The steep share price gains experienced by some UK-listed gaming companies on Wednesday following the US Department of Justice’s pre-Christmas Wire Act reversal tapered off on Thursday. After gaining 23% on Wednesday, Bwin.party fell half a percentage point on Thursday, while Playtech was flat following Wednesday’s 15% rise. Only 888 Holdings continued its dramatic ascent, rising 7% on Thursday.
Betfair, meanwhile, fell 21.5p (2.75%) on Thursday, continuing its slide from Wednesday, when it shed 22 points. The betting exchange is reeling from the publicity own goal it scored Wednesday, when a “technical fault” forced Betfair to void millions of pounds worth of in-running bets on the Christmas Hurdle at Leopardstown. The company issued another statement Thursday, claiming to have “identified the issue and replicated it in a test environment last night. A fix was applied overnight and is now subject to rigorous testing.” The Racing Post reported that Wednesday’s cock-up was the result of a malfunctioning ‘bot’, or automatic betting system, employed by a Betfair customer with no connection to the company.
Responding to complaints that the company took too long to void the market, Betfair’s statement claimed the company had “made the decision after we were in full possession of all the facts and input from the relevant internal departments.” But during a subsequent interview on At The Races, Betfair spokesman Tony Calvin appeared to offer up a junior staffer as a sacrificial goat, admitting that the company should have suspended the market sooner, “but you’ve got to remember you’ve got a relatively junior person in position making that massive call.”
William Hill CEO Ralph Topping couldn’t resist getting a few digs in at his rival via his always entertaining blog, not so subtly suggesting Betfair had other motives for voiding the wagers. “This particular cracker begs the question whether a substantial layer … got very exposed, and I mean very exposed, and had to be bailed out by their host with a waiver – of their magic wand or of the contract terms? I leave you to do decide … For the reputation of the whole industry, it really is about time there was some transparency around the issue of who is actually laying bets on Betfair. Particularly the big ones, and does £23m not count as a big one? But does this actually get any air time? No. And I wonder why? Betfair seems to have lots of friends in racing and the racing media, which naturally leads to people asking if some of our finest hacks are actually layers themselves on Betfair too. Why stop there? Are some racing administrators layers? Are some politicians? Shouldn’t we know? Might there be conflicts of interest here? Shouldn’t it be clear? Should they be declared?” Read Ralph’s entire missive here.
While Betfair is closing out 2011 on a bum note, Bet365 is ringing out the year in style. The Guardian reported that the Stoke-based outfit made a pre-tax profit of £91m for the year to March 31, despite doling out £7.4m for its majority share of the losses incurred by struggling Premier League club Stoke City. With bets up 58% and takings at £501m, the Coates family – founder Peter, daughter Denise and son John — took a £25m dividend from the private company they control for the third year running. Should make for a lot of expensive corks popping in Stoke come New Year’s Eve.
