Betting on horses has become big business and how it now has become a major part of horse racing and has with the use of the latest technology revolutionised the sport of horse racing and has now moved into all types of gambling.

Betfair is a company that specialises in online sports betting where betters can bet on horses on the internet. The company was founded by Andrew (Bert) Black and Edward Wray. The idea of a betting exchange was Andrew Black's idea and he conceived this idea in January 1998. In July 1998, Bert had a meeting with Edward Wray and they decided to work together. One year later, in August 1999, the parent company, The Sporting Exchange Limited, was incorporated, to develop the betting exchange platform.

In 2000, in June, Betfair was launched by The Sporting Exchange. The first market for Betfair is The Oaks, a horse race in Great Britain won by Divine Love and in October, Betfair places its first advertisement on television.

Besides horse racing, Betfair also offers betting on football matches which started in May 2001, when Betfair took bets on the Alaves versus Liverpool match in the UEFA Cup final. In June of the same year, Betfair became the official betting exchange provider for the Racing Post's website, the Racing Post being a newspaper that publishes horse racing results and information on the pedigree of the horses that run in the horse races. In October 2001, Betfair launched its telephone betting service. In December 2001, Betfair merged with Flutter.com, Flutter being a competitor to Betfair. Now, the company is a part of Betfair.

In July 2002, Betfair became the sponsor of the Fulham Football Club. In September 2002, Betfair moved to its new office in Hammersmith, London from its old office in Old Trafford, Manchester. In October 2002, พีจี
Black and Edward Wray are named Ernst and Young Emerging Entrepreneurs of the Year. In April 2003, Betfair wins Queen's Award for Enterprise, in the Innovation category, after being recommended by the Prime Minister and being assessed by the Department of Trade and Industry. In June 2003, Betfair signs a historic memorandum of understanding (MoU) with the UK Jockey Club. This memorandum is aimed at protecting and maintaining the integrity of horse racing.

In October 2003, Betfair signed a MoU with the Association of Tennis Professionals (ATP). In November 2003, Betfair becomes multilingual by launching services on its website in German, Danish, Greek, Italian, Swedish, Norwegian, Finnish and Chinese. Along with this Betfair signs a training initiative with GamCare, a charity that promotes responsible attitudes to gambling. In January 2004, Betfair signed a MoU with the International Cricket Council, the governing body for cricket.