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Attempt to secure US footing fails
Leading UK gambling brand Betfair has announced it is withdrawing its race betting exchange from the New Jersey market. Betfair, which forms part of Flutter Entertainment along with brands like PokerStars, Paddy Power, and FanDuel, will no longer be offering the service starting October 1.
Kip Levin, chief operating officer of FanDuel Group – the owner of the Betfair Exchange in the US – said the exchange did not manage to reach the “critical mass” necessary to make the operation profitable and efficient. While the Betfair betting exchange is very popular in the UK and other regions, it did not appeal to US customers, according to Levin.
customer base used to exotic wagers and a reluctance by major US racing associations”
Levin cited a number of reasons for the decision to withdraw from the NJ market, including “a customer base used to exotic wagers and a reluctance by major US racing associations to embrace the different business model.” Specifically, Betfair failed to enter agreements with key players such as Churchill Downs, Del Mar, Keeneland, the Stronach Group, and NYRA to offer exchange betting for races at their racetracks.
A betting exchange allows a bettor to offer markets for a given sports event. For example, one can set the odds for a horse in a given race; the wager will be matched if another bettor accepts these odds. The bettor can therefore act as the sportsbook and bet that the horse is not going to win. A betting exchange operator makes its money by charging bettors a commission.
Four-year lifetime
Betfair was licensed to operate in New Jersey in 2015 after getting approval from the New Jersey Division of Gaming Enforcement. It collaborated with Monmouth Park racecourse operator Darby Development to launch the US’s first-ever race betting exchange in May 2016.
The brand also went on to offer its customers additional wagering options at other racetracks in the state. As well as the betting exchange, it has also been offering traditional fixed-odds race wagering through 4NJBets since 2016.
takeout structure may have compromised its business viability
According to Thoroughbred Daily News(TDN), the US betting exchange’s takeout structure may have compromised its business viability. While Betfair was able to charge a low 5% commission in the UK as “it was not required to turn over any of its profits to purses”, its New Jersey customers were paying 12%. TDN cited the unavailability of legal exchange wagering in other states as another factor that prevented Betfair’s US expansion.
Global restructuring
The announced market exit comes as part of a series of global restructuring efforts following the merger between Flutter Entertainment and The Stars Group, which was completed in May. With many gambling brands coming together under the same parent company, a process is in place to streamline operations across its business operations worldwide.
Flutter Entertainment recently said it would be withdrawing its PokerStars brand from Macau, Taiwan, and China. No specific reason was given for the decision. Best time to play slots in a casino.
Cafe casino no deposit bonus codes 2018. Betfair announced its decision to exit the Russian market in May as it did not have a local operating license. It withdrew its horse race betting operations from the Japan market the following month. The brand stepped away from the market in India in 2019, citing significant competition.
Exchange coming to NJ
While the soon-to-close Betfair betting exchange in New Jersey was only covering racing markets, a startup plans to operate a full sports betting exchange in the state under the Sporttrade brand.
The platform will launch imminently through Sporttrade’s partnership with Twin River Worldwide Holdings, the soon-to-be owner of Bally’s Atlantic City Hotel and Casino. The Philadelphia-based startup claims it will be the first regulated sports betting exchange to launch in the United States. The operation is currently awaiting regulatory approval.
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