Betfairs Explanation Of the Racing Bets Glitch

Embarrassed CEO promises that software flaw has been fixed Stephen Morana, Betfair's acting chief executive, frankly explained the software flaws that earlier this week led to a voiding of bets on the Christmas Hurdle horse race at Leopardstown. He said that he was "personally devastated" and 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. He also revealed 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. Luckily enough, the bunfight was stopped before some GBP 21 million in offers from other hopefuls was accepted, which could have resulted in a liability of enormous proportions. The fact that the punters' 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. Of course, the Betfair report was diplomatically phrased: [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 confirmed that the fault had been identified and fixed, and 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.” The Guardian newspaper in its report on the Betfair assessment published a follow-on quote from Morana to show that the company realizes the damage the incident has caused both to its reputation and its share price (which fell significantly before the exchange closed on Dec. 30). Morana told the newspaper that the incident was, as he put it, a "body blow" and it had a serious impact on the trust that the company has been building with its customers over years. ”We've got to prove to people that it was a one-off,” he pointed out.