Betfair launches LMAX and Betchecker
Betfair launched its financial trading platform and a bets comparison site today, following the company's recent IPO.
Betfair, that began conditional trading on Friday valuing it as highly as £1.65bn, has launched two new products today “ LMAX its long awaited financial trading product that will replicate its sports betting exchange for retail investors and online operator comparison site Betchecker that offers punters the chance to track which company offers the best bets.
LMAX, Betfair’s financial trading spin-off, offers retail investors the ability to trade Contracts for Difference (CFDs) in market indices, fixed income instruments, commodities and FX, with other asset classes to be added to the platform in due course. CFDs appeal to retail investors, as they enable them to profit from share price moves without having to pay the stamp duty associated with owning the shares.
The platform connects online retail investors with Betfair taking a commission on each trade in a similar way it has done with its betting products.
LMAX was set up by Betfair in 2007 and received approval from the UK’s Financial Services Authority (FSA) earlier this year to offer CFDs, spread betting and rolling spot forex contracts.
Prior to the approval, investment bank Goldman Sachs acquired a 12.5% stake in LMAX’s parent company, London Multi-Asset Exchange (Holdings), for an undisclosed sum. Betfair retains a majority shareholding in the business with a 73.5% share.
Betchecker compares Betfair against other online operators tracking which company returns the biggest winnings across a number of football betting markets.
Betfair said the new site “allows punters to compare and contrast returns on bets placed with a number of different betting firms”. Punters are able to compare Betfair with up to four other companies simultaneously.
The site’s historical prices are captured just before an event starts, with competitors’ prices made available to Betfair through third party odds comparison sites.
Shares in Betfair continued trading strongly today, the second day of conditional training since its flotation on Friday, opening 29p up at £15.79. Only previous shareholders and subscribers to the float can currently trade the exchange company’s shares. Unconditional trading begins on Wednesday.
A £13-a-share initial public offering delivered immediate profits of 20% for institutional investors last week, when Betfair shares rose quickly to more than £15.
At close of trading on Friday the stock was priced at £15.50, giving Betfair a market capitalisation of approximately £1.65bn.