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BETTING EXCHANGES IN THE U.S.A.?
Friday, December 2,2011 : Betfair's TVG subsidiary could be in the pound seats when new Californian law comes into force
Exchange betting isn't yet authorised in California, but a law passed last year will make it legal starting in May 2012, and the British online gambling group Betfair, which pioneered the concept, will be strongly positioned to exploit the new business opportunity through its US subsidiary TVG.
Plans are already afoot at Betfair to open betting exchange operations in May, working through a 75 personnel-strong technical hub that the firm has already set up in San Francisco .
Reporting on developments, the San Francisco Chronicle emphasises that when it comes to horse racing, online betting is legal and already well-established through companies like TVG, which Betfair acquired in 2009.
The newspaper speculates that the advent of betting exchange action could not only transform betting on the ponies, but could also save the declining fortunes of U.S. racetracks.
Stephen Burn, the head of the Betfair office in San Francisco, told the newspaper that the betting exchange business model enables racing fans to bet against each other, and additionally allows them to bet in ways they can't with traditional wagering.
"You can keep betting in the middle of a race," said Burn. "Betting can continue until the results are posted, so if there's a photo finish, you can keep betting until a result is announced."
The Chronicle reports that Betfair is working with the California Horse Racing Board as well as with race tracks to strike deals that will enable the betting company to earn a profit while offering the tracks a substantial cut, giving the troubled racing industry new revenues.
Betfair has proposed a 10 percent commission on racing wagers, with two-thirds of that going to the track. So if a punter bets $30 and wins, the commission would be $3. Betfair would get $1, and the track where the race is held would get $2.
"From our perspective, unless there's a healthy horse racing industry ... no matter how great our betting product is, people won't want to bet on it," Burn said. "You have to have a viable, sustainable horse racing industry."
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