Japanese technology Softbank is to acquire a 23% stake in Betfair in a deal which values the online internet betting exchange at a colossal £1.5 billion.

Softbank will buy up to 20% Betfair's parent company The Sporting Exchange and has also pledged to snap up a further 3% of Betfair shares - making it the betting group's biggest single shareholder when the deal completes in April.

Punters who originally invested in Betfair at £1 a share will see a stunning return of 130 times their initial investment as the offer price of £13 follows a 10-for-1 share split.

The deal also puts Betfair in a good position to enter the Japanese market - although neither company offered any comment on this.

The move follows the abrupt cancellation of Betfair's plans for a stock market flotation in October 2005 amid concerns about slowing growth in the online betting industry and the effects of US legal action against internet betting companies.

Betfair has become one of the biggest online gambling companies by allowing people to place bets and set their own odds on sports events without using a bookmaker. Instead the company charges a commission on each bet made.

• Separately Betfair also announced this week that it would allow its betting and poker customers to make payments via PayPal, the popular online payment company