Platform competition: Betfair and the UK market for sports betting. Issue 1 (7th January 2019)

• Record Type: Journal Article
• Authors: Casadesus‐Masanell, Ramon; Campbell, Neil
• Other Names: Cabral Luis guestEditor.; Peitz Martin guestEditor.; Wright Julian guestEditor.
• Is Part Of: Journal of economics & management strategy. Volume 28:Issue 1(2019)
• Page Start: 29
• Page End: 40
• Publication Date: 2019-01-07
• Subjects: betting -- competing business models -- complements -- co‐opetition -- entry -- network effects -- platform design; Economics -- Periodicals; Business -- Periodicals; Management -- Periodicals; Strategic planning -- Periodicals; 330.1
• DOI: 10.1111/jems.12310
• Languages: English
• ISSNs: 1058-6407

Abstract

Abstract: We examine two episodes of strategic interaction in the UK betting industry: (a) Betfair (an entrant multisided platform, or MSP) versus Flutter (also an MSP), and (b) Betfair versus traditional bookmakers. We find that although Betfair was an underfunded second mover in the betting exchange space, it was able to attract punters at a much faster rate than the better‐funded first mover, Flutter. Moreover, while Betfair and traditional bookmakers competed aggressively for market share, they also developed a highly complementary relationship that favored all parties. We discuss implications for research in the economics and management of MSPs. Specifically, we argue that the literature would benefit from work that endogenizes platform design and that considers the possible competitive and cooperative interactions between the business models of traditional incumbents and those of potential innovative MSP entrants.