Sporting Post-Betting Exchange article

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Sporting Post-Betting Exchange article

14 years 1 month ago
#132561
Interesting article in sporting Post reporting on an official study showing that exchange betting has had a positive effect on horseracing,wherever they operate.....Damn,now that there is evidence that it makes sense, is a guarantee that it will be resisted even harder by our bunch!

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  • Bob Brogan
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Re: Re: Sporting Post-Betting Exchange article

14 years 1 month ago
#132565
The only positive i can see is for the punters,stakes are falling big time in the UK

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Re: Re: Sporting Post-Betting Exchange article

14 years 1 month ago
#132591
Have stakes been improved or reduced by Betfair sponsorship?
I don't think they ever expected to compensate every other negative.....perhaps you should read the report Hibs,and do your best to understand it ...lol

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  • Bob Brogan
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Re: Re: Sporting Post-Betting Exchange article

14 years 1 month ago
#132604
Rob the Levy they talk about in the report has nearly halfed since this report was done..

It`s not all about whats put back in by Betfair/exchanges is it?

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  • Don
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Re: Re: Sporting Post-Betting Exchange article

14 years 1 month ago
#132670
www.sportingpost.co.za/2011/04/26/frontp...g-opens-new-markets/

Eugene Christiansen, the founding partner of New York-based firm Christiansen Capital Advisors, LLC presented the findings of a major study entitled “Exchange Betting and the United States Thoroughbred Racing Industry”.

The report, available in its entirety at www.ccaexchangereport.com , was commissioned by Betfair subsidiary TVG. It examined two decades of trends in parimutuel wagering in the U.S., alongside handle and purse trends in the U.K. and Australia, where Betfair’s exchange wagering platform has been implemented.

“The bottom line is that there is good news here”, Christiansen said. “In all three jurisdictions [studied]–the United Kingdom, Australia and the Australian states–handle, or consumer spending on horse races, and purses have all increased since Betfair’s exchange began operating in these jurisdictions.”

“The conclusions are fairly clear. One, people like exchange betting—exchange betting appeals to people who were not currently involved in either fixed odds betting or pari-mutuel betting. The introduction of exchange wagering seems to have revitalized or reinvigorated betting in the United Kingdom and in Australia. We have no reason to suppose, from the data we examined, that it would have any different effect in the United States.”

Christiansen explained that the bettor–or consumer– has been asking for lower prices (i.e. a lower takeout) for years, and that the pricing model for exchange wagering directly addresses consumer concerns. “The outlook for racing in the United States is not very good” warned Christiansen. “I was looking at the month-over-month handle and purse trends in the United States for the first quarter of 2011, and I noticed that through the first quarter parimutuel handle is down about 8.5% while purses are up 5.3%. Purses, as it is discussed in this study, are heavily supported or subsidized by casino games…which contributed in 2009 almost 30% of the U.S. Thoroughbred purse structure.”

“What these numbers say is that consumer spending on VLTs and slot machines at racetracks has recovered from the financial crisis and recession, but parimutuel betting has not.”

Christiansen warned that something must be done to reverse these trends, and said that, since consumers in other countries have responded positively to exchange wagering, it should be considered an option to revitalize the Thoroughbred industry in America.

Stephen Burn, CEO of TVG and Betfair, said in a statement “The Christiansen study confirms through empirical evidence what we have observed over the last several years—that the introduction of exchange wagering has been an engine for horse racing growth in the UK and Australia, and would have a similar effect in the U.S.”
(from Thorougbred Daily News)

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Re: Re: Sporting Post-Betting Exchange article

14 years 1 month ago
#132674
Yep it was the thorough bred times where i read the article

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Re: Re: Sporting Post-Betting Exchange article

14 years 1 month ago
#132676
www.harnesslink.com/www/Article.cgi?ID=82612 (follow this link if you would like to read the feedback as well- some amusing!)

Exchange wagering: salvation or our demise?
Harnesslink News Room 10:42 AM 03-Aug-2010 NZTCOMMENTS(11)TRACKBACKS(0)
The most widely reported racing news out of New Jersey of late involves the failure of the executive branch to appreciate the overwhelming value horse racing brings to the state. Simply put, the plan outlined by the Governor's Gaming, Sports and Entertainment Advisory Commission preserves Atlantic City's boardwalk at the expense of every racetrack, training center, breeding farm and horseman in the Garden State.

Hopefully, a majority of legislators at the state capital in Trenton will give the Commission's recommendations their just due, and scratch them as sick.

Somewhat obscured by the fanfare surrounding the Governor's plans to euthanize horseracing is the June 28th unanimous vote of the General Assembly to make New Jersey the first state in the nation to permit exchange wagering. Despite the dubious future of live Thoroughbred and Standardbred racing in the state, understanding the potential benefits and pitfalls this type of betting can bring to the industry is important. Andrew Black, who founded the prominent British online gambling concern BetFair, now the world's leading betting exchange, developed exchange wagering a decade ago. It is a form of gambling in which two or more persons place directly opposing wagers on the outcome of horse races and sporting events. In the typical case, exchange wagering allows a bettor to "back" or wager on a selected horse to win, with another bettor "laying" or wagering on that same horse not winning. A back and a lay become matched when a bettor lays at the same price at which another bettor backs that same outcome, with the amount subject to the lay being proportionately commensurate to the amount subject to the back.

Once the outcome of the race or races is determined, funds will be transferred from the exchange wagering pool to the bettor or bettors that won wagers in that pool, and applicable transaction or other fees will be levied by the exchange wagering licensee for use and distribution as provided by the commission's rules and regulations.

The bill passed in the General Assembly (A-2926) now goes to the state Senate's State Government, Wagering, Tourism and Historic Preservation committee for consideration. Inasmuch as both the Senate and General Assembly adjourned for the summer in early July, there will probably be no further debate or action on the proposal for at least a few months. When the debate resumes, several issues involving this introduction should be considered.

Obviously, any legitimate attempt to increase handle must be lauded. Unlike traditional pari-mutuel wagering, where the potential payout for a bet reflected at a point in time on the tote board often drops precipitously as the field is in motion, exchange wagering allows the bettor to name his own odds in the hopes of luring a match. While only one will win, the potential payout for both punters is guaranteed. This dynamic has proven highly attractive to serious gamblers across the pond and in places like Australia, and there is little doubt that the properly marketed concept will garner significant curiosity, if not strong interest, when it is introduced.

While the New Jersey bill requires that all exchange account holders must be state residents, the introduction contemplates the possibility of in-state wagers being matched with those of residents outside the State registered with an authorized exchange operator in another jurisdiction. Moreover, the bill permits exchange wagering on out-of-state as well as in-state races. These aspects of the legislation can only serve to enhance the potential for increased handle.

Furthermore, while the proposed legislation contemplates wagering in person or direct telephone calling, the law would also permit the wager to be submitted by the most obvious means; that of, "by communication through other electronic media." Clearly, the lawmakers in Trenton have attempted to fully maximize the benefits of the federal exemption granted to horseracing pursuant to the Unlawful Internet Gambling Enforcement Act of 2006 (UIGEA).

While the potential for positive industry effects is present, so too is the prospect for disaster.

First, the bill contemplates that the New Jersey Racing Commission will license the New Jersey Sports and Exposition Authority, who in turn will have the right to enter into a contract with a private entity to operate the exchange and act as an agent of the authority in all exchange wagering matters. With the prospect of New Jersey's premier racetracks becoming privatized in the near future, the long-term survival of the authority is doubtful. Thus, a single operator beholden only to the commission, and not to the racetracks, horsemen or breeders, will exclusively control the wagering platform.

The foregone conclusion is that this entity will be Betfair. The British group recently purchased the online wagering operator Television Games Network (TVG) for $50 Million, ostensibly to lobby in the U.S. for just the type of legislation New Jersey has proposed. In fact, Betfair/TVG sponsored the $750,000 United Nations Handicap at Monmouth Park run on July 3rd, just days after the bill's passage in the lower legislative house in Trenton. Having the control of wagering in the hands of a standalone Advance Deposit Wagering (ADW) entity, not the industry, brings the potential for all of the ills that have befallen the New York racing industry at the hands of its regional off-track betting system.

Along this line, it is noted that rather than establish a set percentage of handle either by statute or contract for the purpose of funding overnight purses, the bill contemplates the payment to purses of 50% of exchange revenues retained after payment of "all reasonable and necessary expenses." This vague wording could haunt horsemen forever. As with bankrupt NYC OTB, will these reasonable and necessary expenses include highly inflated executive salaries, a fleet of automobiles, a seemingly unlimited expense account, etc.? At the end of the day, will the net profit split for the horsemen amount to a pittance in relation to what they now receive from traditional pari-mutuel takeout?

NYC OTB owes New York's Thoroughbred and Standardbred tracks, horsemen and breeders tens of millions of dollars in statutorily required payments. They owe out-of-state simulcast outlets even more. For the last year, this debtor has tried to persuade the New York legislature to allow it to pay the racing industry from its net after expenses; a net that is nothing. The danger here is more than apparent. Enhanced handle is less than nothing if the industry sees little or none of it, and part of it is simply diverted from traditional pari-mutuel handle bet at the tracks.

Maybe the most distressing issue to be faced is how exchange wagering threatens the integrity of the sport. In this regard, it is unnecessary to conjure hypothetical scenarios. Over the course of the last few years, numerous highly publicized incidents have plagued the British turf that have been directly connected to the "back and lay" concept.

Consider that while it's impossible to guarantee that a horse will win, it can assuredly be guaranteed that a horse will lose, provided its connections are in on the fix. Here, the concept of the laying odds that a horse will lose opens the door of appearances of impropriety quite wide. In 2007, a six-time champion jockey and two other riders were accused of assisting exchange bettors by agreeing to make horses lose in 27 races from 2002 to 2004. The trio actually won six of the 27 races.

The entire case unraveled when the prosecution's expert witness, an Australian racing steward, admitted that his testimony regarding the failure of the jocks to "ride-out" their mounts was based on Australian, and not United Kingdom racing rules. His ignorance of U.K. rules was so glaring that the judge took the matter out of the hands of the jury and directed dismissal. Despite the acquittals, horse racing suffered a significant black eye from all of the bad exposure and notions of mistrust that enveloped the U.K. during the investigation and trial.

On July 14th of this year, major rracehorse owner Harry Findlay won his appeal against a six-month ban from the sport. Findlay, who owned the 2008 Cheltenham Gold Cup winner, received a six-month ban on June 10th after admitting to laying (betting against) his own horse on two occasions in violation of British Horseracing Authority rules. Finding no evidence of corrupt intent, the appeal board reduced the fine to a £4,500 fine (about $7,000); the total he won from breaking the rules. While Findlay did, in fact, lay bet his own horses, he was a net backer of both. This means that Findlay lay bet against the horse, but jumped in with more money to back it than lay when the odds were right. Thus, it was determined that Findlay as an owner was employing an illegal wagering strategy, but not a corrupt practice or conspiracy.

Others owners in violation of the rule have not fared so well. In 2004, the British Disciplinary Panel suspended an owner for six months because at the time he laid his gelding to lose, he knew it was no longer running in the race (scratched) and was thus impossible to lose. In 2009, the Panel indefinitely suspended an owner who "shared" a Betfair account with a friend and denied knowledge of his friend's lay bets on his losing horses.

Also in 2009, the Panel imposed a one year ban on owners who laid heavily on their mare and earned a substantial sum after she was pulled up with muscle spasms two furlongs into her race. Their rejected defense was that they leased the horse to a trainer and, as lessors, were permitted to lay under rules in their native Ireland. In 2008, another owner was ruled off for eight years for laying seven of his own horses at a hefty profit utilizing the Betfair account of a co-conspirator. Worse, it was established that the owner received inside information from a trainer and a jockey who was found to have made insufficient effort on four of the losing mounts in question. The duo also received bans of 2 ½ and 4 years respectively.

Curiously, the bill passed by the New Jersey General Assembly is silent as to the propriety of exchange wagering by owners, lessors, lessees, trainers, stable employees, jockeys and drivers. It will presumably be left up to the commission to decide the rules in this regard, how to effectively enforce them, and the measure by which punishment for violation is to be meted out. Still, the mere discovery and disclosure of a violation can have adverse consequences on racing. While racing scandals raise their ugly heads every so often, the lure of the lay bet would seem to present fertile opportunity for nefarious players to do what they do best and ruin the reputation of our sport.

When the New Jersey State Senate reconvenes and takes up A-2926, it is hoped that exchange wagering will be debated from all angles, and that a final compromise bill will ensure that the industry, especially its horsemen and breeders, as well as the wagering public at large will be afforded every possible safeguard. If exchange wagering is finally made law in New Jersey, other states will look to the legislation as a point of reference. While certainly not the most critical concern facing the state's racing and breeding industry, poorly crafted exchange wagering legislation can impact every jurisdiction for years to come.

Chris E. WIITSTRUCK Esq., an attorney and Standardbred owner, is the founder and coordinator of the Racehorse Ownership Institute at Hofstra University, New York and a charter member of the Albany Law School Racing and Gaming Law Network.

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Re: Re: Sporting Post-Betting Exchange article

14 years 1 month ago
#132679
www.osga.com/artman/publish/article_8751.shtml

xchange Wagering Could be a Boon for New Jersey if Done Right

By Hartley Henderson - Exclusive to OSGA
Feb 3, 2011, 13:08


Last year New Jersey and California both considered exchange wagering as a new option to increase revenues at state race tracks and in the fall the Senate and Assembly in New Jersey passed the motion. On Monday Governor Christie signed the bill. Exchange wagering is a fairly new, exciting internet option for wagering on horse races that has been a boon to Betfair, a sportsbook based in England. With exchange wagering players bet with each other on the outcome of races. They can bet horses to win, place (top 3 places), forecasts (exactas) or on head to head matchups at Betfair. While it’s uncertain what options will be available in New Jersey, win and head to head matchups seem to be almost a surety.

Unlike the traditional horse racing model where bettors wager into a common pari-mutuel pool, in exchange wagering bettors offer odds that they want for a horse and other bettors take the wager. So for instance if a horse is 3/1 on the tote someone may make an offer willing to back the horse on the betting exchange at 7/2 odds. Another person may agree to those odds, thinking the offer is fair and the deal is struck. Unlike with pari-mutuel wagering the final odds on the tote board are irrelevant. The price agreed to is what the bettor receives. So that horse that is 3/1 on the tote at the time of the deal may go off at 6/5 or 10/1 odds on the final pari-mutuel tote but the bettors receive the 7/2 odds struck. This is a major advantage of exchange wagering. Bettors know exactly what odds they are getting or giving. There is nothing more frustrating to bettors than wagering on a horse expecting certain odds but receiving much lower odds due to late support.

Another difference between pari-mutuel and exchange betting is the ability to bet against a horse. With the traditional horse betting model, bettors must back a horse but with exchange wagering the option exists to bet on the horse to lose. So for example if a horse is 4/5 on the tote board, bettors could decide they don’t like the horse and may offer even money that the horse will lose. Others may see that as a good bet and will back the even money offer. As long as the horse doesn’t win those who bet against (lay) the horse will get paid. This has caused some concern among those in the industry that it could lead to corruption but has been proven false as will be shown later.

One other benefit of exchange wagering is the ability to bet while the race is being run. While this is a foreign concept to Americans the option of betting while the race is being run on all UK races along with Triple Crown and Breeder’s Cup races it is quite popular at Betfair. Moreover it has often provided massive payoffs. There have been instances in UK races where horses appeared to be faltering as they entered the stretch and naturally this is often an indication that the horse is all but out of the race. Consequently, bettors thinking it’s a sure thing that the horse will lose will quite often offer 999/1 odds (the maximum Betfair’s system will allow) that the horse will lose the race. And at times, the horse will find a second wind and come back to win the race. In fact 2 years ago, an article was published in British newspapers about bettors who cashed in 999/1 tickets on a horse that was 2/5 on the tote board under those exact circumstances. The horse looked to be pulling up but for whatever reason found a second wind and bolted forward to win. Naturally, the excitement with the new technology, the potential of large payouts and the ability to take your own fixed odds has been quite attractive to the younger generation that has all but abandoned the sport. In fact Betfair has estimated that about 35% of its revenue comes from horse racing.

Without question exchange betting could prove to be a major boon to New Jersey and to horse racing in general. Bill Pascrell III, a partner at Princeton Public Affairs Group, and an advocate for gambling in the state suggested that the exchange wagering will attract a whole new generation of bettors that have turned away from the sport. Pascrell noted that most tracks in New Jersey and elsewhere are still predominantly attended by stereotypical horseplayers, i.e. older bettors with their heads glued to the program or racing form and keeping to themselves. The younger generation is looking for a more interactive way to wager, as they do currently with online poker, and also want to use computers to wager. Exchange wagering offers both. Asked if the PPAG or the tracks expressed any concern about cannibalization of the existing product with exchange wagering, Pascrell stated that the racetracks were all consulted and are on board.

“The ones who will bet on exchange wagering are not the ones who go to the racetrack now”, Pascrell commented. Consequently he believes the racetracks are excited about the possibility of multiple domains for wagering. I did speak to a media person at one of the New Jersey tracks and while he asked not to go on record until everything was finalized he did state that the tracks were consulted and as far as he knows have no objections to the idea.

I asked Pascrell as well if TVG (Betfair) will be the likely company to run the exchange but Pascrell said at this point it is premature to speculate who will be in charge of the exchange. He did, however, note that a private entity will almost surely be involved in running the betting exchange and he noted that Governor Christie is currently seeking out the opportunity to privatize the Meadowlands. Pascrell said that the state sees a private/public partnership in horse racing as the best opportunity for all to benefit. Pascrell did note that the Global Betting Exchange in Dublin, a company which owns Betdaq, has been a major player in the negotiations leading up to the Senate approving the idea. Again, whether Betdaq, Betfair or another company runs the exchange is still uncertain.

As mentioned earlier I also stated to Pascrell that in the past racing associations and legal bookmakers expressed concern that the ability to bet against a horse could cause corruption. I was curious if he heard similar ramblings.

“The only ones who complain about those things are the ones who don’t understand the regulatory model and complain about anything.” Pascrell answered. “In fact the betting exchange will be well regulated and should cut down on corruption.”

In fact that exact scenario happened with Betfair in 2004. Unusual betting patterns at Betfair led to the British police examining a race involving top jockey Kieren Fallon and 15 others. This led to even more records being summoned from Betfair which indicated that Fallon and 5 others had fixed over 80 races. All parties involved in the cheating were charged and suspended. Without the evidence of unusual betting patterns, which could only have been identified through the betting exchange, it is unlikely anyone would have been caught. Because the younger generation have stated in previous surveys that cheating was one of the reasons they abandoned the sport, the betting exchange could only help but alleviate those concerns since it will identify suspicious betting.

I also commented to Pascrell that the high takeout on horse racing is one of the main variables that has driven the younger generation away from the sport and was wondering if it would be lower with exchange wagering. For example win, place or show wagering generally has a 17% takeout by the racetrack to pay for track maintenance, purses and other overhead but such a takeout could be devastating to the success of the product. For example if someone wagers $100 on a 5/1 shot on the exchange, their interest could quickly dwindle if the expected $500 profit is returned to them with only $415 after the track takes their percentage. Since the takeout is already built into the tote odds, bettors generally don’t notice it as much with traditional wagering. The high takeout is even more accentuated with match betting. Several years back Triple Crown races offered head to head wagering. The TV broadcast tried to make it seem like it was a great new betting opportunity but odds of 1/2 on the favorite and 1/1 on the longshot just highlighted what a bad bet it was. The takeout on that bet is still around 17% but is a turnoff at the odds. Pascrell said that he would expect that the takeout would be lowered on a betting exchange to be competitive with other options to bettors but he also was quick to point out that the regulations when written will be the final determinant.

Lastly I asked Pascrell if he heard any negative rumblings from the federal government and DoJ with regards to exchange wagering but he said they had not weighed in. “This is lawful since it is state sanctioned,” Pascrell noted and the Interstate Horse Racing Act as well as the UIGEA clearly allows the activity if it is done by a state. Moreover because the betting exchange is separate from the pari-mutuel pools there is no concern about wagering at other tracks that don’t offer a betting exchange since the betting exchange figures will not go into the simulcast pools.

Exchange wagering is indeed a new and exciting betting opportunity and if done correctly could bring a whole new generation back to the sport. Whether they go to the track or watch and wager at home the ability to bet at computer terminals or on mobile devices at guaranteed odds will be appealing. However, today’s younger generation expects value for their wagering dollars and will quickly turn away if it isn’t there. Consequently, if this is going to succeed in New Jersey they will have to lower the takeout on the exchange and prove to the younger bettors that racing is on the up and up. Horse racing was starting to lose interest to the younger generation in Britain as well, but Betfair helped spur interest in the new generation to horse racing thanks to the exchange. Bill Pascrell noted that horse racing is just one product that “when parlayed with PPAG and iMEGA’s other proposed ventures”, i.e. sports betting, online poker and interactive casino wagering will help bring interest to all wagering options for both the younger generation and even the older generations that are willing to try new avenues. In the end it will all mean more revenue for the state and the country.

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Re: Re: Sporting Post-Betting Exchange article

14 years 1 month ago
#132690
still cant help but feel that different wagering offerings wont in the long run 'fix' the following to horseracing - there still needs to be a education of the current and new generation so that they feel an emotional connection with the horse and horseracing itself so that a fanbase is grown.

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Re: Re: Sporting Post-Betting Exchange article

14 years 1 month ago
#132703
There is no doubt that betting exchanges,in isolation,will not have a great impact on racing but as I have mentioned before,a whole new world opens up as people get their head around trading and laying bets,it should develop a new wave of gambler types.This would seem to be the point of the report as well.......the problem is that it will be up to our lot to direct some of that new activity to racing?

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Re: Re: Sporting Post-Betting Exchange article

14 years 1 month ago
#132704
is that not the whole of Phumelela's drive with their involvement in betting programmes abroad? to harness some of this market?

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Re: Re: Sporting Post-Betting Exchange article

14 years 1 month ago
#132866
1. The study was initiated and paid for by Betfair.

2. Does anybody think the results of the study would show that Betfair is bad for racing?

3. Betting exchanges will not work in the United States because they offer too small of a cut to prize money.

4. Betting exchanges act as a parasite on the game. Unless the people that put on the show get paid or have a chance to be rewarded, the equation does not work.

5. Betting exchanges are good for one thing and one thing only: they promote larceny.

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