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Story URL: http://www.silicon.com/research/specialreports/gambling/0,3800010160,39125976,00.htm

William Hill hits out at online betting exchanges
It's bookie v bookie... so who'll be offering odds on the outcome?

By Will Sturgeon

Published: Wednesday 17 November 2004

UK high-street bookie William Hill has hit out at online betting exchanges Betfair and Betdaq, accusing the latter of spreading "scurrilous insinuations" about its fixed odds rivals and accusing both of misleading the industry and consumers.

William Hill's anger was sparked by the events which followed the demise of online betting exchange Sporting Options on Monday.

Perhaps sensing further criticism aimed at the controversial betting exchange model Betfair and rival Betdaq moved quickly to reassure customers that their money is safe in ring-fenced accounts.

But William Hill has now hit back at what it sees as an insinuation made by Rob Hartnett at Betdaq, speaking on racing channel At The Races, that a number of fixed odds bookies aren't doing the same thing and offering a similar level of protection to customers.

A spokesman from William Hill said: "Statements from the other exchanges have scurrilously insinuated that the leading UK fixed odds bookmakers may not be prudent enough to 'ring-fence' clients' deposits."

Referring to the unfortunate demise of Sporting Options, he added: "The representatives from these firms have yet again tried to make capital out of a dire situation for punters with their 'smoke and mirrors' PR spin."

But that accusation was one which Betdaq's Hartnett certainly took issue with, choosing a "pots and kettles" analogy.

"I love the notion that William Hill should accuse us of using this debacle to generate PR. To me that is exactly what they are doing," said Hartnett.

At the heart of the argument is the issue of financial liability, with William Hill suggesting the betting exchanges may be talking a good game, mentioning phrases such as "ring-fenced accounts", but in truth offer nothing like the guarantees an established business such as William Hill can offer.

The spokesman for William Hill said: "While having a nice reassuring tone to it, the exchanges haven’t actually clarified what they mean by 'ring-fenced' and one suspects that it amounts to little more than holding deposits in a separate account from the company's assets."

However, Hartnett expressed surprise that William Hill would quibble over such a detail, adding "that is exactly my definition of ring-fenced" and subsequently accusing the spokesman of being both "pompous" and "ridiculous".

"We keep all our customers' money in a separate business account and we keep it totally separate from the daily running of the Betdaq business," he added. "Also as a betting exchange, because all bets placed through our site are between one punter and another, we know exactly how much money may need to be paid or withdrawn at any one time and know exactly how to build our ring-fence."

Betfair, the largest of the betting exchanges, arrived on the scene with a bang in mid-2000 and has enjoyed phenomenal growth since then, but has also endured a running battle with the traditional fixed odds bookmakers who it believes have used their clout to thwart its growth at every opportunity.

Even before the latest spat ignited, a spokesman for Betfair told silicon.com: "We are seen as a commercial threat by the fixed odds bookies so anything that William Hill can throw at us they will."

On Tuesday Betfair announced a rescue package to bail out customers of Sporting Options which went into administration leaving 5,300 customers out of pocket.