ASA Adjudication on Betfair Ltd
12 September 2012
Internet (sales promotion)
Number of complaints:
Claims on www.betfair.com, featured text which stated "Commission on this market 0% - Commission will not be charged on Horse Racing Multiples bets". The ad also included a link to the rules and regulations section which stated "Any winnings from Exchange Multiples bets struck at BSP [Betfair Starting Price] will not be subject to Betfair commission, but the odds returned on each leg in such a multiple will be subject to a 5% deduction from the BSP".
The complainant challenged whether the claim "Commission will not be charged on Horse Racing Multiples bets" misleadingly implied that no charges would be made on winning Horse Racing Multiple bets, because the odds returned on each leg in such a bet were subject to a 5% deduction from the BSP.
CAP Code (Edition 12)
Betfair explained that they were best known for 'exchange betting', which entailed the odds being set by their customers who then bet directly against each other. They said they took no market risk on those bets and therefore the charging mechanism was a deduction of commission from winnings achieved by a customer. They said due to the number of possible permutations, they did not offer multiple betting in the exchange betting format, described above. Instead, the consumer would bet directly against Betfair, who would build a margin into the odds they offered to consumers. In that format, Betfair would not deduct commission from the consumer's winnings. They said they intended the claim to notify consumers that the usual way they charged their consumers did not apply in the case of Horse Racing Multiples bets.
Betfair explained that for Horse Racing Multiples bets they calculated the BSP, which included no margin, and applied a 5% reduction to that price. They then offered the net price to consumers. They said the BSP was calculated when the race had begun and that, prior to that point, the ad displayed the projected selling price, which had been subject to a 5% deduction. They also said that when a consumer placed a multiple bet, they could view their projected win, which also included the 5% reduction.
The ASA considered consumers would understand that bookmakers would always try to maximise their profits and would take that into account before setting their odds for customers. In that context, we considered consumers would understand the claim distinguished the manner in which Betfair built a margin into the odds they offered to consumers for Horse Racing Multiple bets from the charging mechanism which applied to exchange betting. Furthermore, we noted that the prices shown for each selection within a Horse Racing Multiple bet had been subject to a 5% deduction and therefore reflected the projected price consumers would attain for that bet.
On that basis, we considered the ad was not likely to mislead.
We investigated the ad under CAP Code (Edition 12) rules 3.1 and 3.3 (Misleading advertising) and 3.9 and 3.10 (Qualification) but did not find it in breach.
No further action necessary.