Betfair to reinvigorate business by focusing on regulated markets onlyDecember 17th, 2012 / lee
Online betting exchange Betfair are reading to sacrifice around a quarter of its profits as they look to withdraw from a dozen unregulated companies. This has been the stern new policy from new chief executive Breon Corcoran. After already taking a hit in profits in the first half of the financial year, Corcoran has decided that pushing on with operations in countries which have legal grey areas is no longer in the best interest of the betting exchange and their future growth. The betting exchange are keenly preparing to “reinvigorate” their business by changing to a new new strategy.
Betfair are looking to gain a foothold in the iPoker network thanks to an agreement with Playtech. A company statement explains: “This gives Betfair flexibility to choose the best network for its customers on a country-by-country basis and is particularly valuable in markets with ring-fenced liquidity such as Spain and Italy.”
But of the remodelling of the betting exchange has been to withdraw from operations in territory which are complicated legally. Along with the backing out from Germany, Cyprus and Greece, Betfair will also look to drop marketing and investments in other countries (described as a “long list”) such as Canada and Russia. Corcoran is ready to take around a 24% hit in their revenues, but is hoping that a firm focus on developing their services in regulated environments only will swing the business back on an upward trend.
The growth of the Betfair betting exchange should also prop up the remodeling, along with the more stable markets that Betfair are already in. The streamlining efficiency will mean that Betfair has less of an international presence, but that should be a positive for the exchange. Betfair has already sold their minority stake in social gaming business Kabam, which developed a produced based on The Hobbit movie to Time Warner.
“Pressing the reset button is painful,” Mr Corcoran said, adding that the board thought it was the “right thing to do” to concentrate on stable sources of revenue.
“I’d hope that in two to three years’ time, Betfair is back talking about growth rather than cost-cutting,” he said.