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Betfair Explains Racing Bet Glitch
01/01/2012 : Mortified CEO pledges that software flaw has been fixed
Betting exchange Betfair was remarkably frank in describing the software flaws that led earlier this week to a voiding of bets on the Christmas Hurdle horse race at Leopardstown.
Describing himself as "personally devastated", acting chief exec Stephen Morana revealed that an account holder with less than GBP 1000 credit had been allowed to offer 28-1 odds on 13-8 second favourite Voler La Vedette. His generous offer was predictably matched to the tune of GBP 800 000 from some 200 punters who scented easy money, creating a liability of around GBP 23 million, Morana revealed.
Fortunately the bunfight was stopped before some GBP 21 million in offers from other hopefuls was accepted, which could have resulted in a liability of quite biblical proportions.
The fact that the punter's offer progressed as far as it did, bearing in mind the low funding in the account, was attributed to the accounts automated betting software going haywire, or as the Betfair report more diplomatically phrased it: [the account software] "developed a fault, causing it to try and place a very large number of bets on the exchange. These bets were large in size and mispriced [for the credit balance in the account] so none of these bets should have been accepted.
"However, due to a technical glitch within the core exchange database, one of the bets evaded the prevention system and was shown on the site. This was an issue that was triggered because of a unique sequence of events that had never happened before.
Morana assured interested parties that the fault had been identified and fixed, and that precautions had been taken to ensure there could be no reoccurrence in the future.
"Lessons have been learnt in terms of how quickly we need to respond and how we need to communicate with our customers,” an embarrassed Morana noted.
Reporting on the Betfair assessment, the Guardian newspaper published a follow-on quote from Morana that showed that the company realises how much damage the incident has caused to its reputation as well as its share price, which dipped significantly before the exchange closed Friday.
Morana told the newspaper that the incident was a "body blow" and that it had impacted the trust built over years with the company's customers.
”We’ve got to prove to people that it was a one-off,” he said.
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