New Jersey to begin public-comment period on exchange wagering

The New Jersey Racing Commission on Wednesday approved the publication of rules that would govern the practice of exchange wagering in the state, opening the regulations up to a 60-day public-comment period, according to commission officials.

Frank Zanzuccki, the executive director of the state racing commission, said the rules will be made available for public comment beginning June 16. After the 60-day public-comment period, the commission will be able to pass the rules as initially written or consider amendments to the rules, under standard operating procedures in the state.

“My best guess is the rules could be formally in place by the end of September, early October,” Zanzuccki said.

The approval Wednesday sets New Jersey on a path to become the first state to offer exchange wagering in the United States. New Jersey and California have legalized the practice, but only horsemen in New Jersey have indicated that they would support the establishment of the practice, which remains controversial in many U.S. racing circles.

Pioneered by the British company Betfair – which owns Television Games Network and operates New Jersey’s only licensed account-wagering operation – exchange wagering allows customers of an Internet service to post prices on horses and take bets from other customers of the same service. Because the service allows customers to bet on horses to lose, critics have contended that the image of the sport will be damaged by perceptions that jockeys or trainers are holding horses to cash bets, whether the accusations are legitimate or not.

Betfair aggressively lobbied for a bill legalizing exchange wagering in New Jersey in 2011. The company contends that the new type of betting could bring new fans and revenue to horse racing, which is struggling to maintain its market share in a highly competitive gaming environment and among widespread public-perception problems.

Some racing officials have also expressed concerns about whether the practice violates a federal prohibition on bookmaking. The Justice Department has not yet issued an opinion on exchange wagering.

Earlier this year, Dennis Drazin, the president of Monmouth Park’s operating company, said Monmouth had a tentative deal with Betfair to offer exchange wagering once rules were in place in the state. Monmouth has been run by the state's horsemen’s group since 2012.

Monmouth opened its 2014 live meet last weekend. It is scheduled to hold live races through Sept. 28.