Known as exchange wagering, the stock market-style betting system has become a favored form of handicapping for the pros at Meadowlands Racetrack, reported NorthJersey.com last week.
“Exchange wagering helps when a bettor is sure that a particular horse — even if it is one of these favorites — won’t win but has no idea who will win,” wrote NorthJersey.com’s John Brennan. “It allows bettors to place a bet that pays off as long as the horse doesn’t win. It even allows a bettor to cash out mid race.”
How exchange betting works
Basically, exchange betting means placing money on events the bettor thinks will not happen. It’s a fixed-odds variant of pari-mutuel betting.
Say you’ve got your eye on the 6 horse, but he gets off to a bad start and you know he doesn’t have the speed to gain ground and finish first.
In that case, you head to Betfair U.S.’s exchange market and place a bet on the 6 horse losing the race. Then, maybe you see some early signs that another horse won’t win either. You place a bet on that horse losing too.
When the race ends, your exchange bets are spot-on; neither horse won, so you get a payout, minus a commission from Betfair.
While the initial bet on the 6 horse was a bust, the two exchange bets made up for it.
The history of exchange betting in New Jersey
Exchange betting is very popular in England but didn’t come to American shores until 2016 when it debuted at Monmouth Park.
The state’s legislature approved exchange betting back in 2011, but New Jersey’s racing commission didn’t actually approve the first license until late 2015.
That sort of hesitation between legalization and implementation ins’t unique to New Jersey. California legalized exchange betting in 2010 but has yet to grant a first license.
From a business perspective, exchange wagering is seen as a way to increase revenue from millennials, who many suspect would value the mid-race, live action over pre-race betting.
Whether that’s how things work out for Monmouth Park and Meadowlands remains to be seen. But we do know this: Bets have doubled during the past year, NorthJersey.com reported.
Exchange bets placed on Haskell Day doubled over the previous year, bringing in about $250,000. The site said statewide bets have gone from $1 million in May, June, and July of 2016 to $2 million over the same period this year.