29 January 2009

Betfair Buys TVG; Canadian Implications

First things first, I didn't do any reporting on the Eclipse Awards, there are plenty of thoughts by my American counterparts within The Thoroughbred Bloggers Alliance who are more into that stuff than me. Those who read this blog know I'm more into pointing out the cynical side of horse racing, while give suggestions, and predicting which way the industry is going.

I wanted to get more detail regarding the Betfair purchase of TVG which I reported as a strong imminent rumour in my January 23rd post. To date, I can only go with what a rep told me he thinks will happen, which coincides with what I think as well. Canadians will soon be able to make wagers on American tracks through TVG at the Betfair site.

Again, betting offshore from Canada is not illegal. If it was, there would be arrests made. Simple, either something is legal or it isn't. From my understanding, unless Betfair had a server in Canada while having no license to operate here, then Betfair would be doing something illegal.

In the USA, arrests have been made against principles who own offshore houses. Laws were passed making it difficult for Americans to transfer funds to and from offshore betting shops. Betfair isn't stupid. They deem the laws in the US powerful enough that they don't take American bettors.

I've written about the legalities of betting in Canada before. Read it.

Ok, so now about the acquisition. TVG with all their content will soon be available to Betfair players. This will be a huge boon for tracks on the TVG menu. What will happen happened in Australia when Betfair went into expansion mode. Betfair customers will mostly play low commission exchange bets, but will take advantage of betting directly at the track if they see better odds there. Also, players may be torn between a couple of horses, and then bet a few exactors or triactors, directly into the America pools.

I also expect TVG to start rebating more and more, because Betfair understand how to get customers to play. Finally, I expect this change to finally change the betting landscape in North America. Exchange betting with low costs to players will become accepted in most US states.

Sure, the best thing is for the dysfunctional North American racing industry to start their own exchange. But track jurisdictions can't even agree with each other on what drugs should be legal. Because they are so dysfunctional and so behind the times in their mentality, horsemen and tracks will get somewhat punished, as Betfair will get some of the profits that horsemen and tracks could have got if they had an ounce of foresight.

The game will finally grow, and more and more households will have betting accounts and be up to speed on North American racing. Which is fantastic.

Who will suffer the most? Woodbine will. And they deserve it. With slots, they've kept takeouts to the moon, giving customers no hope to make money in the long run. From what I understand 1 in one thousand HPI accounts show a profit in any 365 day span. How can you beat a triactor takeout of 28.3%? And betting has gone down, despite populations and availability going up. Woodbine has tried to bully a monopoly status by signing collusive deals with US ADWs trying to prevent Canadians from betting through them.

The tide has turned, and Woodbine is caught with its pants down, if Canadian Betfair customers can bet through TVG. And I see no reason at this time why that won't happen.

TVG doesn't have Woodbine in their menu, and is likely to never have it now. But who cares? There are enough tracks on the TVG menu to keep the Canadian gambler very busy, and lasting much much longer, while giving him or her a chance to make money.

Business of Horse Racing has reprinted an article that was written in 2004. The Woodbine brass along with racing execs everywhere must have closed their eyes to it:
Racing's Response To Betting Exchanges.
At the end of the day I think there are six possible responses to the challenges posed by betting exchanges.

1. Racing might do nothing.

2. Racing could form a committee.

3. Racing could rely on the “competition is illegal” response and pin its hopes on the Wire Act.

4. Racing could take Jack Ketterer’s advice and try to find ways of lowering the consumer price of its product.

5. Racing could change its business model by adding new lines of business that are unrelated to horse-racing–VLTs, for example.

6. Or racing could enter the market with a competing betting exchange–or with some as-yet unthought-of method of supplying competitively priced wagering on U.S. races to the emerging global horse-race betting market.

Pull The Pocket has lots of thoughts on the acquisition of TVG. Check it out.

Speaking of a dysfunctional game. Tracknet has indeed cut off signals to Las Vegas.

The ORC wants comments on proposed changes.

Harness racing betting Ontario may be close to bottoming out. Harness racing really needs to use exchange betting to avoid extinction.

South Carolina courts will be making a monumental decision next month regarding the legality of Hold em Poker.
"Is poker a game of chance or one that involves skill and therefore legal under the law?" Simple answer is that it is a game of chance that involves skill to be successful. But more to the point, a skillful player will win more or lose less over any significant period of time than a less skillful player. Luck will even out.

Interesting. Virtual horse racing creates a real millionaire.

The millionaire's stats:PillButt 74588 races 12078 wins 35545 seconds and thirds $1013306.05 (real money earned)

74588 races over four years? That is over 53 races a day. But at a quarter million a year in income, I guess it as good a job as any. Mind you, I don't know how much it has cost PillButt to play either.

And don't forget to go to the HANA blog as the countdown to the number one bettor friendly race track continues. Today's feature is Del Mar, which comes in at number 14.


Anonymous said...

I think Betfair made some changes to Cdn withdrawal options. It seems like they lowered withdrawal fees from $45 to $5, plus you can credit back onto a visa card now. I don't think this was allowed before. Anyone else notice this? Maybe they are driving up to market in Canada...

Anonymous said...

They had better look in to instadebit.

Anonymous said...

Hi Great blog very interesting