U.S. Horse Racing
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BetFair, which recently opened a tech hub employing about 75 people in San Francisco, is planning to release a product in May that could not only transform betting on ponies but could also save the declining fortunes of U.S. tracks.
Here's the deal: BetFair (annual global revenue of just over $500 million) has developed the exchange concept of betting, in which online gamblers place bets against one another. This is easier to explain when two teams are involved rather than 10 horses, so let's start with a football example: Say you want to bet on the 49ers against the Steelers and want to get 3 points. If there's a bettor who wants to take the Steelers and give 3 or more points, BetFair brokers the bet and takes a small commission from the winner.
The principle is the same with horse racing: If I want to bet on Italian Stallion to win and another bettor thinks Italian Stallion won't finish first, BetFair will broker the bet and take a commission.
Exchange betting isn't yet authorized in California, but a law passed last year will make it legal starting in May, which, not coincidentally, is when BetFair plans to open its online exchange.
Not only does BetFair let racing fans bet against one another, it allows them to bet in ways they can't with traditional wagering.
"You can keep betting in the middle of a race," says Stephen Burn, head of BetFair's San Francisco office. Betting can continue until the results are posted, so "if there's a photo finish, you can keep betting until a result is announced."
BetFair is working with the California Horse Racing Board as well as with race tracks to strike deals that will enable BetFair to earn a profit while offering the tracks a substantial cut. This is how BetFair, if volume is strong on the site, could help save the state's declining horse racing industry.
BetFair is proposing a 10 percent commission on racing wagers, with two-thirds of that going to the track. So if you bet $30 and win, the commission would be $3. BetFair would get $1, and the track where the race is held would get $2. The loser of the bet pays nothing.
That seems like a generous take for the tracks, but BetFair's Burn believes that the proposed split will benefit everyone.
"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 viable, sustainable horse racing industry."
Read more: http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2011/11/30/NSRN1M49PB.DTL#ixzz1fJCypDeq
Here's the deal: BetFair (annual global revenue of just over $500 million) has developed the exchange concept of betting, in which online gamblers place bets against one another. This is easier to explain when two teams are involved rather than 10 horses, so let's start with a football example: Say you want to bet on the 49ers against the Steelers and want to get 3 points. If there's a bettor who wants to take the Steelers and give 3 or more points, BetFair brokers the bet and takes a small commission from the winner.
The principle is the same with horse racing: If I want to bet on Italian Stallion to win and another bettor thinks Italian Stallion won't finish first, BetFair will broker the bet and take a commission.
Exchange betting isn't yet authorized in California, but a law passed last year will make it legal starting in May, which, not coincidentally, is when BetFair plans to open its online exchange.
Not only does BetFair let racing fans bet against one another, it allows them to bet in ways they can't with traditional wagering.
"You can keep betting in the middle of a race," says Stephen Burn, head of BetFair's San Francisco office. Betting can continue until the results are posted, so "if there's a photo finish, you can keep betting until a result is announced."
BetFair is working with the California Horse Racing Board as well as with race tracks to strike deals that will enable BetFair to earn a profit while offering the tracks a substantial cut. This is how BetFair, if volume is strong on the site, could help save the state's declining horse racing industry.
BetFair is proposing a 10 percent commission on racing wagers, with two-thirds of that going to the track. So if you bet $30 and win, the commission would be $3. BetFair would get $1, and the track where the race is held would get $2. The loser of the bet pays nothing.
That seems like a generous take for the tracks, but BetFair's Burn believes that the proposed split will benefit everyone.
"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 viable, sustainable horse racing industry."
Read more: http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2011/11/30/NSRN1M49PB.DTL#ixzz1fJCypDeq
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I don't know where exactly to begin with this but perhaps a good place would be to again emphasize that approval of exchange betting in the US will require Federal statue changes, and the Congressional hearings last month were not exactly a win for Betfair. Beyond that:
"BetFair is working with the California Horse Racing Board as well as with race tracks to strike deals that will enable BetFair to earn a profit while offering the tracks a substantial cut. This is how BetFair, if volume is strong on the site, could help save the state's declining horse racing industry. BetFair is proposing a 10 percent commission on racing wagers, with two-thirds of that going to the track. So if you bet $30 and win, the commission would be $3. BetFair would get $1, and the track where the race is held would get $2. The loser of the bet pays nothing." First of all I'll assume that by the commission going back to the "track", you mean all the racing industry entities (including the State) that currently receive a percentage of the commission levied on all monies wagered through tote. The big question is, why would the "track" with a takeout currently in place ranging anywhere between 18pc to 28pc depending on the type of wager going through tote, accept a takeout equal to about 7pc (track gets 2/3 of a 10pc commission), not to mention that if those two counterparty trades went through tote, both wagers ($60) would be subject to commission? Furthermore, one issue that NO ONE has been able to address so far, how many of those $30 trades going through the exchange (Betfair) are not really new money but rather money scavenged from tote betting. Many issues need to be resolved in a rather complex US racing tracks/horsemen/regulators environment but ultimately this will be decided as usual by......MONEY. Betfair simply will have to pay more to play. And if they do, then expect UK industry/regulators to knock on Betfair's door asking some very interesting questions. |
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This should dramatically benefit other exchanges if this goes through. Commissions as low as 2.4% and no p.c. charges. Don't think they contribute anything to the racetracks.....
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.....so are "other exchanges" parasites?
.....how exactly will that "dramatically benefit other exchanges" when bettors based in the US will ONLY be allowed exchange betting on the APPROVED exchange platform? Or are you naive enough to think that Betfair is spending an enormous amount of money to lobby this through so "other exchanges" can benefit? .....UK based customers will continue with the existing commission structures even if the US proposal ultimately gets approved, in case you haven't clued in yet. So how will that "dramatically benefit other exchanges" if it hadn't done so already with last July's premium charges change? .....if you are to continue to comment on this subject, take the time to read all the stakeholders position papers submitted so far for consideration in the Congressional review, and not constantly comment solely on the wishful thinking that some OTHER exchange will grow to become the NEW Betfair, on the back of premium charges changes or expansion in the US market. They haven't so far and they never will. .....if you are more than just a casual punter, Betfair is where you do your trading. End of story. |
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"So how will that "dramatically benefit other exchanges" if it hadn't done so already with last July's premium charges change?"
Since July the liquidity at the purple place (2.5% commission) has increased dramatically making it ideal for people contending with P.C.'s. I have no problem matching $100 bets there in most cases but still have to bet here in certain situations. Can't beat Betfair but the P.C. .... |
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Evidently I need to reassess my definition of the word "dramatically".
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