Matchbook-Betdaq Deal Reshapes UK Betting Exchange Market, Analyst Says
A veteran of both exchanges tells EGR that Matchbook's purchase of Betdaq was driven almost entirely by on-course bookmaker flow, handing Matchbook roughly 90% share of that segment.
Matchbook's acquisition of rival exchange Betdaq, confirmed on 14 October, was primarily aimed at capturing on-course bookmaker business rather than acquiring staff or customer accounts generally, according to an analysis published by EGR.
The piece was written by Enda Kendrick, who spent years in senior positions across both exchanges before moving into roles supporting market makers and sharp bettors at Moon Intelligence and, most recently, Veltium. He writes that he is among only four people to have worked at both companies, and the most recent to have done so.
Kendrick entered the betting exchange sector in 2014, a period he describes as formative but increasingly constrained by thin margins. He notes that an exchange with no internal market making, such as Betfair, generates only £0.80 in gross profit on a £100 wager, leaving little room for customer acquisition spend, particularly under a regulatory framework that treats exchanges no differently to high-margin sportsbooks.
For most of the past decade, the UK exchange market has consisted of four operators: Betfair, Betdaq, Smarkets and Matchbook, with Betfair holding a commanding lead throughout. Kendrick argues that this dominance forces smaller rivals to mirror Betfair's rules closely, since market makers price off Betfair's odds and would withdraw liquidity if a competitor tried to diverge, even temporarily.
He sets out the ecosystem's structure as internal and external market makers, syndicates, sharps and users of trading APIs on one side, generally profiting, against on-course bookmakers, arbers and retail bettors on the other, who typically supply the losses those groups extract. Betfair's API, like Betdaq's, was open to all; Smarkets and Matchbook instead vet access to their liquidity on a case-by-case basis.
On the Betdaq deal itself, Kendrick stresses that it was a pure brand acquisition with no transfer of personnel, and that on-course bookmakers were the clear strategic target. He points to Matchbook's established strength in horseracing market making as a close fit for that flow, which he says rarely churns and feeds substantial losses into the exchange system.
The on-course bookmaker community had split between two technology providers: Elite, used by both Betfair and Matchbook, and RDT, which offered exclusive access to Betdaq. Matchbook had no presence among on-course bookmakers in 2022 before launching a 0% commission drive that made it the dominant exchange on Elite, though it never broke into the RDT customer base. The Betdaq acquisition is expected to deliver Matchbook around 90% share of this segment.
Kendrick identifies Matchbook's market makers as the clear winners, inheriting a concentrated losing flow, while sharp horseracing operators who previously extracted value from that flow stand to lose out. He also flags a possible knock-on effect for Betfair, since many of those sharp participants traded across both Betfair and Betdaq, and suggests on-course bookmakers could eventually face reintroduced commission as competition in the segment narrows, unless Betfair responds aggressively.
His broader outlook for UK exchanges is cautious absent regulatory change that distinguishes them from conventional sportsbooks. He notes that challenger exchanges had largely pinned hopes on the US market and potential acquisition of their technology by American sportsbooks, but says the rise of prediction markets under Commodity Futures Trading Commission oversight could offer an alternative route, even if competing directly against established US players looks difficult.