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

What shits me about match-fixing 'journalism'.

The anti-wagering media bandwagon has dozens of new members this week, all weighing in an industry they have absolutely no idea about. I'm all for getting the betting industry into the mainstream but it shits me no end when they roll out reports and celebrities who simply don't have a clue what they are talking about and don't bother to check basic facts which key arguments in their story. If this was the financial industry, making errors like this would have them in all sorts of trouble, but the same level of regulation doesn't apply because finance stock markets are supposedly all legitimate and serious, whereas sports betting is just a bit of fun for people who can never win in the long-term... according to the media. This week we have seen the sting by the Telegraph which, on the face of it, looks to be a tremendous piece of investigative work into fixing in English football. But the headlines around it are over-sensationalised yet again. Delroy Facey, a former pla

Racing has a Ponzi scheme - and the fallout will be enormous

When the term ' Ponzi scheme ' is mentioned these days, the names Bernard Madoff and Allen Stanford instantly spring to mind. The pair of them ran multi-billion dollar frauds (US$60bn and $8bn respectively) that destroyed the lives of thousands of investors who had put their life savings into a 'wonderful' investment strategy. How so many people were sucked into the scheme is baffling to those on the outside. The lifestyle, the sales pitch, the success stories of the early investors - I suppose it all adds up. So where does this link to racing you ask? A prominent Australian 'racing identity' this week has been reported to have lost access to a bank account with punters' club funds of $194m in it. Firstly - is there a worse term for anyone to be labelled with that 'racing identity'? It ALWAYS ends up meaning shonky crook! Secondly - who the hell has a punters' club with an active bankroll in the tens of millions? It simply can't be done. T