The biggest development related to Betfair’s purchase of Television Games Network is whether it will bring exchange wagering to America.
A fixture in Europe for almost a decade, Betfair offers players a chance to play bookmaker. It’s an exciting idea, provided integrity and handle issues can be worked out.
The handicapper/bettor in me loves the idea of a betting exchange. For one, it’s easier to pick a loser than a winner. And horse racing needs innovative ideas to combat declining handle.
Exchange wagering gives more people more reasons to bet on horse racing, whether by laying odds on horses they don’t like or by betting on a horse at a few points higher than will be offered through pari-mutuel pools.
But given the integrity problems the sport already faces, such as tote security and performance-enhancing drugs, is now the right time?
Betting exchanges amplify the power of insider trading. In the pari-mutuel system, even if someone thinks they know Horse A is going to run poorly, they still have to pick the winner in order to leverage that opinion. The ability to bet on a horse to perform badly provides direct incentive for a poor performance.
The other issue will be to ensure racetracks and horsemen get a fair share of handle from Betfair. An estimate of how much Betfair will cannibalize existing pari-mutuel handle will have to be worked into that formula.
Betfair already has made progress in winning over the horsemen’s organizations. Tracks, particularly Churchill Downs Inc., will be another matter entirely.
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Mark Davies, the managing director of Betfair, said in answers to e-mailed questions that he does not see Betfair making any changes in TVG. He said that control of TVG may allow Betfair to make the signals from TVG tracks available to Betfair customers in the United Kingdom, which would bring more value to the British exchange.
****Hey BetFair Pirates, how about compensating the U.S. industry for the millions you stole from us over the past 10 years.************
"We would like to do so, and we would like to talk to the tracks about how it might work," Davies said.
*********If the Horsemen want anyone to believe them to be of honest integrity in their past position with the ADWs, negotiating with BetFair must include compensation on all previous events where wagering was conducted but not properly compensated for.**********
Now the TVG acquisition gives Betfair a foothold in the American market. Several racing officials said they believed Betfair was looking to purchase a regulated American gambling company to begin a lobbying effort to seek the legalization of betting exchanges in the United States - a political longshot that could hold enormous profit potential. But Davies said that Betfair has no intention at the moment of seeking authorization to run a U.S. betting exchange.
******Read "no intention at the moment...." Oh they have designs on our market. And the designs they have will undermine our already fragile sport. BetFair needs to go home. BetFair needs to be told no, now and at every turn.******
Nobody spends $50 million without having some idea of what lays ahead for the industry. It suggests somewhere, somebody might have already agreed to introduce legislation that would allow a betting exchange to take bets from TVG viewers.
Dig a little deeper and you might find this development tied to some of that Federal intervention we were warned about by Whitfield, et. al in Congress last summer.
You need to find that smoky room where these conversations are taking place Pete.
Somebody out there knows something.
Hi Pete,
Exchange betting in the US is light years away but it does put Betfair in good position to lobby should the Obama administration be more open to the idea.
Also, while the potential for insider trading is higher, the risk of getting caught is much, much higher. Wouldn't that be the best way to weed out the drug cheats? The Aus authorities screamed and kicked about integrity saying the sky would fall in if Betfair was licensed Down Under... and there's yet to be a single scandal because the stewards and Betafir's integrity unit monitor it very closely. No cash betting means nothing is anonymous.
There have always been bad eggs in racing - wherever there is money to be made, there will be someone with low morals. Finding a better way to catch them (the current system is obviously flawed and inconsistent) has to be a better way surely?
Surely you can bet against a single horse winning in a parimutual system by betting on every other horse in the race to win? As I understand it a 'lay' on BetFair is the equivalent both in outcome (i.e. that you're betting on one horse not to win) and in the value you get.
It's just math. BetFair makes racing more transparent, not less, by drawing attention to the cheats in the sport, and is a welcome addition to American racing in my opinion.
Betfair couldn't be worse for our Industry. They're pariahs.
If any group of horsemen approve signals going to Betfair owned TVG without first collecting moneys owed for the millions Betfair has gained from wagering on North American signals already they're idiots.
Talk to the Industry in the UK and see if they feel like Betfair has been anything more than pirates pillaging the Industry.
I agree with those who point out that the American tote system is antiquated and ripe for abuse. Currently, we are doing a terrible job of weeding out the cheats at the track (drugs) and in the tote system.
I am told Betfair's system is much more advanced than what we currently have (bets are processed almost instantaneously).
If Betfair could move our tote system forward technologically, that would be a great thing.
When is this racing in the US going to wake up. The sport is dying because paramutual betting is outdated. Bettors get ticked off when a horse that they bet goes from 2-1 to 7-5 while the race is in progress. Fixed odds betting is the sports savior and untill it happens racing will continue to die a slow death.
It's obvious there's a lot of ignorance regarding the capabilities of the current Tote System. With that said, Betfair will come in with some fresh ideas and some fresh blood which is a good thing for our Industry. I think the old guard in Europe saw pretty quickly how much they're power-base can be turned on it's head once young-bucks with some imagination take over.
Reading the posts here it seems that people may not be smart enough to realize the difference between where Betfair (oxymoron- bet...fair...get it?!?!) operates and the States.
We have 50 State jurisdictions. 50 sets of rules (of course not every State has parimutuel but you get the idea)/regulations.
In comparison to a single jurisdiction or single set of rules applying to exchange wagering that Betfair (anything but fair) deals with in Europe. The technology challenges should be minimal in comparison.
While Betfair will bring new dates to the dance I wonder how much they'll be contributing to purses and the Industry. Word has it that they pay very little in comparison to a parimutuel model. If we thought the purse question was bad before (ADWs, OTBs, etc. contribution) how will we operate with a partner used to taking our US content and paying little to nothing for it. Perhaps that's why they've had so much money to invest in technology.
Seems to me like it's the horsemen who are footing the bill for Betfair's success and innovation.
Betfair has been able to find insiders who cheat. This creates a deterrence to cheat in the future. When was the last time an insider betting scandal was uncovered in North America?, and don't think they don't happen.
Betting on horses per capita is much higher in Australia and Britain, so bringing exchanges here will help. As for horsemen cuts, that is a concern, and that is why I contend that the industry should set up their own exchange.
Low priced betting is what is growing today, dinosaur aged high takeouts is why racing is in trouble. Betfair is the future, and the future might be now.
I think Betfair will be good for the US. Bring on the innovations, bring on the new ideas. It's about time the Industry here did something new.
It's long past time for our tote companies to do something new and creative. I'm sure the tracks are chomping at the bit for the opportunity to work with Betfair.
Many of the posts here demonstrate a high degree of naivety regarding Betfair and the situation in Europe.
If you think that Betfair controls every scandal involving their site, you're fools. Talk to people in Europe regarding how insiders take advantage of Betfair's system.
And if you think that the horsemen are going to get the same or more under a Betfair fee/pricing model guess again. Get used to purses at about a 50% decline from where they are now.
I'm not saying there's not a place for some Betfair like innovation. But beware of he who claims to bring gifts with no strings attached. There's always a hidden agenda when money's involved.
As they say, be careful what you ask for, you just might get it.
Isn't it a minimal percentage that Betfair pays to purses? I've heard something in the neighborhood of 1%.
Am I missing something? How in the world will we support our horsemen and the owners/investors in our sport on 1% of handle.
Betfair...bahhhhhhh!!!
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