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Written On 4/27.11  By staff writer Frank Polliern :

New Christiansen study commissioned by Betfair's TVG reports back
The United States is an ideal market for exchange wagering, is the conclusion reached by a new study commissioned by TVG, the racing subsidiary of Betfair.
“The conclusions are fairly clear,” said Eugene Christiansen, the head of Christiansen Capital Advisors, which spent more than a year looking at wagering and economic trends in the United Kingdom and Australia, where betting exchanges have been available for several years.
“People like exchange betting. Exchange betting appeals to people who were not currently involved in fixed-odds betting, or bookmaking, or pari-mutuel betting. It seems to have reinvigorated betting in the UK and Australia. We have no reason to suppose it would have a different effect in the United States.”
The study released April 25 is entitled “Exchange Betting and the United States Thoroughbred Racing Industry.”
Among the factors examined were the business cycles of wagering in the U.S., United Kingdom, and Australia over two decades; the maturation of wagering initiatives like offtrack betting and full-card simulcasting; the introduction and expansion of alternative gambling options, including state-run lotteries, casino games, internet gambling, and offshore rebate shops; and the demographics of the wagering public, reports the racing publication Bloodhorse.
However, Bloodhorse reports that the Christiansen study's positive conclusions were challenged during a media press conference by Carlo Zuccoli, former consultant for the European Pari Mutuel Association.
Zuccoli claimed that the racing industry in England was “struggling for prize money.”
“The levy has gone down 40 percent," he alleged. "Betfair is draining a huge amount of money from the tote and the bookmakers.”
Zuccoli also voiced fears of corruption, saying that the latest scandal in Europe involves six UK jockeys that were allegedly being paid GBP 5,000 per race by a big player betting on horses to lose.
Christiansen responded by saying the UK adopted fundamental structural changes in 2009 regarding how purses are funded by the UK levy.
“The shock waves from these changes are still working their way out,” Christiansen said. He added that Betfair has been working actively with regulatory agencies to be ensure the integrity fo the sport.
Bloodhorse reports that a key criticism of the study was that it did not assess how exchange wagering might impact U.S. purses or affect wagering through the existing pari-mutuel system.
Christiansen said, while important, this issue could not be adequately addressed because Betfair doesn’t know how its product might be priced in the U.S. As of now only two states have legalised exchange wagering—California and New Jersey—but it has not been implemented yet.
“We did not have a price model to analyse,” Christiansen said. “I will say, if what the U.S. consumer has been saying, that he wants lower prices - and we really can’t read the numbers in any other way - then the only way to address that concern is to bring the price of wagering down.
"That is a serious statement. If you cannot at the same time, grow the pie, then the long-term outlet is simply not good. This is a serious situation that cannot be addressed with rhetoric.”
In looking at U.S. purse and handle trends for the first quarter of the year, Christiansen said he noticed purses were up 5.3 percent but handle is down 8.5 percent. Because casino gaming (slot machines, video lottery terminals, and card games) contributed 30 percent to Thoroughbred purses in 2009, the upward trends in purses indicated that people were spending money, just not directly on horse racing.
“Something has to be done,” he said. “Exchange wagering is extremely important since it is something the consumer has said very clearly in the UK and Australia that he likes.”
Christiansen Capital Advisors has made the 150-page report online.

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