Betfair is taking advantage of a law passed in September in California to open an office and start taking exchange bets on horse racing. California was the first in the nation to legalize exchange wagering and the law will take effect in May of 2012. New Jersey also has recently passed a law to allow this kind of betting on horseracing as well.
Exchange wagering in horse racing allows a person to bet on a horse to win or lose even after the race has started. The odds of a horse will change real time as the race is run. A lot of experts compare this kind of betting to the stock exchange were the value of stock will change in real time throughout the day.
California and New Jersey is looking for ways to pump new life into their anemic state horse racing business. Betfair hopes it can do its part and has opened an office in San Francisco. According to the company’s global director of racing, Stephen Burn;
There’s potentially massive upside there for us. We don’t share the doom and gloom that other people have been coming up with about U.S. horseracing.
Governor Arnold Schwarzenegger is hoping to that this will save the state’s horse racing tracks that over the last ten years has seen attendance drop from 10 million in 2000 to 6.7 million in 2009 as well as another 9% drop in the amount wagered.
David Yu, CEO of Betfair says that his company will work with the regulators over the coming year to make sure the new laws are clear to consumers and to have a system in ensure revenue is flowing into the state and the floundering horseracing industry.
Burns is looking at the bigger picture saying,
The more liquidity you get, the more attractive the markets become, and you have this snowball effect. We can build the exchange for all of America and operate it from California.