Since Betfair was launched in June 2000 it has grown to become the dominant person-to-person sports betting exchange, and one of the highest volume electronic financial exchanges in the world, processing more than 5 million transactions per day. A betting exchange allows users to bet at prices set and requested by other users rather than by a bookmaker.
Like other types of financial exchanges, Betfair has distinct network economics – as more players participate, spreads narrow with more contention to set price, larger transactions can be settled quickly, and an increasing range of bets of all kinds can be offered – all benefits that a low volume player cannot offer. The result can be natural monopoly if one company wins a big enough lead, and it was this consideration that drove early consolidation of betting exchanges in the UK. In the early stages of this industry segment Betfair and Flutter had 60% and 30% respective market shares, with dozens of other initiatives splitting the rest of the market. These two were sufficiently threatening to each other in these winner-take-all conditions that both boards saw the logic of a combination.
In 2002 Greg joined the enlarged Betfair board after its merger with Flutter, which he had originally backed with UBS Capital, and soon after became Chairman. The immediately profitable merged company, retaining the name Betfair, experienced growth of 15% per month for the next 18 months as bettors embraced the benefits of better pricing, the ability not only to take but also offer bets and trade in and out of positions, and other innovations such as betting on live and dynamically changing prices during an event. Betfair went public in 2010 at a £1.5 billion valuation, and continues to hold 90% of the exchange betting market.