Betfair hits back at claims it materially misrepresented facts in annual report

TAGs: Advertising Standards Authority, ASA, Betfair, pensions and investment research consultants, pirc

betfair-asa-pants-on-fireExchange betting operator Betfair has hit back at claims that it misled investors over its ‘illegal’ dividends. In announcing its fiscal 2014 results earlier this year, Betfair acknowledged that it had paid out £60m in dividends over the past three years it wasn’t technically empowered to disburse. Betfair admitted it had failed to notice changes in accounting rules that required companies to have certain levels of financial reserves before making it rain for shareholders.

Betfair holds its annual general meeting on Thursday and the corporate governance advisers at Pensions and Investment Research Consultants (Pirc) have suggested shareholders reject Betfair’s H1 report due to the company “materially misrepresenting” facts regarding the dividends, Pirc insists that the error “makes the validity of the company’s accounts themselves questionable as the key source of information for shareholders.”

Betfair has countered these claims by accusing Pirc itself of materially misrepresenting the facts “in a number of ways,” the most serious being the claim that Betfair’s profits are “overstated.” Betfair insists that the dividend issue was “a technical matter” that predates its life as a publicly traded company. The Independent’s James Moore phrased it slightly differently, calling the brouhaha “a cockup, not a crisis” and urging investors to “calm down.”

Betfair should be celebrating being among the lucky 20 recipients of a German online sports betting license, but instead it spent the day bent over the knee of the UK’s advertising watchdog. The Advertising Standards Authority (ASA) rebuked Betfair for a recent website ad that promised sportsbook bettors “money back” if England lost any group stage match at the 2014 FIFA World Cup.

Multiple complaints were lodged over alleged confusion as to how this “money back” offer would be delivered. The ASA determined that since Betfair’s caveat of money back in the form of a ‘free bet’ was only visible via a pop-up link, punters could have been misled into thinking they stood a chance of getting their bet refunded in cash. The ASA also upheld a complaint that Betfair’s offer of a “full refund” was similarly misleading.

However, the ASA rejected a claim by a punter who argued that a Betfair offer of “money back as a free bet” if tennis great Andy Murray won this year’s Wimbledon was a logical contradiction. The ASA also rejected a complaint that an ad’s claim that a free bet offer extended to “all markets” was false because onscreen text indicated that some wagers within markets were excluded, which the ASA ruled “qualified rather than contradicted” the all-markets claim.


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