The New Jersey Racing Commission has officially approved UK-based company Betfair NJ to operate its peer-to-peer online betting exchange statewide. Betfair was approved to operate through Darby Development, the managers of Monmouth Park Racetrack. Monmouth Park already uses a Betfair platform for placement of live race wagers.
Betfair was established in 1999 in by professional gambler Andrew Black and is now the first legal betting exchange to be approved in the United States. The company’s goal at inception was to compete with sportsbooks and bookies by offering players a way to be more in control of their wagers.
Betfair became successful quickly and is currently the world’s largest online betting exchange.
What is a betting exchange?
Betfair is the original online betting exchange in Europe. Betfair’s bet exchange platform acts as an intermediary for online peer-to-peer sports wagering. Players have much more freedom on a betting exchange than a traditional sportsbook.
There are significant differences between a traditional sportsbook and a betting exchange. Betfair’s betting exchange allows players to come up with odds, set their own lines, and bet on other players’ lines. Players can also continue to place bets up until an event is officially over.
In exchange for flexibility with bets, Betfair takes a much larger commission from a players’ winnings than the traditional sportsbook.
In an interview with NorthJersey.com, Dennis Drazin of Darby Development spoke about why a betting exchange is an attractive proposition for consumers:
“Some people don’t agree with the odds posted before a race, and they can make an [electronic] offer of a bet at different odds. Then when the race begins, people may decide they think a horse looks a little tired, so they want to bet against that horse.”
Drazin also decided to directly address an outspoken part of the horse racing industry which has worried about the effect that increases in online betting will have on the health of racetracks:
“We’re not looking to cannibalize the existing market — we want to expand it.”
Betfair’s future in New Jersey
Betfair plans on accepting bets by March 2016, and initially players will be unable to bet on sporting events outside of horse racing.
The Professional and Amateur Sports Protection Act of 1992, or PASPA, is a federal law which has been the main obstacle preventing Betfair and other online sportsbooks from launching in New Jersey. New Jersey has been trying to overturn the 1992 law since 2011. The New Jersey Sports and Exposition Authority allows tracks to accept wagers online due to exemptions in legislation for horse racing.
Currently legislators and politicians like Governor Chris Christie are attempting to overturn PASPA in the hopes of expanding the online bet exchange to more than horses.
Much of the opposition to the overturning of PASPA comes from sports leagues and the United States Collegiate Athletic Association who are fighting against this law claiming that widespread betting could be detrimental to the integrity and livelihood of professional and collegiate athletes.
The head of the Division of Gaming Enforcement for New Jersey, David Rebuck, is pushing for a total legalization for online sports betting in his state.
In an interview with GamblingInsider.com Rebuck spoke positively about the future of online wagering in New Jersey:
“To me, if you’re allowed to have sports wagering in the state of New Jersey, then the next action by the state of New Jersey will be to authorize our citizens to have sports wagering offered through the internet – legally and regulated.”
If New Jersey wins its legal battle, Betfair will certainly be in a great place to capitalize on New Jersey sports betting.