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Platform Competition: Betfair and the U.K. Market for Sports Betting

Ramon Casadesus-Masanell () and Neil Campbell ()
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Ramon Casadesus-Masanell: Harvard Business School, Strategy Unit
Neil Campbell: Majestic Wine PLC

No 19-057, Harvard Business School Working Papers from Harvard Business School

Abstract: We examine two episodes of strategic interaction in the U.K. betting industry: (i) Betfair (an entrant multi-sided platform, or MSP) vs. Flutter (also an MSP), and (ii) Betfair vs. traditional bookmakers. We find that although Betfair was an underfunded second mover in the betting exchange space, it was able to attract punters at a much faster rate than the better-funded first mover, Flutter. Moreover, while Betfair and traditional bookmakers competed aggressively for market share, they also developed a highly complementary relationship that favored all parties. We discuss implications for research in the economics and management of MSPs. Specifically, we argue that the literature would benefit from work that endogenizes platform design and that considers the possible competitive and cooperative interactions between the business models of traditional incumbents and those of potential innovative MSP entrants.

Keywords: platform design; network effects; betting; complements; competing business models; co-opetition; entry (search for similar items in EconPapers)
JEL-codes: D21 D43 L13 L83 L86 (search for similar items in EconPapers)
Pages: 23 pages
Date: 2018-11
New Economics Papers: this item is included in nep-com, nep-pay and nep-spo
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