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BETFAIR ISOLATES AND FIXES SOFTWARE FLAW

12/30/11 : Automated trading programme 'almost certainly' responsible for voided bets debacle at betting exchange
 
Reeling under wide criticism over the software flaw that caused it to void millions of pounds sterling in bets this week , betting exchange Betfair said Thursday that its technicians had identified and fixed the software flaw that caused the in-running betting on Wednesday's Christmas Hurdle at Leopardstown to be declared void.
 
Voler La Vedette, the easy winner, was available to back at odds of 28-1 from early in the race until she crossed the line, causing GBP 800,000 to be staked on the mare worth a total payout, in theory, of nearly GBP 23 million.
 
Tony Calvin, a Betfair spokesman, acknowledged in media interviews that the episode had been "highly embarrassing and an unacceptable betting experience for people", but said in the company's defence that "there was a unique set of events that allowed this to happen".
 
Calvin speculated that an automated trading programme, or "bot", had almost certainly been responsible for placing the rogue bet into the exchange, but confirmed that Betfair itself operates in-house bots on the exchange.
 
"If the Gambling Commission want to come and have a look, that's fine," he said. "We're always honest and transparent."
 
Calvin also suggested that punters who are dissatisfied with the way that the issue has been handled could take their concerns to the Independent Betting Arbitration Service (IBAS).
 
Betfair is expected to release an extensive and final report on the incident today (Friday), but in a statement issued Thursday afternoon, the exchange confirmed that "we have identified the issue and replicated it in a test environment last night. A fix was applied overnight, and is now subject to rigorous testing."
 
The statement added that "contrary to some media speculation, we can confirm that all in-running bets on this market would have been voided, had Voler La Vedette won or lost. There was never any chance of the account in question profiting yesterday. The account in question was also immediately suspended after the Leopardstown race."
 
The identity of the Betfair customer who placed the rogue bet remains the subject of speculation, though the account is believed to have been operated by an individual client with a modest balance, rather than a bookmaker seeking to hedge liabilities or an account linked to the exchange itself.
 
"If you're looking for a GBP 1 million-plus customer, you would be barking up the wrong tree," Calvin said when questioned. "People think we are protecting the customer, but that is not the case."
 
The bizarre incident has done little to enhance Betfair's already battered reputation after it voided internet casino bonuses on its now-notorious "Happy Hour" promo earlier this year. In another incident, Betfair left a large number of customers disappointed when its software failed to process a significant number of bets, including some winners, into the biggest Tote Jackpot pool in history.
 
Investors have also given the company a tough ride, following its underperformance after an IPO in October 2010. After listing at GBP 13, the share price has been stuck below GBP 8 for many months.
 
The company additionally suffered a drain of top managers, which it now claims it has addressed, and its CEO is leaving, along with co-founder Ed Wray who is the chairman



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