Company Head: With Regulation, Bet Exchanges Can Work
Updated: Thursday, March 13, 2003 4:02 PM
Posted: Thursday, March 13, 2003 4:02 PM
A principal in a company that develops software for betting-exchange wagering said North America has the structure in place to make it benefit the horse racing industry.
Lorne Abony, chief executive officer of Columbia Exchange Systems of London, England, said bet exchanges are well-established and will venture off shore if the regulatory environment warrants. Abony, who spoke March 13 during the joint meeting of the Thoroughbred Racing Associations, Harness Tracks of America, and Racetracks of Canada in Hollywood Beach, Fla., said they could succeed with industry and regulatory acceptance.
While North American pari-mutuel racing may be losing some revenue to betting exchanges, it is in a better position to address the issues associated with person-to-person wagering because of its regulatory structure, Abony said. With a bet exchange, players set their odds or choose available odds. A company provides the wagering mechanism and takes a percentage of each transaction.
"We think with the right partners here, exchange betting is an enormous opportunity," Abony said.
The international leader in the betting-exchange market is Great Britain-based Betfair, whose business has grown 100% in the last year, Abony said. The company handles 12,000 transactions per minute, he said.
Abony used the March 9 Louisiana Derby at Fair Grounds as an example. He said Betfair handled about $50,000 in person-to-person wagers on the race, while attheraces, a British account-wagering company that imports races from the United States, handled about $2,000 in pari-mutuel wagers on the event.
"The fact the United Kingdom or the United States got nothing from it is not the model for the future," Abony said. "For bookmakers, betting exchanges are as bad as weapons of mass destruction. They challenge businesses. The irony is the large (businesses) are hedging their bets and developing products on the side."
Betfair has worked out a deal to compensate the British racing industry, and during the recent Asian Racing Conference, one of its top officials indicated a willingness to comply with regulators. In the U.S., the subject has generated some discussion among racing officials, though the industry hasn't taken an official position.
On another international issue, Scott Finley, North American development manager for attheraces, said the company will launch simulcasts from Great Britain in the U.S. in April. Youbet.com and Winticket.com have already expressed interest in offering the races, money from which would be commingled with British pools.
"The idea is to distribute globally a comprehensive package of international racing," Finley said. "If anything, (the TV Games Network) had the right idea. It was just about five years ahead of its time."
TVG, the interactive horse racing network, broadcasts major races from overseas but does not offer international racing on a daily basis. It also has worked to find international markets for U.S. races.
Bill Hogwood, an executive at Greenwood Racing-owned Philadelphia Park, said The Racing Network International joined forces with attheraces to broadcast U.S. racing in Britain in the evening, when there is no product for eight months. Hogwood said the company, which has an account-wagering arm with a hub in Oregon, believes the key is common pooling.
"What's important is to promote horse racing as a tote product and not a bookmaking product," Hogwood said. "It has not been easy. There has been a lot of time and a lot of resources going into developing the American racing market (in Great Britain)."
FREE! E-Newsletters from The Blood-Horse!...
Follow the top stories of major racing events, racing previews and results with FREE e-newsletters from bloodhorse.com. As news develops, we'll deliver updates to your inbox. Follow important events moment by moment, step by step!