Entain PLC, the owner of powerhouse UK betting brands, including Ladbrokes and Coral, has now dumped its wagering exchange Betdaq, which it sold back to Dermot Desmond last week.

A short history of Betdaq

In 2000, Irish business person Dermot Desmond founded the Global Betting Exchange (GBE) with a vision to produce a platform where punters might wager versus each other. From GBE, the sports betting exchange Betdaq was launched in 2001.

A couple of sponsorship offers, including one with Celtic FC and another with Kempton Park Racecourse, saw Betdaq securely establish itself as the second-largest online wagering exchange behind Betfair by 2013, albeit with only a 7% market share. Still, this was enough to lure betting huge Ladbrokes to buy the Global Betting Exchange and its properties for EUR30m from Desmond in the very same year.

Despite being backed by Ladbrokes, Betdaq has actually never ever got on par with Flutter Entertainment's Betfair. It's tinkered with different promotions, such as offering 0% commission, but most have just led to a short-term bump up in users, with nothing sustained. Contributed 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 implied to change the gaming market, and while they have to a degree, we can't say they have actually fallen the big bookies, like some thought they might. In a nutshell, a wagering exchange is a peer-to-peer betting platform. Punters wager against each other instead of betting versus a bookie.

This style of wagering has advantages and disadvantages. The main advantages are that the prices are usually better on an exchange because there is no bookmaker's margin to consider; likewise, winning bettors don't have their accounts limited - something that is known to happen if you're too successful versus a bookie.

The downside of exchanges is that they just grow if adequate users are supplying liquidity to the marketplaces. Additionally, they can be a little overwhelming for newbies who don't comprehend how backing and laying bets work.

What's Desmond's Plan?

For the time being, we can just speculate why Desmond has selected to turn the clock back and get Betdaq once again. Our sensation is that he's sensed an opportunity opening in the market that he can benefit from. The cost spent for Betdaq is undisclosed, so we can't say if the cost was merely too great to decline or not.

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

Whatever the reason, Desmond is taking on a significant obstacle if he desires Betdaq to seriously competing Betfair. Fortunately for punters is that it keeps competition healthy. Nobody desires a Betfair monopoly where they can continue to call all the shots. Because of that, we wish Dermot and Betdaq all the very best.