Matchbook Acquires Betdaq Amid Prediction Market Interest

The UK’s third largest betting exchange has acquired the fourth largest for an undisclosed fee.

Matchbook will consume Betdaq, with the latter to be closed for good as of November 4. The deal will also see Matchbook gain control of Racecourse Data Technologies, a software firm that enables on-course bookmakers to hedge their positions via the Betdaq platform.

Although it consolidates their position in the betting exchange market, Matchbook still have work to do to overtake the Betfair Exchange and Smarkets in terms of liquidity. But it’s possible that they might seek a different direction; offering the UK’s first bona fide prediction market.

Betdaq Purchase

Launched in the year 2000, Betdaq enjoyed early success as one of the UK’s first regulated betting exchanges.

The company thrived to the point that, in 2013, Ladbrokes – then separate from its Entain stablemates – completed the purchase of Betdaq for £25 million.

Perhaps Ladbrokes had ambitions of utilising their existing customer base to grow Betdaq, but they were never able to challenge the supremacy of the Betfair Exchange, which offers liquidity pools in excess of £1 million for the key sporting events.

Within eight years, Ladbrokes decided to sell Betdaq – and it was Dermot Desmond, who founded the company back in the year 2000, that came forward as the buyer. It’s thought he played a snip of the £25 million he received for the original deal in 2013.

Betdaq Customer Notice

Although praised by on course bookmakers for its rapid-fire hedging, Betdaq never quite earned the same amount of love from customers.

It remained the fourth largest exchange in a field of four for more than a decade, with Betfair and Smarkets – launched in 2010 – dominating the space.

One of the curiosities of the new deal is that Matchbook won’t automatically enlist Betdaq’s customers. Betdaq will remain fully operational until Wednesday of this week, while their customers will still be able to access their accounts and make a withdrawal until November 4.

At that point, they will have a decision to make. Sign up for a new customer account at Matchbook – probably with an enticing welcome bonus to lure them in – or instead take their business elsewhere.

Matchbook Eye Prediction Market Push

It was rather telling in his press statement about the acquisition that Matchbook’s chief executive, Ronan McDonagh, was quick to reference the rise of prediction markets while talking up his firm’s new purchase.

“Our first priority through this transition is Betdaq’s customers: their funds are safe, their options are clear, and in one combined pool they should find better prices and deeper liquidity than either exchange could offer alone,” he said.

“Exchanges and prediction markets are bringing peer-to-peer pricing to new audiences around the world, and this acquisition deepens the pool at the heart of everything we build.”

Betting vs Investing

The general consensus is that prediction markets, such as US giants like Polymarket and Kalshi, will struggle to convince regulators in the UK that they offer financial instruments trading – as opposed to pure gambling.

As such, they’ll need to secure a UK Gambling Commission licence… something which the key prediction market players are keen to avoid; as evidenced by their ongoing legal battles in the United States.

They may instead use a conduit; partnering up with a licensed operator that can then open the door to the UK market.

Matchbook has already worked with ADI PredictStreet ahead of the summer’s football World Cup. They have shown more of an interest in offering the ‘yes/no’ predictions popularised by Polymarket than the likes of Betfair and Smarkets; the former’s parent company, Flutter, is already embroiled in a market share battle in the United States with its brand FanDuel.