Hal Handel Joins TVG (more info)

Here's the Thoroughbred Times take on TVG's hiring of Hal Handel: http://www.thoroughbredtimes.com/national-news/2011/11/25/handel-joins-tvg.aspx. Not really any new information that wasn't in the article I posted yesterday, but since we're aiming to include all information relevant to those interested in the future of exchange wagering in the U.S., I'm including the link.

Hal Handel hired by TVG in preparation for U.S. exchange wagering

There's a new article (http://www.drf.com/news/tvg-hires-hal-handel-help-establish-exchange-betting) up on DRF.com discussing TVG's hire of industry veteran Hal Handel in preparation for the hoped for launch of exchange wagering in the United States in 2012. While the necessary agreement for exchange wagering to start are not all in place yet, the aggressive hiring at TVG and it's parent Betfair seem to indicate that the firm believes that something will be done not too far in the future in New Jersey and California.

More Info on California Exchange Wagering

Plenty of useful info in a recent Sacramento Bee article on exchange wagering, including:
-California is targeting a May 2012 start date for exchange wagering implementation.
-Betfair/TVG has recently hired 70 software engineers to developer their platform for exchange wagering in the U.S.
-Exchange wagering legality in California will expire in 2016 unless further action is taken.

Tom Amoss Favors Exchange Wagering

There haven't been a lot of new developments with regard to exchange wagering in the U.S. during the past few weeks, but I thought this piece of a recent Bloodhorse article was interesting:

Amoss said he would like to see more U.S. racing jurisdictions adopt policies that permit exchange wagering that is so popular in Europe. He cited the growth of Betfair and its progressive wagering systems as an example of an approach the industry could take to be more attractive to bettors.

Click here for the full article. Trainer Tom Amoss is among those who see exchange wagering as a potential 'fix' for the struggles of the thoroughbred racing industry.

Need For Regulation Of Exchange Wagering

Claire Novack wrote a really good article discussing the need for regulation of exchange wagering in the U.S. Essentially, because you can bet on a horse losing a race with exchange wagering, it creates another opportunity for those involved in racing to cheat. The article also gets into some discussion about the very valid concerns about those currently invested in parimutuel betting that some of exchange wagering's growth in the U.S. will come at the expense of their business: http://www.bloodhorse.com/horse-racing/articles/62115/rci-exchange-wagering-takes-center-stage.

Exchange Wagering Giant Betfair Not Part of Final Monmouth Park Bidding

I was a bit surprised to see that Betfair wasn't part of the final bidding to operate Monmouth Park under a lease for the upcoming season. They're certainly a lot better informed than I am, so I suppose that this must indicate that they don't believe that being the winning bidder would substantially increase their chances of operating exchange wagering in New Jersey. Here's an article with more information on the final three bidders.

Future of Meadowlands Racetrack Somewhat Related to NJ Exchange Wagering

This article isn't directly related to exchange wagering, but it does have several indirect impacts. Firstly, part of the value of the Meadowlands to Gural appears to be derived from the future introduction of exchange wagering in New Jersey. However, the impact isn't a one way street, as part of the value of exchange wagering in NJ to whoever ends up operating it will be derived from a longer racing calendar, which is likely dependent on the continued operation of the Meadowlands as a racetrack (whether thoroughbred or harness). Let's hope Gural and the unions can work things out!

Inefficient Markets and the Profit Opportunity US Exchange Wagering Will Provide

The first year or two after exchange wagering becomes available in the United States should provide some incredible profit opportunities. However, the bulk of those won't last forever, and they'll begin to dry up right around the time that most people are becoming aware of them.

The reason for that has to do with the natural progression that any new market tends to go through. Initially, there are relatively few participants and most of them don't have the knowledge or experience to wager or invest wisely. New (or immature) markets are inefficient. If you know what you're doing, you can make a killing against the weak competition. Over time, a number of things tend to happen that gradually make the markets more efficient and the competition tougher. Those who started without experience, gain experience and become more skillful 'opponents'. Those who were skillful from the start gradually accumulate more of the money and their player comes to make up a larger proportional of the overall market. And as the overall market grows, the amount of money at stake grows more and more of the smartest potential competitors. By the time the whole world knows about the market, competition is so tough that you need to be one of the best to be profitable.

This pattern takes place in one market after another, including a lot that people don't think of as 'markets'. In 'Market Wizards' by Jack Schwager, a number of the interviewed options traders describe this phenomenon. They all seem to agree that anybody with a calculator and the knowledge of basic options pricing formulas was able to make money when options first began trading. That easy opportunity was gone by the late 1980s. One of my other interests is fantasy sports, and the same situation exists there...each new contest format starts out easy to win for the first year or two, and then the competition becomes tougher and tougher.

The main difference from one market to another is how quickly they become more efficient. The more money at stake and the less barriers to efficiency there are, the faster it happens. In a future post, I'll talk a bit about what those 'barriers to efficiency' are.

Eight Groups Bid to Operate Thoroughbred Racing at Monmouth Park

Catching up on some other relevant news...several weeks ago eight groups submitted initial applications to bid on operating thoroughbred racing at Monmouth Park. As previously mentioned, Betfair was one of the bidders: http://www.northjersey.com/news/031011_Eight_potential_bidders_for_Monmouth_Park_submit_deposits.html.

Wall Street Firms, International Securities Exchange and Cantor Fitzgerald Want In on NJ Exchange Wagering

This article a from last December, but still interesting enough to be worthwhile reading for anyone interested in the future of exchange wagering here in the U.S.: http://webreprints.djreprints.com/2582111488832.html. Wall Street firms, particularly International Securities Exchange and Cantor Fitzgerald are interested in using their technology to operate exchange wagering for the horse racing industry in New Jersey (and ultimately the rest of the U.S., I'm sure).

Thoroughbred Times: Betfair Positioning Itself For New Jersey Exchange Wagering

Here's an article from a couple of weeks ago about how Betfair is beginning to position itself in an attempt to operate exchange wagering in New Jersey (and to a lesser extent California): http://www.thoroughbredtimes.com/national-news/2011/03/09/betfair-us-exchange-wagering.aspx.

In addition to the items that the article discusses, it's pretty obvious that the reason that Betfair was one of the applicants who expressed an interest in operating Monmouth Park was part of this strategy as well. That would serve a two-fold purpose:
1. A strong Monmouth Park is critical to the success of exchange wagering in New Jersey.
2. A local presence in New Jersey would give Betfair a leg up in the jockeying for position to become an exchange wagering operator for NJ. It's highly likely that politicians will favor "local businesses" when awarding rights to operate this lucrative business.

Bloodhorse Update on Exchange Wagering in U.S.

I'm going to try to start giving frequent updates on the state of exchange wagering in the U.S. Here's a recent article from Bloodhorse to get that started: http://www.bloodhorse.com/horse-racing/articles/62115/rci-exchange-wagering-takes-center-stage.

What Is Exchange Wagering?

What is exchange wagering? The basic idea is that bettors are able to bet directly against each other on the outcome of a sporting event or horse race, with the mechanics of the bet similar in many ways to trading on a stock exchange. This has several advantages for those who bet on horse racing, including:

1. The ability to place bets at fixed odds, unlike current forms of betting on horse races in the United States.

2. The ability to bet that a given horse will NOT win a race, without having to determine which of its opponents stands the best chance to win.

With the increasing likelihood that exchange wagering will soon be legal in California and New Jersey, I'll be using this blog to keep people up to date on the latest developments regarding exchange wagering in the U.S., as well as exploring various strategies and issues faced when places bets on betting exchanges.

Exchange Wagering

Going to be posting lots of stuff about exchange wagering here in the near future.