Betfair, founded 10 years ago by one-time professional gambler Andrew Black and former JP Morgan trader Edward Wray, said the total value of bets rose 7 percent in the first half and it expects to make further progress in the second half.
These results were driven by an excellent exchange performance following a very positive start to the football season and improved monetisation of activity, said departing chief executive David Yu.
We expect to make further progress in the second half and remain comfortable with the outlook for the financial year, he added.
But spending on leisure activities such as gambling will be squeezed, executives noted, as the consumer environment weakens.
The signs are encouraging but we're also pragmatic to know that this is really tough times for the consumer...as leisure spend is tightened, so is the size of the wallet for people to spend on sports betting, Stephen Morana, chief financial officer and incoming interim CEO, told reporters.
Morana expects mobile betting to continue its 100 percent growth rate into the second half, as the company banks on new technology to drive growth.
Betfair is not a traditional bookmaker but instead acts as an intermediary between gamblers wanting to place a bet or offer odds to others, taking a commission on their winnings.
The group added in a separate statement that it has appointed Chief Financial Officer Stephen Morana as interim chief executive.
CEO Yu is stepping down at the end of the month with former Paddy Power Chief Operating Officer Breon Corcoran already named as his permanent replacement starting in August.
Underlying earnings before interest, tax, depreciation and amortisation (EBITDA) rose 36 percent to 42.4 million pounds in the six months to October.
That was ahead of an average forecast of 37.4 million based on a poll of 10 analysts supplied by the company.
Analysts at Barclays Capital said this was attributable to cost phasing in the core Betfair business and lower than expected losses in the non-core business, leading full-year forecasts to remain unchanged.
Betfair generated core revenue growth of 12 percent year-on-year in the second quarter, and this has risen 13 percent so far in the third quarter due to higher racing revenues. Adverse weather conditions led to race meeting cancellations this time last year making for an easier basis for comparison.
The group, which proposed an interim dividend of 3.2 pence, posted a pretax profit of 20.8 million pounds, while group revenue rose 1 percent to 191.3 million pounds.
Shares in Betfair, which have dived from 1,610 pence shortly after its flotation last October, were down 0.37 percent at 1000 GMT, roughly in line with the FTSE midcap index.
Betfair shares have been hindered by concern over changes to online gambling laws in countries such as Spain, Greece and Germany, and intensifying online competition from traditional bookmakers such as William Hill
The group said it continues to work with governments and regulators while discussions with the Italian regulator are progressing well.
(Reporting by Lorraine Turner; Editing by Paul Hoskins and Helen Massy-Beresford)