NJ Exchange Wagering set for launch; UPDATE: Handle growing steadily

[ScottJ]

Originally Posted by Kasept

[b]Overall if First Prize Dixie won, I stood to make $166.03 ($324.64 minus $158.61). If he didn’t win, I would lose $1.67 ($11 minus the $9.33 from my buddy the bot). That means I was getting 98-1 on First Prize Dixie, who eventually went off at 18-1 at Louisiana Downs.

This is precisely why exchange wagering represents a huge potential risk to both on-track and off-track existing handles : you have a true ability to hedge your bet, similar to using puts and calls from options trading. [With proper odds swings, you will be able to create winning positions without the race being run.]

[Kasept]

Helpful Blogspot on Exchange
http://exchangewagering.blogspot.com/

[Kasept]

Betfair encouraged by initial response to exchange wagering in New Jersey
By Matt Hegarty

http://www.drf.com/news/betfair-enco...ing-new-jersey

An official for Betfair U.S., which launched the first exchange-wagering platform in the U.S. two weeks ago, said in a statement on Friday that the company has been pleased with “several positive indicators” for the operation, but the company declined to provide detailed figures for betting or for the number of accounts opened on the platform.

In a statement in response to questions, Kip Levin, the chief executive officer of the subsidiary that owns the platform, said that the company has been encouraged by the amount of “liquidity” on the platform – a measure of the number of bets being offered on the site for each race – and by the volume of betting from players who were not previously involved in account-wagering in the state of New Jersey.

“The liquidity on the races offered to New Jersey players has been strong – that’s a good sign of the level of interest and, as people get more comfortable on the exchange, we expect it to grow,” Levin said in the statement.

Exchange wagering was pioneered by Betfair in the United Kingdom 15 years ago. The practice allows customers to establish odds on horses and bet amongst each other at those prices. The launch of the New Jersey platform is being closely watched by a variety of U.S. racing constituents, many of whom have been reluctant to strike deals with Betfair because of uncertainty over how the operation will affect the U.S. product.

Betting in the U.S. on the platform is limited to residents of New Jersey wagering while they are physically in the state, but customers of Betfair’s platform in the United Kingdom can lay and place bets with the New Jersey players. To date, exchange wagering is being offered on a handful of Thoroughbred tracks, including Monmouth Park, Woodbine, and the tracks running live in Louisiana and West Virginia.

It is unclear whether the majority of bets are coming from New Jersey players or British players. A portion of the British money is almost certainly coming from robotic wagering programs that seek to place and lay a multitude of bets to capture spreads between wagers on a single horse and grind out other small advantages that can be exploited on the platform using sophisticated risk-management strategies.

In his statement, Levin said that about two-thirds of the betting volume on the platform has come from people who were not previously customers of 4NJBets, the New Jersey account-wagering platform owned and operated by Television Games Network, which is owned by Betfair. TVG’s operation is the only licensed account-wagering platform in the state.

“That’s an area where we continue to focus, bringing new users to racing,” Levin said.

Over the past two weeks, many horseplayers have expressed curiosity over how the platform works and have indicated that they have successfully placed bets on horses at higher odds on the exchange than the odds through the parimutuel system, leading to significant price advantages. But others have also expressed trepidation with the prospect of laying odds on a horse, in large part because the practice is unfamiliar, but also because the liability of laying a horse generally exceeds the return.

“When it comes down to laying $500 to win $100 it’s not easy to pull the trigger when your whole life you’re doing the opposite,” said one gambler who has been using the system since the launch.

Dennis Drazin, the president of the horsemen-led company that operates Monmouth Park, said that he has been pleased with the rollout, but he said that many bettors have yet to fully embrace the platform because of their unfamiliarity with how it works. Monmouth Park is a partner in the platform, and receives an undisclosed portion of the revenue from wagering.

“It’s going to take time because as we’ve seen there’s a pretty big learning curve,” Drazin said. “There are a lot of people out there who are using it, but it’s more that they are fiddling with it.”

Frank Zanzuccki, the executive director of the New Jersey Racing Commission, said that the commission has not received any correspondence related to the site since it launched. The commission spent several years writing regulations governing the operation of the site.

[declansharbor]

Does anybody know whether or not Betfair has representatives on site at Monmouth guiding customers in need or helping further explain the platform to the bettors that might be struggling with the concept of it all? My cousin lives in NJ and seemed pretty interested in the idea but he would NEVER pull the trigger if he were to get no assistance from those 'in the know'.

"We all know he treats nickels like manhole covers". - Johnny Sacrimoni

[Kasept]

Originally Posted by declansharbor

Does anybody know whether or not Betfair has representatives on site at Monmouth guiding customers in need or helping further explain the platform to the bettors that might be struggling with the concept of it all? My cousin lives in NJ and seemed pretty interested in the idea but he would NEVER pull the trigger if he were to get no assistance from those 'in the know'.

"We all know he treats nickels like manhole covers". - Johnny Sacrimoni

Believe so, but will confirm..

Meanwhile: http://exchangewagering.blogspot.com/

[jms62]

Keep an eye open for seminars. They ran one 2 weeks ago. I didnt attend. If I receive any emails on future seminars I will post here.

[Kasept]

Handle on N.J. exchange wagers doubles from first-year average
By Matt Hegarty

Wagering on Thoroughbred races on the betting exchange launched by Betfair US in New Jersey in 2016 has nearly doubled since last year on a per-month basis, according to records obtained from the state’s racing commission.

Average monthly handle, measured in matched bets on the exchange, has been $1.11 million in April, May, and June this year, according to the records, up from an average of $613,524 for the 12 months running from April of last year, when the exchange was launched, through March of this year. The records were heavily redacted by Betfair prior to the release, and some small amounts of matched bets on races in the United Kingdom do not appear to be reflected in the unredacted portions, according to officials of the state racing commission.

Kip Levin, the chief executive of Betfair US, said on Tuesday that the company is not currently focusing on handle numbers but rather on the behavior and participation rates of the exchange’s customers, which is limited to residents of New Jersey who are physically located in the state and customers of Betfair’s service in the United Kingdom (provided those U.K. customers are betting with a New Jersey customer).

“It’s less about the growth and more about what the data says,” Levin said. “That has exceeded our expectations.”

According to Betfair, 70 percent of the handle on the New Jersey exchange has come from customers who signed up for the exchange or the company’s account-wagering operation, 4NJBets.com, after the exchange was launched last year. The other 30 percent has come from players who were already customers of 4NJBets.com, which is owned by Betfair through its TVG subsidiary and is the only account-wagering operation authorized to operate in the state.

Customers of both 4NJBets and the exchange must maintain separate deposit accounts but can transfer funds between the accounts. Levin said that 4NJBets customers who have not opened accounts at the exchange have bet less in a four-month period in 2017 than what they handled during the same period in 2015, while 4NJBets customers who are also customers of the exchange have handled more when comparing the same time periods. In addition, those dual customers place wagers on more days than the customers who only have accounts at 4NJBets.

Levin also said that, according to the company’s data, a $100 deposit on Betfair is churned, or re-bet, at a much higher rate than a $100 deposit on 4NJBets. The exchange allows customers to post prices on horses and accept bets from other customers, and vice versa.

The handle numbers being generated this year by customers of the exchange would translate to approximately $13.3 million on an annualized basis. Total parimutuel handle on all U.S. races last year was $10.74 billion, according to The Jockey Club.

Levin said that the New Jersey exchange is not yet profitable, but that the company was solidly behind the operation.

“We’re not making money off this,” he said. “We’ll keep pushing even if it takes five years to break even. The point of all this is to bring innovation to this industry.”

According to the records, the most popular signal on the exchange for the April-June period has been Woodbine, slightly edging out the home-state Monmouth Park, which opened its meet in mid-May. Other popular signals include Evangeline Downs and Louisiana Downs in Louisiana, Charles Town in West Virginia, and Penn National in Pennsylvania.

A number of large racetrack companies have yet to allow their signals to appear on the service, including the tracks owned by The Stronach Group – which includes Santa Anita Park in Southern California and Gulfstream Park in Florida – and the tracks operated by the New York Racing Association. Other tracks that are not available include Del Mar, Churchill Downs, and Keeneland.

Two weeks ago, Kentucky Downs, which is scheduled to run five days this September, asked the Kentucky Horse Racing Commission to approve a request to add its races to the exchange. Although a committee of the commission initially recommended approval of the request, it was removed from the agenda for a full commission meeting after a review of the conditions attached to the approval took longer than expected, according to KHRC officials.

Levin said that the lack of premium content on the exchange remains the largest impediment to growth. Some racetrack companies, such as The Stronach Group, have said they do not support the concept because of multiple concerns, while in some jurisdictions, horsemen have raised concern about the amount of revenue flowing to the industry compared to the traditional parimutuel model.

Betfair charges a commission of 12 percent on each winning wager. Marty Maline, the executive director of the Kentucky Horsemen’s Benevolent and Protective Association, said recently that he “believed” the Kentucky Downs contract would have awarded the track and horsemen 2 percent of every winning bet to split.

Levin said that Betfair officials remain in conversations with racing constituencies across the United States in an attempt to address their concerns. He contended that the recent data generated by the New Jersey exchange was having a positive influence, and noted that officials of The Jockeys’ Guild said their concerns about jockeys being targeted for criticism have abated based on their experience with the New Jersey exchange.

“It’s hard for me to say [the concerns] are softening or not,” Levin said. “But having everyone on board is what we want to do before we go forward anywhere.”