From Guardian Unlimited
Betfair, the internet's leading betting exchange, is believed to be on the verge of allowing punters to place bets which will be settled at "Betfair starting price" - the price of a horse at the moment a race begins. The move is intended to boost liquidity in its racing markets from early in the day, but is also a clear challenge to traditional bookmakers, who settle the majority of bets at the official SP, returned by a team of reporters in the betting ring at the racecourse in question.
Because Betfair makes its money through a commission on winning bets only, the over-round on its markets is rarely above 1% when a race starts. This means that the Betfair SP will almost always beat the official SP, which tends to have a margin of between 1.75 and 2% for every horse in a race.
Until now, however, Betfair punters have always been forced to take the best price on offer when they log on, or leave a "request" for a better price which may, or may not, be matched by other users. If they can bet at the Betfair SP, they will in the vast majority of cases, be paid at a better price than the official SP.
The Racing Post has carried "teaser" ads from Betfair for the last two days, suggesting that the exchange "changed the face of betting" when it was launched in 2000, and that "history is about to repeat itself" in December 2007. This suggests a launch date of December 1 for the new service