Betfair are forced to change their Grand National SP
Betfair were forced into performing a massive volte-face, when, after the suspension of its Grand National win market the company noticed that the returned Betfair Starting Prices on the race, were, in its words, "not appropriate to the race". In other words, in what is the world's biggest horse race, the Betfair starting price on the favourite Comply or Die, was significantly lower than the industry returned Starting price.
Accordingly, Betfair took the decision to reverse the procedure and manually determined the BSP using "methods at its disposal";
"The reconciliation of the Betfair SP for the Grand National win market resulted in prices which we believe were significantly unfair for backers of some horses, most obviously the winner. Therefore we unreconciled the Betfair SP to return what we believe were fair prices. As a result of unreconciling bets after the race, some matched bets (which would have been winning bets for customers) became unmatched bets. In addition, some customers may have traded in-play based on bets they believed had been matched. If you believe that you have been disadvantaged as a result of this, please contact us at bets@betfair.com. We will look at our records to determine the amount you should be due and provide compensation accordingly. Please be aware that this may take some time and it is unlikely that we will be able to address all enquiries until next week."
Commenting on his blog, Andrew Black, one of the owners of Betfair said;
"I think (hope) that this is a one-off. The BSP was, bizarrely, a victim of its own success - having moved along quietly doing relatively little turnover for a few months it suddenly burst into flame. The win market for the National yesterday was nine times bigger than any BSP market we have ever had before, and almost all the new business was business to back. It was always going to be big but the BF planner didn’t envisage or plan for this sort of scale (it would have been easy to have alerted more layers). The demand for Comply or Die bust a hole in the tissue and the price died. This was a mistake - no question - but I have some sympathy as the numbers were way higher than my expectations too. Hopefully the guys can paper it over - BF will surely be the financial loser here and not the customer. I see it as a one-off mistake - BF must learn from it and make sure it doesn’t happen again."
A Betfair forumite going by the name of Pablo, summed up the feeling of many punters when he wrote;
"It simply beggars belief that people can have had matched bets removed from their account when nothing has gone wrong. Will there be a new department to judge the fairness of the sp returned in every race every day ? What is unfair ? Under the official SP ? Or 20 % under ? or 30 ,40,50 % under? Surely a bet that is matched is sacrosanct unless something has gone wrong,like a late suspension. Why do people have to email in to have their accounts adjusted back to the right amount ? Surely it should be automatic."
At 12.05 on the 07 Apr 2008 Betfair Customer Services iisued the following statement;
"Following our decision to roll-back the initial Betfair SP reconciliation for the Grand National win market, some customers were left in a worse position than had that initial SP stood. We are in the process of assessing which customers were disadvantaged by the roll-back and by how much. All affected customers will receive payments from Betfair to reflect this. In other words, if a customer would have been in a better position had the initial SP reconciliation stood, then a payment will be made by Betfair to the customer to reflect this, irrespective of whether the customer has contacted Betfair. No customer will be left in a worse position following the roll-back than would otherwise have been the case."
They then went on to explain the reasoning behind the roll-back;
"The decision to roll-back the initial SP reconciliation was taken following extremely high level of demand from Betfair SP backers in the Grand National win market. Had the initial SP stood, the prices returned on several horses for those backers would have been much reduced from what they could reasonably have expected. As a result, Betfair made the decision to roll-back after the race, to reflect an SP overround as close as possible to 100%, which is typical of the Betfair SP in the normal course. We believe that this was an exceptional case and don't anticipate a reoccurrence, but obviously the result of the roll-back was that some other customers were left in a worse position than had the initial SP reconciliation stood."