Incident: Betting Exchange Software Flaw Leads to Voided Bets.

Published Date: 2011-12-29

Postmortem Analysis
Timeline 1. The software failure incident happened in December 2011 ([Article 54496]). 2. The incident occurred in December 2011.
System 1. Betfair's software system failed, leading to a software flaw that caused the in-running betting on the Christmas Hurdle at Leopardstown to be declared void [54496, 11075]. 2. The automated trading programme, or "bot," malfunctioned and was responsible for placing the rogue bet into the exchange, bypassing the usual checks [54496, 11075]. 3. The software failure allowed a customer's multimillion pound lay bet on Voler La Vedette at 28-1 to bypass the system's checks, potentially resulting in a £600m liability [11075].
Responsible Organization 1. A customer's rogue "bot" - a malfunctioning automated bet-placement programme - was responsible for causing the software failure incident at Betfair [11075]. 2. Betfair itself operates in-house bots on the exchange, but the specific incident was caused by a customer's bot bypassing the usual checks [54496].
Impacted Organization 1. Betfair betting exchange [54496, 11075] 2. Punters who placed bets on the Christmas Hurdle at Leopardstown [54496, 11075]
Software Causes 1. The software failure incident at Betfair was caused by a rogue "bot" placed by a customer, resulting in a multimillion pound lay bet on Voler La Vedette bypassing the usual checks [11075]. 2. Betfair identified and fixed the software flaw that allowed the rogue bet to be placed, leading to the voiding of all bets on the race [54496].
Non-software Causes 1. Unprecedented betting activity and patterns on Voler La Vedette's race at Leopardstown, leading to a substantial amount of bets being placed at odds of 28-1 [Article 54496]. 2. Presence of a rogue "bot" or automated trading program that placed a multimillion pound lay bet on Voler La Vedette, bypassing usual checks and resulting in a potential £600m liability for the customer [Article 11075].
Impacts 1. The software failure incident at Betfair resulted in the in-running betting on the Christmas Hurdle at Leopardstown being declared void, causing confusion and dissatisfaction among customers [54496]. 2. The incident led to Betfair voiding all bets and refunding stakes, resulting in punters losing out on potential winnings [11075]. 3. The software failure incident damaged Betfair's reputation and trust among its customers, potentially leading to long-term negative effects on customer loyalty [54496]. 4. The incident highlighted the reliance on automated trading programs or "bots" in the betting exchange, raising concerns about the control of day-to-day activities by bots rather than individual punters [54496]. 5. Some punters who were dissatisfied with the handling of the issue were directed to the Independent Betting Adjudication Service (IBAS) for dispute resolution, indicating the need for external intervention to address customer grievances [54496, 11075].
Preventions 1. Implementing stricter checks and controls on automated trading programs or "bots" to prevent rogue bets from being placed on the exchange [54496]. 2. Conducting more rigorous testing of software fixes before implementing them in a live environment to ensure that such incidents do not occur [54496]. 3. Enhancing the monitoring and oversight of in-running betting markets to detect anomalies or suspicious activities promptly [11075].
Fixes 1. Betfair's technicians identified and fixed the software flaw that caused the in-running betting on the Christmas Hurdle at Leopardstown to be declared void [54496]. 2. Betfair applied a fix overnight after identifying the issue and replicated it in a test environment [54496]. 3. Betfair made ex-gratia payments to some punters and voided all bets related to the incident [11075].
References 1. Betfair's spokesman, Tony Calvin [54496] 2. Independent Betting Adjudication Service (IBAS) [11075]

Software Taxonomy of Faults

Category Option Rationale
Recurring one_organization, multiple_organization (a) The software failure incident at Betfair was not an isolated event. Prior to the incident involving the voided bets on Voler La Vedette at Leopardstown, Betfair had faced software failures in the past. In September of the same year, Betfair's software failed to process a significant number of bets, including some winners, into the biggest Tote Jackpot pool in history [54496]. (b) The incident at Betfair involving the voided bets on Voler La Vedette at Leopardstown highlighted the potential risks associated with automated trading programs or "bots" in the betting industry. The malfunctioning automated bet-placement program used by a customer resulted in a significant software failure that led to the voiding of bets worth £23m [54496].
Phase (Design/Operation) design, operation (a) The software failure incident at Betfair related to the design phase as it was caused by a software flaw that allowed a customer's multimillion pound lay bet on Voler La Vedette to bypass the usual checks and be placed on the system, resulting in a potential £600m liability for that customer [11075]. (b) The software failure incident at Betfair also had elements related to the operation phase as it involved the operation of a malfunctioning automated bet-placement programme, known as a "bot," which was responsible for placing the rogue bet into the exchange [54496].
Boundary (Internal/External) within_system (a) The software failure incident at Betfair related to the betting exchange's decision to void all bets on the Christmas Hurdle at Leopardstown was primarily within the system. The incident was caused by a software flaw that allowed a customer's multimillion pound lay bet on Voler La Vedette to bypass the usual checks and be placed on the system, resulting in a potential £600m liability for that customer [11075]. Betfair identified and fixed the software flaw that led to the voided bets, indicating an internal system issue [54496]. The use of a malfunctioning automated bet-placement program (bot) by the customer further emphasizes the internal nature of the software failure incident.
Nature (Human/Non-human) non-human_actions, human_actions (a) The software failure incident at Betfair related to the in-running betting on the Christmas Hurdle at Leopardstown was primarily attributed to non-human actions. It was mentioned that a customer's multimillion pound lay bet on Voler La Vedette at 28-1 had bypassed the usual checks and was placed on the system, resulting in a significant liability if enough bets were placed on the horse. This situation was caused by the customer's rogue "bot," which was described as a malfunctioning automated bet-placement program [11075]. Additionally, Betfair's spokesman, Tony Calvin, speculated that an automated trading program or "bot" was likely responsible for placing the rogue bet into the exchange. He confirmed that Betfair itself operates in-house bots on the exchange, indicating that automated processes played a role in the incident [54496]. (b) In the context of human actions contributing to the software failure incident, it was mentioned that Betfair's technicians identified and fixed the software flaw that caused the in-running betting on the Christmas Hurdle to be declared void. The exchange took steps to address the issue, including applying a fix overnight and subjecting it to rigorous testing. Furthermore, Betfair's spokesman, Tony Calvin, defended the exchange's response to the betting activity and emphasized that there was a unique set of events that allowed the incident to happen [54496].
Dimension (Hardware/Software) software (a) The software failure incident occurring due to hardware: - There is no specific mention in the provided articles about the software failure incident being caused by hardware issues. The incident primarily revolves around a software flaw that led to the voiding of bets on the Betfair betting exchange [54496, 11075]. (b) The software failure incident occurring due to software: - The software failure incident at Betfair was primarily attributed to a software flaw that allowed a customer's multimillion pound lay bet on Voler La Vedette to bypass the usual checks and be placed on the system, resulting in a potential £600m liability for that customer [54496, 11075]. - Betfair cited a unique set of circumstances and a malfunctioning automated bet-placement program (referred to as a "bot") as the contributing factors to the software failure incident that led to the voiding of bets on the Christmas Hurdle at Leopardstown [54496, 11075].
Objective (Malicious/Non-malicious) non-malicious (a) The software failure incident described in the articles was non-malicious. It was caused by a unique set of circumstances and a malfunctioning automated bet-placement program (bot) that bypassed the usual checks, leading to the placing of a multimillion-pound lay bet on Voler La Vedette at 28-1 [54496, 11075]. The incident was not attributed to any intentional harm or malicious intent but rather to a technical flaw in the system that allowed the rogue bet to be placed.
Intent (Poor/Accidental Decisions) poor_decisions (a) The software failure incident at Betfair related to the betting exchange voiding all bets on the Christmas Hurdle at Leopardstown was primarily due to poor_decisions. The incident was caused by a unique set of circumstances where a customer's multimillion pound lay bet on Voler La Vedette at 28-1 bypassed the usual checks and was placed on the system, leading to a potential £600m liability for that customer [11075]. Betfair acknowledged that the situation arose due to the customer's rogue "bot" – a malfunctioning automated bet-placement programme [11075]. The decision to void bets and refund all stakes was made by Betfair, emphasizing that they would have voided the bets regardless of the race's outcome [11075]. The incident highlighted a failure in the system's checks and balances, indicating poor decisions in the software's handling of bets and automated trading programs.
Capability (Incompetence/Accidental) accidental (a) The software failure incident at Betfair, where in-running betting on the Christmas Hurdle at Leopardstown was declared void, was attributed to a unique set of events that allowed a rogue bet to be placed into the exchange. It was speculated that an automated trading programme or "bot" was responsible for placing the rogue bet, which bypassed the usual checks on the system [54496]. (b) The software failure incident was described as caused by "a unique set of circumstances" that led to a customer's multimillion pound lay bet on Voler La Vedette at 28-1 bypassing the usual checks on the system. This resulted in a £600m liability for the customer had sufficient bets been placed on the horse. Betfair claimed that the situation arose due to the customer's rogue "bot" – a malfunctioning automated bet-placement programme [11075].
Duration temporary (a) The software failure incident in the articles was temporary. The incident was caused by a unique set of circumstances, including a customer's rogue "bot" that bypassed the usual checks to place a multimillion pound lay bet on Voler La Vedette at 28-1, resulting in a potential £600m liability for that customer [Article 11075]. Betfair identified and fixed the software flaw that caused the in-running betting on the Christmas Hurdle at Leopardstown to be declared void, and the bets were ultimately voided and refunded due to the software failure [Article 54496]. The incident was not a permanent failure but rather a specific issue that occurred under certain conditions.
Behaviour value, other (a) crash: The software failure incident described in the articles does not involve a crash where the system loses state and does not perform any of its intended functions. Instead, the incident involved a unique set of circumstances that led to a significant issue in the betting exchange system [54496, 11075]. (b) omission: The software failure incident does not involve the system omitting to perform its intended functions at an instance(s). The incident was more related to a malfunctioning automated bet-placement program that allowed a customer's multimillion-pound lay bet to bypass usual checks [54496, 11075]. (c) timing: The software failure incident is not about the system performing its intended functions correctly but too late or too early. It was more about a customer's rogue "bot" that caused the malfunction in the automated bet-placement system [54496, 11075]. (d) value: The software failure incident does involve the system performing its intended functions incorrectly. The malfunction in the system allowed a customer's lay bet to bypass checks and potentially result in a £600m liability if enough bets were placed on the horse [54496, 11075]. (e) byzantine: The software failure incident does not exhibit a byzantine behavior where the system behaves erroneously with inconsistent responses and interactions. The incident was more about a specific issue caused by a malfunctioning automated bet-placement program [54496, 11075]. (f) other: The software failure incident involved a unique set of circumstances where a customer's rogue "bot" caused a significant issue in the betting exchange system, leading to the voiding of bets and refunding of stakes. The incident highlighted the potential risks associated with automated trading programs and the need for robust checks and balances in place [54496, 11075].

IoT System Layer

Layer Option Rationale
Perception None None
Communication None None
Application None None

Other Details

Category Option Rationale
Consequence property, theoretical_consequence (d) property: People's material goods, money, or data was impacted due to the software failure The software failure incident at Betfair resulted in significant financial implications for both the company and its customers. Due to a software flaw, a customer was able to place a multimillion pound lay bet on Voler La Vedette at 28-1, which bypassed the usual checks and could have led to a £600m liability for that customer if enough bets were placed on the horse [11075]. As a result, Betfair decided to void all the bets and refund the stakes, causing disappointment and financial impact on the punters who believed they had won substantial amounts [54496]. Additionally, Betfair made ex-gratia payments to some punters and directed others to the Independent Betting Adjudication Service (IBAS) for resolution, where 34 punters who filed complaints were informed that they would not be receiving any winnings [11075].
Domain finance (a) The software failure incident reported in the articles is related to the finance industry. Betfair, a betting exchange, experienced a software flaw that caused in-running betting on a horse race to be declared void, leading to significant financial implications for the company and its customers [54496, 11075]. The incident involved a customer's multimillion pound lay bet bypassing the system checks due to a malfunctioning automated bet-placement program, resulting in potential liabilities of £600m [11075]. Betfair's response to the incident, including voiding bets and refunding stakes, reflects the financial impact and regulatory scrutiny associated with the failure [54496, 11075]. The Independent Betting Adjudication Service (IBAS) was involved in adjudicating the dispute, further highlighting the financial and regulatory aspects of the incident [11075].

Sources

Back to List