The account spans social media, mobile, product development and online creative.
Ben Carter, the head of online acquisition at Betfair, said: "We're impressed with Karmarama's digital capabilities and look forward to working with it."
The brand appointed Big Al's Creative Emporium to its advertising account in June after a pitch, in which the incumbent, Albion London, did not take part.
Betfair's most recent digital work was an online pastiche of a Ferrero Rocher ad, starring sporting heroes and created by Big Al's.
A previous project involved placing QR codes on the bikini bottoms of beach volleyball players taking part in a test tournament for London 2012. When the codes were photographed by a smartphone, the user was directed to a registration page offering new Betfair customers a free bet.