11/09/2010 1:57PM

New Jersey Senate committee advances racing bills

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The ball has started rolling in New Jersey on a legislative package designed to help the racing industry.

The New Jersey Senate Government, Wagering, Tourism and Historic Preservation Committee passed four racing-related bills Monday, sending them to the full Senate. The bills, which are supported by the state’s racing industry, would streamline the approval process for new offtrack betting facilities, legalize exchange wagering and a concept called “single-pool wagering,” and reduce the minimum number of racing dates at the Meadowlands to 100.

Legislators began working on the package of bills this fall after a panel appointed by Gov. Chris Christie released recommendations about how to help the state’s racing industry and its casinos, which have both struggled in recent years.

If the bills are passed in both houses of the legislature, New Jersey would become the second state to legalize exchange wagering, a type of betting pioneered by the British company Betfair, the owner of Television Games Network. Earlier this year, California’s legislature passed a bill allowing for exchange wagering as of 2012.

The legality of exchange wagering under existing federal law is murky. Under exchange wagering, customers of an Internet gambling site offer odds on horses and accept bets from other customers. Critics contend that the practice is no different from bookmaking, which is illegal under federal law. So far, the Justice Department has declined to comment on the practice.

The bill legalizing “single-pool wagering” is being supported by a New York venture capital firm that employs a former longtime official with the New Jersey Sports and Exposition Authority, Dennis Dowd. The NJSEA owns and operates Monmouth Park and the Meadowlands.

In previous interviews, Dowd said the company has developed software that allows all parimutuel bets to be merged into one commingled pool. He said that the system would have advantages for bettors by more accurately reflecting the odds of horses based on an analysis of how the horse is supported across the straight and exotic pools, but he also said that payouts would be calculated under the single-pool system in the same manner as under the existing system.

Dowd also said that the system might allow racing to introduce new bet types, such as betting a horse to finish second, and second only, rather than the existing place bet, in which the bet pays off if the horse finishes second or first.

The software was initially developed as a tool for trading securities. Over the past several months, Dowd has demonstrated the system to several racing organizations, including the Jockey Club.

The bill streamlining the approval process for OTBs also would allow outside parties to open offtrack betting parlors. The current law limits OTBs to existing racetrack licensees in the state. New Jersey racing officials have said the current restrictions have made it difficult to open offtrack betting parlors. The state currently has only two free-standing OTBs, including a site at Woodbridge that is one of the highest-handling locations in the country.