Currently in California there is a Bill ( AB 2414 ) which hopes to legalize Betting Exchanges.
What are Betting Exchanges? well in a nutshell they are organized and regulated bookmaking operations. In their most simplest configurations these exchanges facilitate a bet between two opposing bettors. The Exchange extracts a fee, usually around 5% of the bet to run the dealings.
I would submit these exchanges could be a savior to the Nevada Economy and Governmental operating budgets. One wonders why this is not already being done in Nevada. Could it have anything to do with having a Senate Majority leader named Harry Reid who long ago sold out Nevada by supporting Indian Gaming? who has consistently worked against the traditional interests of Nevada? a Senator who boasts to saving jobs at a construction project half owned by Arabs (City Center) but has done nothing to save even more jobs farther up the Las Vegas Strip at two stalled US owned projects? (Echelon and Fountainbleu)
The Bill before the California Legislature would involve only Horse racing. This Bill has created chaos within the California Horse Racing Industry. So much so the Oak Tree Racing Association will move their October meet to Del Mar Race track starting in 2011. Apparently the horseman, along with their racing associations like Oak Tree, are the only real opponents of the Legislation while most other insiders support the ideas since AB 2414 promises to raise more money. As the story goes Oak Tree’s lease was pulled by Santa Anita in punishment for not supporting the Legislation.
Santa Anita is owned by MI Developments Inc. MI is keenly interested in restoring Horse Racing to it’s former glory and operates the website..Racing Future to discuss issues relating. MID owns a ton of racing industry assets and I do not doubt their intentions are noble, but without the backing of horseman they face a tough road.
Horseman say the history of betting exchanges in the UK show they lead to increased race fixing. This due to the fact bettors would be encouraged to bet a horse to lose thus encouraging insiders to fix races. Personally I think the Horseman have a point. Most of the general public thinks Horse Racing is probably fixed. This belief stems I think from racing overseas and experiences we have seen at small venues here in the United States where policing is minimal at best. Few would argue at major race tracks things are legitimate with only some issues involving horse medications to deal with.
Horseman and some racing associations also fear some of the parties behind the Bill, namely Betfair. The World’s largest Exchange Betting outfit based in the UK. Some fear their influence will ultimately destroy the way horse racing is financed in California. I agree and this type of activity should be done outside of the direct Horse Racing industry in my opinion.
As a longtime resident of Nevada my question is why doesn’t Nevada already have these type of betting exchanges? One could have made the argument maybe pre-internet, that exchanges would have killed the existing Race and Sports Book industry here in Nevada. I would submit the technology and exchanges operated in the UK and in the Caribbean have already reduced parimutuel horse wagering and offshore bookmaking on Sports to minimal casino operations. Nevada should be the World leader in Bookmaking and Exchange Betting between individuals. The fact we are not makes me question the integrity and loyalty of our local and state Politicians. Heading this list would be Harry Reid a longtime supporter of Indian Gaming.
Nevada is currently in a fiscal crisis wondering how they are going to close an estimated $3 billion dollar State Budget deficit. School funding is a top issue as are others. Could running betting exchanges be a big answer to these budget holes? absolutely in my opinion.
Nevada needs to get back to what we do best…that is being a welcome host for things the rest of the country does not want to touch, but their residents want. Nevada is also the perfect venue for hosting things which others cannot due to Political issues within their own jurisdictions. We are the leaders in Gaming security and know how.
We have blown it here in Nevada for 3 decades. We have lost the offshore game. We have trained an army of Indian Gamers who are now eating our lunch. We lost being the host of other State’s Lotteries, heck we even said no to being the sole host to the thousands of Gay marriages and legalized Pot Smoking.
Are we now going to sit on our butts as State after State decides to operate regulated Bookmaking Exchanges inside their own borders? unless changes are made to the political structure here in Nevada I am afraid the answer is a resounding YES.
here’s more on California AB 2414
AB 2414, a bill authored by Assembly Speaker John A. Pérez, contains three major components:
* Provides an incentive for the Breeders’ Cup Limited to run its world championship races at California racetracks by mandating that a portion of the takeout at the host track be designated for promotion of the Breeders’ Cup. The bill cites a study indicating that the last two Breeders’ Cups held at Santa Anita Racetrack generated an additional $60 million economic impact on the State of California and Los Angeles region each of those years.
* Increases purses in order to encourage horse ownership, boost field sizes, and foster increased wagering on California horse races in order to compete with other states. Due to the high cost of running horses, owners and trainers seek out races offering the highest purses. Some states enhance purses with revenue from slots and other forms of gaming. It is hoped that by enhancing purses in California through AB 2414, the larger purses will encourage horse ownership, and more horsemen will opt to run in California. Larger fields invariably result in increased handle and more revenue, giving increased stability to the horse racing industry. AB 2414 points out “the importance of the horse racing industry to this state, including the 50,000 jobs associated with the industry…” The additional purse money will be generated by increasing the amount withheld from the wagered dollar. Even with this takeout increase of 2 to 3 per cent on exotic wagers, such as exactas, trifectas, and the Pick Six, California’s takeout rates will remain lower than those in some other states with comparable, high-quality racing. Under AB 2414, the takeout rate in California on exotic wagers placed on thoroughbred races will range from 22.18 per cent to 23.78 per cent, depending on the wager. This compares with a takeout rate of 25 per cent or higher on many exotic wagers in New York, New Jersey, and Illinois.
* Provides the legal authority for California to offer a wagering variation called Exchange Betting, subject to approval by California horsemen and racetracks. Exchange Wagering is very popular in Great Britain where promoters claim it has attracted a younger audience for wagering on horse races. It is hoped that Exchange Wagering will attract a new clientele to California horse racing and lead to increased wagering that will benefit all segments of the industry. Exchange Wagering is also being considered by the New Jersey State Legislature. AB 2414 along with rules to be developed by the CHRB will provide ongoing checks and balances. Exchange Wagering can only be implemented following financial negotiations between horsemen and Advance Deposit Wagering (ADW) companies and is subject to approval by all parties, including horsemen and the CHRB.
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