City A.M. understands the price range will be between £11 and £14 per share, valuing the company at between £1.16bn and £1.48bn.
About 10 per cent of the stock will be floated in the IPO although more shares could be issued if demand is strong enough.
Betfair was launched ten years ago and allows gamblers to offer odds and bets to each other via the internet, eliminating the need for a bookmaker.
It now claims to be the largest gambling community in the world. It also sponsors sporting events, including horseracing.
But there are concerns the IPO could be shunned by investors who suffered losses after the flotation of Ocado, the online supermarket delivery service, this year.
Of Betfair’s 700 shareholders about 500 are employees. Its other big shareholders include the private equity firms Balderton Capital and Index Ventures and Richard Koch, co-founder of LEK Consulting.
Japanese bank Softbank bought a 21.5 per cent stake for £13.20 a share four years ago. The bank is thought to have objected to a listing at a price below this level, forcing Betfair to delay a planned IPO in August.
Founders Ed Wray and Andrew Black own 22.5 per cent of the business — worth between £281m and £359m at the proposed IPO price.