Exchange wagering will likely make its debut in the U.S. when live racing returns to Monmouth Park in May after the New Jersey track and Betfair reached a five-year agreement earlier this week. The state’s legislature approved exchange wagering--which allows fans to wager against one another, set their own odds and wager during races--in 2011. After final regulatory measures are resolved, Monmouth will become the first track in the U.S. to offer exchange wagering, which was introduced in Europe by the British-based Betfair a decade ago.
"We’re very pleased to continue our relationship with Betfair," commented Dennis Drazin, advisor to the track’s operator Darby Development. "TVG Betfair has been an integral part of Monmouth Park’s success. They’ve been doing an excellent job in the other areas that we’re involved with--the live T.V. at the racetrack and the account wagering. They’ve increased our business in the account wagering in the 10 months that they’ve been with us by 58% and we look forward to a long and prosperous future with them offering exchange wagering."
According to Drazin, the New Jersey Racing Commission has completed its regulatory scheme which must now be sent to the state’s Attorney General’s office for review followed by a period of public commentary.
"It’s a process--between the comment period and the publishing of the final regs--we hope to be completed by May," Drazin said. "We hope to be able to offer exchange wagering for our consumers by the opening of Monmouth. The only problem I could foresee is sometimes these things take time in getting all the approvals you need. If not May, maybe it’s June, but I don’t see any problem being able to offer it at the Monmouth meet."
Betfair has been criticized for returning a minimal portion of wagers to European racetracks and horsemen, but Drazin is happy with Betfair’s agreement with Monmouth.
"[The percentage returned] is higher than it is in Europe," he said. "So I think we have a fair percentage. Ultimately, at the end of the day, it depends on how much wagering there is."
Addressing concerns that exchange wagering may take money away from traditional wagering pools, Drazin explained, "There are three components of the product. One is the typical scenario that we’re familiar with at racetracks where you bet on the win, place, show pools and bet on your exotics. The way that it breaks out historically in New Jersey, about 30% of the money is in the win-place-show pool, 70% is in the exotics. Exchange wagering is not offered in the exotics, it is only in the 30% category. So we think the 70% category will stay consistent or grow, we think that the area of potentially shifting money from live racing--the 30%--some of it could shift to exchange wagering, so you’re hoping to increase your volume there to offset any money that moves across the board."
Drazin thinks exchange wagering, particularly the in-race wagering option, will attract a new group of fans to horse racing.
"The one thing that is terrific is there is no in-race wagering in New Jersey, so that is all new money and I think that is an exciting prospect for people," Drazin said. "The other thing that exchange wagering does is it gears for a different demographic. This isn’t something that the typical person that is at the track is going to be betting into in-race wagering because it moves too quickly. You’re going to be doing these mostly on computers or on machines that we have at the track or from home or from your office or your smart phone and I think it will increase the population of people who want to wager and the track people who may currently play the stock market."
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