Skip to main content

exchange betting in California doesn't guarantee Betfair a start

Much has been made this week of the Californian government passing legislation to allow exchange wagering on horse racing in the state. With Betfair already having a presence in California as owners of broadcast network and pari-mutuel operator TVG, and sponsoring the bill, the easy conclusion is that Betfair will start up in the USA. But a lot of water still has to pass under the bridge before a Betfair-run exchange can be licensed.

This bill also allowed pari-mutuel operators to raise takeout on Californian racing pools... so where is the logic in pushing rake up to over 20% on one hand, and bringing in a foreign company to run a business on 2-5% commission at the same time? Of course there's no guarantee Betfair would use (or be allowed to use) the same business model as they have in the UK, a market subject to far more competition.

Politicians have a history of making half-baked decisions, particularly when they are desperate for cash (the state of California is as financially healthy as Greece at the moment) and it involves gambling, a sector which invests obscene amounts into lobbying. Horsemen's groups have plenty of influence and are likely to demand either unviable rates of commission, or that a Californian racing exchange is operated by the local racing industry. That's despite Betfair having all the expertise in the industry, and access to solid liquidity from experienced exchange users. If you open an intra-state exchange only, where nobody has ever used an exchange before and there is no history of fixed-odds wagering, it will struggle. It's the chicken and egg thing - without liquidity, you can't get punters. Without punters, you can't get liquidity.

All this bill has done is opened the state up to the opportunity of exchange wagering on local racing. There's still a lot of debate and lobbying to go before punters can get excited. After all, they haven't even had the tired old debate about the ethics of laying horses to lose....

Comments

Popular posts from this blog

It's all gone Pete Tong at Betfair!

The Christmas Hurdle from Leopardstown, a good Grade 2 race during the holiday period. But now it will go into history as the race which brought Betfair down. Over £21m at odds of 29 available on Voler La Vedette in-running - that's a potential liability of over £500m. You might think that's a bit suspicious, something's fishy, especially with the horse starting at a Betfair SP of 2.96. Well, this wasn't a horse being stopped by a jockey either - the bloody horse won! Look at what was matched at 29. Split that in half and multiply by 28 for the actual liability for the layer(s). (Matched amounts always shown as double the backers' stake, never counts the layers' risk). There's no way a Betfair client would have £600m+ in their account. Maybe £20 or even £50m from the massive syndicates who regard(ed) Betfair as safer than any bank, but not £600m. So the error has to be something technical. However, rumour has it, a helpdesk reply (not gospel, natur

lay the field - my favourite racing strategy

Dabbling with laying the field in-running at various prices today, not just one price, but several in the same race. Got several matched in the previous race at Brighton, then this race came along at Nottingham. Such a long straight at Nottingham makes punters often over-react and think the finish line is closer than it actually is. As you can see by the number of bets matched, there was plenty of volatility in this in-play market. It's rare you'll get a complete wipe-out with one horse getting matched at all levels, but it can happen, so don't give yourself too much risk...

hope for investors in the Centaur scandal?

In a breaking story, it has been reported that directors of the failed sports investment fund Centaur have had their assets frozen in order to repay investors. It is believed that managing director Keith Sobey skipped town trying to avoid prosecution however he either naively thought Ireland was a safe enough place to hide or had a lingering feeling of guilt and sat waiting for that knock on the door. Sobey, the name behind Centaur ( read the original story here ), is believed to own four houses, worth more in total than the missing £1.6m. His willingness to sell them to repay investors is likely to keep the matter out of the courts, and at least one other director, Andrew Cork, will apparently follow suit. All this adds weight to anecdotal evidence that the collapse of the fund came down to mismanagement rather than fraudulent deeds. As costs grew (why would you set up a training academy in central London?), margins evaporated and keeping the business afloat went through money like