The first retail and wholesale brokerage and clearing house for the sports betting industry in the UK announced that it will use the net proceeds of the placing to launch a more aggressive marketing campaign, to expand the trading room facilities and to develop internet and mobile services.
Betbrokers, which had originally hoped to raise £5m, operates a telephone intermediary brokerage service, which allows retail and wholesale clients to confidentially take or lay bets of any size and of any type. Through its network, Betbrokers seeks the best available price in the market for its clients and endeavours to match each bet with a counterparty.
Established in 2003, Betbrokers provides retail clients a single point of contact eliminating the requirement to open and then manage separate accounts with each different bookmaker and betting exchange. Betbrokers’s network of bookmakers and exchanges enables it to accommodate larger and more complex types of bets. Betbrokers also offers additional services such as information about odds movements in the market.
For wholesale clients, which include bookmakers, betting exchanges and corporate clients, Betbrokers provides a risk management service which allows them to balance their books by placing certain bets to lay off their risk or hedge against bets they have already taken. In addition, Betbrokers offers a facility to enable clients to ‘unbundle’ multiple bets in various events through the use of derivatives. Betbrokers also provides instant settlement and a clearing facility across bookmakers and exchanges.
Betbrokers generates its revenues by charging a standard 3 per cent commission on the value of stakes handled by the company. Betbrokers currently has over 400 retail accounts and over 70 wholesale accounts. The average size of bet in the first 10 months of trading increased from approximately £160 in October 2005 to approximately £1,100 in July 2006.
The company has completed the first stage of its strategy and considers the next stages of development, which will include the provision of spread betting services, data services and trading tools, achievable through organic growth, although suitable acquisitions will be considered should the opportunity arise.
Chairman and CEO Wayne Lochner commented: “We are delighted that the flotation has been completed successfully and are pleased with the levels of support received from our new shareholders. Our recent award, as voted for by our industry peers, for “start-up operator of the year” at the prestigious eGaming Awards affirms our belief that Betbrokers is a truly unique business. Betbrokers is the first company in the UK that allows retail clients to trade with numerous bookmakers from one single account and also enables bookmakers to deal with each other anonymously to assist in laying off risk.”
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