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exchange betting heading to New Jersey racing?

Racing in many states of the US is really struggling. The Off-Track Betting (OTB) of New York is millions in debt (how you can run a monopoly tote at a loss is beyond belief), broadcast rights are a mess, politicians in Arizona thought it was a great idea to ban online betting altogether, Californian racetracks are being sold off to property developers or lobbying to increase takeout rates and trainers who are banned for doping offences in one state can simply up sticks and move to another. With the exception of a handful of tracks, it's a basket case.

New Jersey moves forward with betting exchange plans


This week New Jersey state assembly unanimously voted (78-0) in favour of a bill that would authorise a Betfair-style betting exchange for state residents on horse racing. Like everything in the US, it's restricted by state, but..

"The bill also provides that exchange bets submitted on a given market on the exchange in New Jersey may, under approved conditions, be matched with exchange bets on the same horse race or set of horse races submitted by residents of jurisdictions outside of the state to an authorised exchange operator in that jurisdiction."

meaning if they wanted to, they could partner up with Betfair and A - get them to run it, because they know how to do it, and B - it could link up with Betfair's US racing markets available to the rest of the world, so there is genuine liquidity in the markets.

Also, from NJ approves exchange-style wagering

"Language in the bill calls for money generated from exchange wagering to be committed to state tracks and horsemen but it is not specific. The bill does call for a review of the initial agreement in 2014 at which time the state’s horsemen will have the option to modify it."

The involvement of the state's horsemen is worrying because in virtually every other state they have been dead against any reduction in tote takeouts which according to just about every business study ever commissioned, will lead to higher turnover and thus greater profits. Horsemen are not businesspeople, they are predominantly stubborn folk stuck in the past.

This is a promising development for wagering in the US, but once the proposal starts gathering momentum, wait for the lobbying from the anti-factions over the old chestnut of laying a horse to lose, all stakeholders wanting too much out of the deal thus making the whole point of exchange betting (low margins) a waste of time, and then probably some more stupid politics from another state.

Too many fingers in the pie will bring it down. Exchange betting with 15% commission won't work.




NB To my American readers, please feel free to pick me up on any factual errors or misconceptions in the opening paragraph.

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