Betfair transfers gambling IT know-how to financial markets

Online gambling firm Betfair has rewritten its original gambling software

Online gambling firmBetfair has 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.

Tradefaircustomers 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 letcustomers make bets on theshare 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 expectsto beregulated 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.

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