November 18, 2011 / 5:01 PM / 7 years ago

UPDATE 1-Key Betfair director set to leave and join Wonga

* Weiss to become Wonga’s chief operating officer

* Betfair shares up 0.1 percent

By Matt Scuffham

LONDON, Nov 18 (Reuters) - Betfair’s Chief Commercial Officer Niall Wass is leaving to join short-term loan provider Wonga as chief operating officer, having been overlooked for the role of chief executive at the world’s biggest betting exchange.

Wonga, founded by South African entrepreneur Errol Damelin, confirmed on Friday that it had appointed Wass as chief operating officer after sources told Reuters he had taken up the position at the ‘payday loan’ provider.

“I’m delighted to welcome Niall on board and he will be a real asset as we continue to build a world-class consumer and technology business,” Wonga’s founder and Chief Executive Errol Damelin said in an e-mailed statement to Reuters.

Wonga offers individuals short-term loans of up to 1,000 pounds ($1,579) which are intended as an alternative to traditional lines of credit such as credit cards and personal loans, and as a means of avoiding unauthorised bank overdrafts.

However, it has faced criticism over its very high annual percentage rate, currently listed on wonga.com as 4,214 percent, which critics say takes advantage of the financially vulnerable.

Earlier this year, Wonga received funding of 73 million pounds from a consortium led by technology investment firm Oak Investment Partners. The Sunday Telegraph reported in August that it had sounded out advisors over a possible future IPO.

A spokesman for Betfair confirmed Wass’s departure.

“Niall played a key role in bringing Betfair to where it stands today and we wish him every success in the future,” a Betfair spokesman told Reuters.

The betting exchange last week appointed Paddy Power’s chief operating officer Breon Corcoran as its new chief executive, ignoring the claims of Wass, who had emerged as the strongest internal candidate, according to a source with primary knowledge of the appointment.

Weiss has been at Betfair for eight years, playing a pivotal role in the growth of a business which transformed the UK’s gambling industry by acting as an intermediary between gamblers wanting to place a bet or offer odds to others.

The company has had a tough time since its flotation in 2009, however, hindered by changes to online gambling laws in some European countries and intensifying online competition from traditional bookmakers such as William Hill and Ladbrokes.

Its shares slumped from a price of 1,610 pence shortly after the flotation to a low of 550 pence earlier this year and current Chief Executive David Yu said in June he planned to step down next year.

Shares in Betfair closed up 0.1 percent to 750 pence, valuing the business at 787 million pounds.

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