Entain PLC, the owner of powerhouse UK betting brands, consisting of Ladbrokes and Coral, has now ditched its wagering exchange Betdaq, which it sold back to Dermot Desmond recently.

A short history of Betdaq

In 2000, Irish business owner Dermot Desmond established the Global Betting Exchange (GBE) with a vision to produce a platform where punters could bet versus each other. From GBE, the sports wagering exchange Betdaq was introduced in 2001.

A couple of sponsorship offers, including one with Celtic FC and another with Kempton Park Racecourse, saw Betdaq strongly establish itself as the second-largest online wagering exchange behind Betfair by 2013, albeit with just a 7% market share. Still, this sufficed to attract betting huge Ladbrokes to buy the Global Betting Exchange and its possessions for EUR30m from Desmond in the same year.

Despite being backed by Ladbrokes, Betdaq has never ever got on par with Flutter Entertainment's Betfair. It's played with numerous promotions, such as providing 0% commission, however a lot of have actually only resulted in a momentary bump up in users, with absolutely nothing sustained. Contributed to that, Betfair and Paddy Power formed a bulk merger, which included hefty marketing power to help keep Betfair at the head of the pack.

What is a betting exchange?

Betting exchanges were meant to revolutionise the betting market, and while they need to a degree, we can't state they have actually toppled the big bookies, like some believed they might. In a nutshell, a betting exchange is a peer-to-peer betting platform. Punters wager versus each other instead of wagering versus a bookie.

This design of betting has pros and cons. The main benefits are that the rates are generally much better on an exchange due to the fact that there is no bookie's margin to factor in; also, winning gamblers do not have their accounts minimal - something that is known to occur if you're too successful versus a bookie.

The downside of exchanges is that they just grow if sufficient users are supplying liquidity to the markets. Additionally, they can be a little frustrating for beginners who don't understand how backing and laying bets work.

What's Desmond's Plan?

For the time being, we can just hypothesize why Desmond has selected to turn the clock back and acquire Betdaq again. Our feeling is that he's noticed an opportunity opening in the market that he can take advantage of. The fee paid for Betdaq is concealed, so we can't state if the rate was simply too good to refuse or not.

What we do know is that Betfair has dealt with increased criticism over its commission rates for both moderate bettors and professional traders, such as Caen Berry. Essentially, Betfair is creaming off as much as possible from gamblers who achieve success occasionally, in addition to taking from its huge players who have actually made numerous thousands over the years. On top of this, there are now constraints as to just how much under 25s can win.

Whatever the factor, Desmond is taking on a significant challenge if he wants Betdaq to seriously competing Betfair. Fortunately for punters is that it keeps competitors healthy. Nobody desires a Betfair monopoly where they can continue to call all the shots. Because of that, we wish Dermot and Betdaq all the best.