With the law permitting exchange-base wagering on horse racing taking effect in May 2012, Betfair/TVG are getting everything ready to go. Coming up this week is the first public test of the model at an annual racing industry event.
TVG Betfair to Demonstrate Exchange-Bet Model
A test model of the first exchange wagering system proposed for the United States will be demonstrated at the University of Arizona Symposium on Racing & Gaming in Tucson beginning Dec. 6.
The system, developed by TVG Betfair, is a “first stage application,” the company said Dec. 5. The racing network TVG is based in California and owned by Great Britain-based Betfair, which operates the largest exchange wagering platform in the world.
A recent article in the San Francisco Chronicle said TVG Betfair is proposing a 10% commission, two-thirds of which would go to racing and one-third to Betfair. Racetracks, horsemen, and others would then split the two-thirds according to regulations and contracts.
Firstly, there is still a long way to go in negotiations with racetracks and horsemen. The latter are renowned as some of the most stubborn bastards on Earth and their support for wagering matters only seems to be gained when the % takeout increases - despite all forms of economics showing that volume, and thus income, decreases when takeout percentages rise. Contrast the wagering figures between Tampa Bay Downs and any Californian track for evidence.
The SF Chronicle said the commission would be 10% on stakes, which seemed a little odd, although being an American paper not fully au fait with the workings of exchange betting, they can be excused if it was in fact in error - but with tote takeouts coming via stakes, perhaps it is a plan to compare like-for-like. That figure appears high for regular BF punters, but let's not forget, this is something completely new for Californian punters, and it's still a big improvement on their only current option - the tote.
No mention yet of whether any cross-border action will be permitted - tough to get the market moving without people who understand the product properly, particularly layers. Without any fixed-odds alternatives, it's gonna be slow out of the blocks unless they can tap into some experience.