The player who revolutionised gambling
This is not just another online gambling success story – this is the story of the man who created a different bookmaker, different from the other companies on the market! Andrew Black laid the foundations for one of the world’s most popular sports betting markets – Betfair, a company that has learned to be a leader since its founding.
The early years of Andrew Black
Born in 1963, Andrew Black graduated from King’s College School in London and decided to continue his studies at Exeter University, majoring in Computer Science. However, his studies at university were not complete as Andrew was keen on betting and spent most of his time in local betting shops rather than listening to his lecturers.
One interesting fact is that Mr Black’s father was an outspoken opponent of gambling and was involved in many campaigns against this activity and the laws that allowed it. Had Andrew followed his father’s views, he might not have been able to present one of the best business ideas.
Before the idea was born
Andrew was forced to work for years as a simple employee for various companies.
At one of them, the American company Track Data, he was employed in customer service and development.
However, this job did not bring him the desired income and after a while he turned to betting again. The sport he used to bet on was horse racing, and once his colleagues saw that Andrew was a pretty good specialist, they even started following his predictions. Andrew Black is known to have won £25,000 in 1992 with a bet of just £20 after correctly guessing the winners of 2 of the UK’s major horse races.
These profits allow him to fulfill one of his dreams – to buy a racehorse! After Andrew’s predictions continue to be quite successful, he chooses to leave his permanent job, earning less than £30,000 a year.
Black continued to develop his skills as a punter, but at one point his losses started to spiral out of control and he had to find steady work again. He started out as a trader at Boxall, but only stayed there for a year. This was one of the turning points in Andrew’s life, because after this point he started his own career.
What is the idea behind Betfair?
Andrew Black’s life has been full of ups and downs. After many career changes, successes and failures as a professional bettor, Andrew Black has taken action to create his own software company that has won partnerships with many other organizations.
Experimenting with different betting software, Andrew began to refine the idea of a bookmaking business. At one point, he decided to take a risk and put all his savings into his idea for what he called Sports Exchange. However, his £50,000 didn’t come through and Black had to look for other investors.
He found one in the person of Edward Ray – the brother of Andrew’s best friend, Jeremy. Edward was an investment banker and was definitely able to help develop the idea. After developing the business idea into a project, they sought new funding from venture capital funds. In addition, they both had wealthy relatives and friends from whom they raised quite a large sum, which with their funds amounted to £1 million! This sum was enough to allow the Betfair project to see the light of day in 2000!
What exactly is a sports exchange?
At that time, people were able to bet on various sporting events and markets that certain bookmakers offered.
The idea of Andrew Black and Edward Ray was to create a different betting model. A sports exchange is an online platform that allows different people to offer markets and odds. This way other people can bet their money on these odds and markets.
The model is largely borrowed from financial exchanges but has been implemented in sports betting. This model offers people a new way of betting that in many cases allows them to bet better and get higher odds than those offered by the various bookmaking companies.
Betfair’s profit comes from the commissions it collects on each settled bet. This business model works the same way today, with Betfair continuing to be the leader and offering the best sports betting exchange in the world, and the commission they have is on every winning bet of 5%.
However, a very important strategic step was taken by Andrew Black, which proves to be key for Betfair to this day.
Around the same time that Betfair was established, another company, Flutter, appeared on the market using a similar method of taking bets. A very successful move for Andrew Black and his colleague, Ed Ray, was the acquisition of Flutter in 2001, which gave them a major hold over Sports Exchanges with a 90% market share!
What changed in Andrew Black’s life since this successful project?
Just 2 years after the company was founded, the two founders Andrew Black and Edward Ray were awarded the title of Young Entrepreneur of the Year.
Over time, the company began to offer casino-style betting, as well as multi-sport betting and, in the traditional way, fixed odds.
In 2010, the company was listed on the London Stock Exchange with a share price of £13. That means its total value is £1.4 billion! Andrew himself owned 15% of the shares, giving him around £200 million.
And when Betfair was delisted from the stock market, following its acquisition by Paddy Power in 2016, one share of the company was worth £44! Andrew Black not only created, but has also helped Betfair develop enormously over the years. Outside of that, he has maintained his interest in horse racing.
Black has invested in various technology areas in the UK and has also emerged as a professional bridge player. Established by him, Betfair is now one of the leading bookmaking companies in the world and the sole leader in Sportsbook betting. The company continues to evolve and, having been acquired by its new owners, continues to innovate in the sports betting industry. It is one of the founders of the Cash Out option and also of Features such as Acca Edge and Price Rush!
Speaking of Betfair, it’s worth mentioning that in Bulgaria, unfortunately, it doesn’t have a license and we can’t play there, but we do have access to the Orbit Exchange, which is accessed through the Betinasia broker, which we have a video about.
In our betting course that we will be releasing in September we have several videos on how betting exchanges work, we have a full overview of Orbit Exchange and much more.
If we missed something, add it in the comments