Matchbook surprised the industry on 14 October when it announced the acquisition of rival UK exchange Betdaq for an undisclosed sum. The deal brings an end to a brand Irish tycoon Dermot Desmond founded in 2000, sold to Ladbrokes in 2013 before buying back from Entain eight years later. Betdaq stops trading on Wednesday, 21 October, and customers have until 4 November to withdraw their funds.
The deal is a brand acquisition, with no customer accounts moving across. It also includes a “controlling interest” in Racecourse Data Technologies (RDT), which on-course bookmakers use to hedge into the exchange.
Speaking to EGR a day after the announcement, CEO Ronan McDonagh explains the thinking behind the move. He also discusses Matchbook’s pitch to Betdaq and Betfair customers, its push into the US, and why he believes UK regulatory policy is pushing punters towards the black market.
EGR: Matchbook and Betdaq have operated side by side for years. Why buy now?
Ronan McDonagh (RM): We’ve been on a growth trajectory for the last seven or eight years. In the last three or four years we’ve advanced into Brazil, Mexico and South Africa, and we’re also looking at the US with a DCM application in for prediction markets. But we haven’t forgotten the UK and Irish market.
The one thing about Matchbook compared to everybody else is we’ve always been exchange-only. Going into Brazil showed us very quickly the value of expanding the (liquidity) pool. So, when the opportunity to acquire Betdaq came along, it was really appealing. When everybody else is pulling out of the UK market, we thought let’s keep attacking it.
EGR: Betdaq stops trading on 21 October and its customer base isn’t migrating. Why?
RM: We bought the brand rather than the business. It’s very, very hard to target exchange customers in marketing, so it was an opportunity to tell Betdaq customers: come over here, you’ll help the liquidity pool grow and you get the same product, but you’ll also get a lot of add-ons like multiples, bet builders and a lot more leagues and matches.
EGR: Do you have targets for how many will move over?
RM: We haven’t really set ourselves targets. Betfair has dominated this space for so long, and there’s always been a reluctance to try the other exchanges. So not only are we going after Betdaq customers, we’re hopeful of picking up anybody who’s ever considered an exchange.
EGR: If accounts aren’t transferring, where does the combined liquidity come from?
RM: Betdaq had a big presence with the on-course bookmakers, so we expect to get a lot of that business. But I think it will be customers. A lot of Betdaq customers already had Matchbook accounts. So, it’s a reactivation and acquisition kind of move.
EGR: Sticking with on-course, was this business the main motivation for the deal?
RM: There are a lot of pieces to the jigsaw. We’ve got involved on course in the last four or five years and we have good relationships with bookmakers, so the opportunity to expand that was very, very appealing. Horseracing is a core part of our exchange, and we’ve really got big into sponsorship in the UK and Ireland in the last 12 months.
EGR: Why invest in racing when others are moving away from it?
RM: The reality is the product, pricing-wise, has got a lot worse for the regular customer because the margin has increased everywhere. The one thing about an exchange is the margin will always be low. People love horseracing, but they don’t want to be ripped off either. We’ve grown year on year in horseracing, even though I’m sure that’s not the case for most of the other people in this industry at the moment.
EGR: What is your message to on-course bookmakers?
RM: I was at Punchestown myself yesterday talking to these guys. Our message is that nothing is going to change. If anything, the pool is getting better, so that should help everybody. There’s a little bit of friction with changing over software, but we have a dedicated hotline with a couple of guys in our office and a few guys on course just talking everybody through it. We expect within a week or two it will be very normal for them all to be using Matchbook instead of Betdaq.
EGR: How confident are you about the future of the exchange model?
RM: If you’d asked me this five or six years ago, I’d have probably given you a more pessimistic answer. But in Brazil, younger people who probably came over from the crypto world were trading football matches the way people traded Betfair in the early days. In the UK, there’s kind of a lost generation of exchange users, but between Kalshi, Polymarket and the US [midterm] elections coming up, that always draws eyes to the exchanges. So, I’m bullish again.
EGR: You mention the growth of the big US prediction market platforms. Have the UK exchanges missed a trick here?
RM: I think the regulation there [the US] really made it as big as it is. There’s also stuff you couldn’t do here – the crazier markets. But even an app like Robinhood – there’d be no Kalshi without Robinhood. I will say the simplicity of ‘yes-no’ versus ‘back-lay’ feels like something obvious. I will tell you one thing, though: nobody is going to embrace percentages, no matter how much you try to force it on them.
EGR: The Budget is looming in the UK. What’s your take on the regulatory environment right now?
RM: A lot of people will have a sportsbook account and use an exchange to manage the position, and if anything, that’s to be encouraged. If you get the guy that has backed a golfer at 50/1 on a Wednesday, and he comes over to us on a Sunday night to lay him at evens because he’s got a three-shot lead, that’s a really good use of an exchange. If your starting point is that gambling is evil, where do you go with that?
EGR: And what about UK tax policy and the black market?
RM: Gambling’s not going away. People will gamble – that’s why the black market has exploded. Every time I go out and talk to people, I hear about the black market, and it’s as if it doesn’t exist. If you’re not solving problem gambling, and then you have tax leakage, and you’re also encouraging criminal behaviour down the line, where are we going with this?
I was chatting to a guy I’ve known for 25 years at Punchestown about a black market issue he was aware of. This didn’t exist 20 years ago. We left this behind in the seventies and eighties, and now it exists again. People need to own the consequences.
EGR: Finally, what does the next six to 12 months look like for the business?
RM: Once we get this Betdaq migration done, we’ll keep making noise in the UK market. And then obviously the US – we’re a little bit away from designation and launching there. We will be also bringing a package to market soon where we can give a ready exchange to a platform or a large bookmaker that wants to add prediction verticals or an exchange vertical.
The post Matchbook CEO: “When everybody is pulling out of the UK, we thought let’s keep attacking it” first appeared on EGR Intel.
Ronan McDonagh tells EGR why the firm bought Betdaq’s brand but not its customers, what the deal means for on-course bookmakers, and why he is bullish on exchanges again
The post Matchbook CEO: “When everybody is pulling out of the UK, we thought let’s keep attacking it” first appeared on EGR Intel.