straight questions.
This book makes it easy to understand why the UK government gave the green light to Betfair, ignoring the howls of protest from the established bookies. Betfair marshalled good arguments, did its homework and displayed good judgment on which fights to pick. Unlike online poker sites, it did not try to tell the US government that its gambling laws belonged in the dark ages. That was a good call.
But whether Cameron needs to devote so much space to Betfair's successful lobbying and legal efforts in Australia is another matter. The casual reader may find these passages too dry. By contrast, the departure of a hired chief executive is, strangely, skipped over.
But, as a David-versus-Goliath corporate story, this book should inspire entrepreneurs everywhere - even in today's depressed stock markets, Betfair would probably be worth £2bn if it floated. Black and co-founder Ed Wray are quoted extensively and provide nuggets of common sense. The real moral, though, is straightforward: if your idea is good enough, you've cleared the biggest hurdle to success.
Nils Pratley is financial editor of the Guardian