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Platform Competition: Betfair and the U.K. Market for Sports Betting

Author

Listed:
  • Ramon Casadesus-Masanell

    (Harvard Business School, Strategy Unit)

  • Neil Campbell

    (Majestic Wine PLC)

Abstract

We examine two episodes of strategic interaction in the U.K. betting industry: (i) Betfair (an entrant multi-sided platform, or MSP) vs. Flutter (also an MSP), and (ii) Betfair vs. 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.

Suggested Citation

  • Ramon Casadesus-Masanell & Neil Campbell, 2018. "Platform Competition: Betfair and the U.K. Market for Sports Betting," Harvard Business School Working Papers 19-057, Harvard Business School.
  • Handle: RePEc:hbs:wpaper:19-057
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    More about this item

    Keywords

    platform design; network effects; betting; complements; competing business models; co-opetition; entry;
    All these keywords.

    JEL classification:

    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism
    • L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software

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