Exchange wagering to debut in New Jersey May 10, on hold for now at Meadowlands

April 22, 2016

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by Bill Finley

Officials of Betfair and the thoroughbred track Monmouth Park announced Thursday (April 21) in a joint press conference that exchange wagering will begin May 10 in New Jersey. Betfair, popular in many parts of the rest of the world, will be accepting its first ever U.S. customers when launching next month. New Jersey is the only state that has officially approved the form of wagering and only residents of the state will be allowed to bet.

However, Meadowlands owner Jeff Gural said he has yet to come to an agreement with Betfair and that Meadowlands races may not be available to U.S. exchange customers when Betfair launches in New Jersey. Gural said there were some issues to be resolved concerning sponsorships agreements between the track and Betfair. He said he also has issues with Betfair’s subsidiary that he would like to resolve. Gural contends that many fans are wagering over that ADW platform from inside the Meadowlands and he believes he’s not being fairly compensated for those bets. Gural did not attend the press conference.

Betfair, which is the firm that created the concept of exchange wagering and remains the leader in the industry, has long sought a foothold in the U.S. The hope is U.S. gamblers will gravitate to exchange wagering with the same enthusiasm British punters have. In exchange wagering, bets are matched between players who want to bet on a horse and those who are willing to book or lay the bet at a certain price. Betfair takes a commission on winning wagers.

“We’ve been actively engaged in trying to bring to our consumers new ways to be entertained,” said Dennis Drazin, the president of Darby Development, which manages Monmouth Park. “We’ve been a leader in sports betting, been a leader in many other areas, and we believe exchange wagering is huge for our future. We want the fan who wants to come in and have a different, fun experience. That’s the goal here, to try to offer our consumers other opportunities besides the traditional pari-mutuel bet. This is entertainment.”

Betfair customers elsewhere in the world are charged a commission ranging from two to five per cent on winning bets. New Jersey customers will be charged 12 per cent. The higher rate is needed so that Betfair can give a reasonable amount of money back to the tracks, something it is not required to do in the U.K.

“I think we struck the right balance,” Betfair U.S. CEO Kip Levin said of the 12 per cent take and the need to compensate the tracks.

Betfair’s focus is primarily on Monmouth, but it is also eager to break into the standardbred market. New Jersey customers are not limited to making exchange bets on New Jersey tracks; they can bet on any track that has an agreement with Betfair. Levin said he is working with numerous tracks and said it is likely Betfair will take betting on, among others, races from Mohawk and Woodbine. He said no agreement had been reached yet with Freehold.

When it comes to exchange wagering on harness racing the problem could be the amount of liquidity in the pools. Overseas customers, the bulk of which are in the U.K., have been betting on U.S. thoroughbred races through Betfair for years and are comfortable with the runners. With the U.K. money, the pools for U.S. thoroughbred races can sometimes top the $100,000 mark. But Betfair has yet to offer any betting on North American harness racing and it’s possible its U.K. base will show little interest in wagering on a sport that they have no familiarity with. If that turns out to be the case, the Betfair harness racing pools could be quite small, which would be a turnoff to bettors.

Exchange customers will also be able to place bets “in running,” a concept pioneered by Betfair. During in-running wagering, betting does not close until the horses have crossed the wire, giving customers a chance to bet on horses that appear to be in a position to win or bet against horses that seem to be struggling.

“If you can play while a race is going on your attention is much more focused on what’s going on during the race,” Drazin said. “With the typical player, you make a bet, it’s over. If doing the in-play, there’s excitement the whole way. I think people will be motivated to try this.”

The prevailing sentiment is that harness races will lend themselves to in-running wagering better than thoroughbred races because they generally last longer.

Gural said he was confident his issues with Betfair and 4njbets could be resolved but he would not predict when. He also wouldn’t venture a guess as to how successful exchange wagering on harness racing might prove to be.

“I have no idea,” he said when asked his expectations for exchange wagering. “I asked that question to the people from Betfair when I met with them a week or two ago. I asked what their expectations were and they said ‘we don’t know.’ If they don’t know I certainly don’t know. It appears to be successful in England and other places and I think harness racing lends itself better to the in-race wagering than thoroughbred racing does.”

Gural clearly wants to get a bigger cut from bets made inside his building on than ones made elsewhere. That appears to be an obstacle to getting exchange wagering up and running at the Meadowlands.

“People come here and bet on 4njbets on their phone or iPad and they’re sitting inside the Meadowlands,” he said. “Everybody agrees that that should be treated as an on-track wager and our cut should be higher because of that. They can’t seem to be able to come up with the technology to see whether or not the bet was made from within the Meadowlands. I’m tired of that excuse. It’s unfair.”

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