Is Legal Exchange Betting Coming To New Jersey?

betfair exchange betting NJ

Betfair and online gamblers received some very positive news from the New Jersey Racing Commission last week. Last Wednesday, the commission finally gave approval to online gaming firm Betfair to offer exchange betting on horse races to customers in New Jersey. The approval marks the end of a long and drawn-out process for Betfair that dates back to 2011.

What this means for New Jersey horse racing bettors is that there will soon be a new way to bet on horses: through peer-to-peer exchange betting. In exchange betting, gamblers do not bet against the house as in traditional fixed-odds betting. Instead, customers bet against one another through a system that matches customers who are willing to take opposite sides of any bet.

The way it works is you select your position (such as “backing” a horse to win or “laying” a horse to lose) and the odds at which you want to take the bet. Then, the system matches you with someone who is willing to take the opposition position. There are no limits to how much you can bet or the odds you can get on any position as long as someone else is willing to take the opposite side.

Exchange betting also differs from fixed-odds betting in the fact that you can trade into and out of positions at will. Your wagers with other people are treated as contracts in a similar manner to the stock market. You can close out positions early as new information comes in to either lock in a profit or minimize losses. In essence, betting exchanges are the free market of sports wagering.

Most importantly, betting exchanges do not pit you against the bookmaker. The exchange has no stake in the outcome of any individual wager. They take a commission from the net profits, and this commission is usually significantly lower than the vig charged by traditional oddsmakers. Because you do not compete against the bookmaker, you are never limited for winning too much (big winners are frequently banned or have their betting limits reduced by traditional sportsbooks).

Betfair had been lobbying since at least 2011 to get its business model approved by New Jersey racing authorities. Back in 2011, New Jersey passed the Exchange Wagering Act, but it took a number of years for authorities to iron out all the details. With those details now finalized, Betfair has finally be granted permission to set up a horse racing betting exchange in association with Monmouth Park in New Jersey. State residents may be able to place the first legal exchange wagers as soon as March 2016.

If everything goes as expected, this will make Betfair the first-ever legal betting exchange in the US. It has been a long road for Betfair here in the States, but the company has extensive experience operating in the UK and abroad. Betfair is by far the single largest exchange betting platform in the world with markets on sports, horse racing, and more. They will be limited to horse racing betting in the USA for now, but that could change if New Jersey ever gets its way in legalizing sports betting.

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