Entain PLC, the owner of powerhouse UK betting brand names, including Ladbrokes and Coral, has actually now dropped its wagering exchange Betdaq, which it offered back to Dermot Desmond last week.

A brief history of Betdaq

In 2000, Irish business person Dermot Desmond founded the Global Betting Exchange (GBE) with a vision to develop a platform where punters could bet against each other. From GBE, the sports betting exchange Betdaq was released in 2001.

A few sponsorship deals, including one with Celtic FC and another with Kempton Park Racecourse, saw Betdaq firmly develop itself as the second-largest online wagering exchange behind Betfair by 2013, albeit with only a 7% market share. Still, this sufficed to attract betting giant Ladbrokes to buy the Global Betting Exchange and its possessions for EUR30m from Desmond in the very same year.

Despite being backed by Ladbrokes, Betdaq has never ever got on par with Flutter Entertainment's Betfair. It's played with numerous promos, such as providing 0% commission, however most have only led to a short-term bump up in users, with nothing sustained. Added to that, Betfair and Paddy Power formed a majority merger, which included hefty marketing power to help keep Betfair at the head of the pack.

What is a wagering exchange?

Betting exchanges were suggested to change the gaming industry, and while they have to a degree, we can't say they have actually fallen the big bookmakers, like some believed they might. In a nutshell, a betting exchange is a betting platform. Punters bet versus each other instead of betting versus a bookie.

This style of betting has benefits and drawbacks. The main advantages are that the rates are typically much better on an exchange due to the fact that there is no bookmaker's margin to factor in; likewise, winning wagerers do not have their accounts limited - something that is understood to happen if you're too effective versus a bookie.

The disadvantage of exchanges is that they only grow if adequate users are providing liquidity to the marketplaces. Additionally, they can be a little overwhelming for newbies who do not understand how backing and laying bets work.

What's Desmond's Plan?

For the time being, we can just hypothesize why Desmond has picked to turn the clock back and obtain Betdaq again. Our feeling is that he's picked up an opportunity opening up in the market that he can make the most of. The cost spent for Betdaq is undisclosed, so we can't state if the price was just too good to turn down or not.

What we do understand is that Betfair has actually dealt with increased criticism over its commission rates for both moderate gamblers and expert traders, such as Caen Berry. Essentially, Betfair is creaming off as much as possible from bettors who achieve success here and there, as well as drawing from its big gamers who have earned numerous thousands throughout the years. On top of this, there are now constraints as to how much under 25s can win.

Whatever the factor, Desmond is taking on a major obstacle if he wants Betdaq to seriously competing Betfair. Fortunately for punters is that it keeps competition healthy. No one wants a Betfair monopoly where they can continue to call all the shots. For that factor, we wish Dermot and Betdaq all the very best.