A representative of the most publicized betting exchange in the world indicated the company is actively seeking a partnership with the United States pari-mutuel industry.
Betfair, based in Great Britain, has been taken to task by major racing organizations, including the International Federation of Horseracing Authorities, for allowing customers to bet on horses to lose rather than win, and for not returning a fair share of revenue to racing. Money wagered through Betfair doesn't make its way into pari-mutuel pools.
Christian Hellmers, who represents the company in the U.S., said July 23 during the National Horsemen's Benevolent and Protective Association summer convention in Toronto, Ontario, that horse racing could expand its market by embracing Betfair. He said the service could prove attractive to market traders and stockbrokers who might not otherwise bet on racing.
"We want to align ourselves with everyone in the U.S. racing industry," Hellmers said.
Hellmers claimed Betfair, believed to have about 90% of the betting-exchange market, doesn't take bets from U.S. customers. He said the company's objective is to work with the racing industry to develop a model for compensation, and to provide "transparency" into the action of big bettors.
Officials in the U.S. and Canada indicated Betfair recruited customers for Breeders' Cup World Thoroughbred Championships day last year and took wagers on the races.
Betfair has solicited support from the National Thoroughbred Racing Association and Breeders' Cup, as well as horsemen's associations and racetracks.
"We listened and have yet to respond," NTRA senior vice president Keith Chamblin said. "We told them that because they are illegal in the U.S., they would need to start by working through a single jurisdiction to see if they could get up and running."
Chamblin said the NTRA would rely upon member racetracks and horsemen's groups to decide how they want to proceed in the area of exchange betting.
Betfair has about 425,000 registered users--95,000 are active each week--and can process 12,000 transactions in one minute, Hellmers said. He said betting exchanges are popular because players have "flexibility and control over their wagers."
Betfair's annual growth rate is 22%, Hellmers said. Players only pay commissions on their net winnings.
Betfair, Hellmers said, has returned about $10 million to the British racing industry. There is no indication of how much revenue Betfair would return to U.S. racing should the service win an endorsement.
Though U.S. racing interests see Betfair as an "offshore" pirate, Hellmers argued the company could actually help racing by shifting money from offshore services that take bets on racing outside of the pari-mutuel system. He also said the fixed odds offered through the service eliminate the late odds drops that can occur with pari-mutuel pools.