Online gambling firmBetfairhas rewritten its original
gambling software to offer consumers the opportunity to bet on the
financial markets.
The company which enables people to bet on the outcome of
sporting events is using the same business model in the financial
sector through a service called
Tradefair.
Betfair accepts sporting bets which are then matched up with
people making opposite bets. Stock exchanges work in a similar way
because they match up people that want to sell shares with people
that want to buy them.
Tradefair customers make bets and they are matched up against
someone making the opposite bet.
It now offers consumers the opportunity to bet on the value of
the FTSE 100 index as well as the values of gold and oil. People
bet on whether a particular market will be up or down and these
will be matched with people betting the opposite.
In 2009 Tradefair will let customers make bets on the share
prices of businesses. This will enable gamblers to benefit or lose
through the performance of a company's shares without owning
them.
This is where technology,
like in a traditional share trading environment, must be able
to match bets or trades in near real-time.
The platform will be able to do 190,000 trades per second with a
single trade being complete in a millisecond. The company spent
four months and tens of millions of pounds rewriting the Java-based
Betfair system and building an IT infrastructure to support it,
after identifying the financial markets as an opportunity.
"We have taken the design and concept of Betfair and built a
financial exchange," said Andrew Phillips, head of systems at
Tradefair.
Tradefair moves the Betfair Group into the financial derivatives
market and it is expects to be regulated by the Financial Services
Authority.
Martyn Holman, commercial director at Tradefair said the
company's retail heritage will help it build a huge customer base,
"Most financial stock exchanges deal with hundreds of institutional
customers but we can deal with thousands, even millions of
consumers," he said.
Customers can access the service in a number of ways including
through a web-based browser and an application programming
interface.