Bet Exchange News - February 2004

It's a very very mad world

Betfair found themselves embroiled in controversy when the cover version of Tears for Fears' Mad World pipped the Darkness to secure the prestigious Christmas number one spot in the UK singles market. Having been picked up by a number of radio DJs early in December, the single was given increasingly heavy airplay, and an astute Betfair member asked for the artist Gary Jules to be added to the market. A number of bets were matched at odds ranging up to 120, enabling the backers to lock in some decent paper profits as the song gained prominence and the odds tumbled.

On December 1st a Betfair member became aware that the official name of the artist would be "Michael Andrews featuring Gary Jules" and he requested that this be added as an additional runner in the market. If Betfair had realised that this represented the same song that backers and layers had previously bet on they would surely have declined the request, but in what appears to be a major blunder, they missed this crucial point and as a result there were two contenders in the market with the same song. This situation continued for a while before Betfair took the only realistic option left to them and voided the bets on Gary Jules, leaving those backers who had taken advantage of the early odds high and dry.

Whilst the early layers breathed a collective sigh of relief the disbelieving backers were outraged, and the forum was full of posters proclaiming the inequity of the situation. The following contribution from Dougs was typical:

I've backed the front two in the betting, so I'm not talking from pocket, but this is an unacceptable switcheroo from Betfair. The record was billed on the radio as Gary Jules, the song is on a Gary Jules album, and was quoted by ALL fixed odds firms as Gary Jules. As someone correctly points out, there was no M Andrews feat G Jules option until today - who do they think people have been betting on? Common sense must surely prevail - I presume someone has been in contact with IBAS.

Can you imagine the tension in the Betfair Special events team as the final week unfolded? Whilst this was always going to be a hiccup, it would have soon been forgotten if Mad World had only made it to number two, and for most of the week, it appeared that the Darkness would come to Betfair 's rescue. Unfortunately for Betfair , on the final Saturday Mad World rallied and managed to secure the coveted number one position.

Straight away the bitter postings started again and the story was picked up by the Racing Post. Betfair 's spokesman Tony Calvin commented:

"The market was quite clearly on which artist would be top and not which single or song. When Gary Jules was not announced as the artist, we were faced with a dilemma. If we settled him as a winner, layers could legitimately claim they had laid a loser as `M Andrews featuring G Jules' was the winner."

Unfortunately this statement was seen as something of an own goal for Betfair . Up until now the layers must have been counting their lucky stars, but this statement effectively said that Betfair had deprived layers of legitimate winnings. No doubt IBAS are now picking their way through the claims of early backers and layers of Gary Jules.

Alistair Campbell

The Gary Jules case has highlighted the pitfalls of running some of the special events markets. There have been a number of other controversial decisions made by Betfair on these markets over the past months. Before Gary Jules the highest profile case was probably the Political Scandal market where Betfair listed a number of public figures and invited members to bet on the likelihood of them still being in office on a specified date. The problem arose when Alistair Campbell announced his resignation, but close inspection of the market rules indicated that for this bet to be settled as a winner it required an official announcement from Downing Street , something which had not come. Betfair suspended the market, but when layers pointed out the small print, they reopened it. This created the curious situation where members placing new bets were effectively gambling on the way in which Betfair would interpret their own rules. On the day the market closed Betfair apparently telephoned Downing Street and were told that Campbell was no longer in his job and Betfair accordingly paid out to the backers. Layers continued to argue that this did not constitute an official announcement, but to no avail. On balance this seems to me to have been the right decision, but I'm glad I didn't have to call it. Thankfully these hiccups do not appear to have put Betfair off running Specials markets, as these offer excellent opportunities to exchange bettors, although they do highlight the need for caution at all times.