Exchange betting advances in New Jersey

The New Jersey Assembly late on Monday night unanimously passed a bill that would authorize exchange wagering by state residents and sent the bill to a Senate committee for consideration.

The legislation, which is supported by New Jersey's racetracks, its horsemen, and exchange-wagering companies, would grant a single license to the state-owned New Jersey Sports and Exposition Authority to conduct exchange wagering, a type of betting pioneered in the United Kingdom by Betfair 10 years ago. Under the system, customers of the exchange can post win odds on horses and accept wagers from other customers, and vice versa.

Betfair, the largest exchange-wagering company in the world, purchased the U.S. account-wagering and horserace broadcasting company Television Games Network early in 2009. The acquisition has allowed Betfair to lobby federal and state legislators for authorization to conduct exchange wagering.

New Jersey Sports and Exposition Authority officials have said that if the legislation passes, the authority will issue a request for proposals to private companies to operate the exchange. Betfair has been eager to enter the U.S. market, though the legality of exchange wagering under existing U.S. federal law is murky.

Supporters of the legislation have said that exchange wagering could benefit racing and horseplayers by expanding the menu of available betting options and attracting new players to the sport. Many racing officials, however, have expressed concerns about the amount of money that exchange-type wagers return to the sport, when compared to the higher margins of parimutuel wagers.