Rothschild close to advising Betfair on IPO - sources

LONDON (Reuters) - Betfair, the world's largest internet betting exchange, is close to appointing Rothschild as independent adviser for a potential listing, people familiar with the matter said on Wednesday.

The appointment takes the company a step closer to an eventual initial public offering (IPO), although Betfair is not under pressure to do a deal immediately, one of the people said.

A deal is not likely to emerge until the first quarter of next year at the earliest, another person said.

The IPO could aim to raise around 1.5 billion pounds, bankers not involved in the situation have told Reuters previously.

Betfair declined to comment.

Betfair reignited speculation that it was preparing for an IPO in August, when it reported full-year results that defied the recession and the downturn in the gaming industry. An earlier plan for a flotation was shelved in 2005.

Betfair has revolutionized British betting since it was launched in 2000 by former professional gambler and bridge player Andrew Black and Edward Wray, previously a trader at JP Morgan.

It has cut into traditional bookmakers' profits by matching up individual punters willing to take on either side of a bet. Like a stock market, Betfair allows individuals to endorse or "back" bets and "lay" or oppose bets on its exchange.

Black and Wray each hold stakes of around 25 percent in Betfair, according to reports. Softbank, a Japanese investment firm, bought 23 per cent in 2006, valuing the company at about $3 billion (1.8 billion pound), one of the people said.

Betfair's revenue rose 27 percent to 303 million pounds in the financial year to the end of April and adjusted earnings before tax, interest, depreciation and amortisation rose 29 percent to a record 72 million pounds.

(Editing by Mike Nesbit)