A few items:
It looks like it will start with in-running betting only. Curious move, but that's the plan.
There's no word from Finley on what tracks will be offered, or if it will be commingled with current tracks trading on betfair. The latter is obviously preferred.
The takeout is reported to be 12%.
The last point kinda sticks in the craw. I remember writing a white paper for exchange wagering in Canada back in '08 and one line was "as long as you do not try to price it at 10%, it has a good chance to help horse racing long-term." 10% leaves money on the table; 12% leaves even more.
I guess they didn't like my white paper.
The 12% want is, of course, linked to the current 15%+ takeout in win pools. If the takeout is too low on the excahnge, then people might leave the win pools, so the story goes.
Racing's obsession with not wanting to cannibalize the wagering pools borders on the absurd. No one thinks like this.
Corp Dev: "We want to sell sliced, processed cheese"
Old dude: "What will that do to the sales of our one quarter pound block cheese?"
Corp Dev: "It could go down 5% or 10%, but we hope to make up the sales by selling more cheese overall. People love grilled cheese sandwiches and we are not offering them anything they want, so this could sell well"
Old dude: "Too risky, we can't jeopardize our block cheese sales."
This is why, today,
Products have features and benefits. The number one benefit of an exchange is it allows a high takeout game a chance to appeal to price-sensitive customers it has lost, or new ones it hopes to attract. So, what does racing do? It destroys its main selling benefit before it leaves the station.
This isn't Betfair's doing. As I wrote last week, when Australia tried to price up exchanges, volume took a bath and Victorian racing had to acquiesce; prices went lower again. This is old hat. This is just North American racing leaning back onto what it always leans on - protecting a made-up price, and the status-quo. It knows no other way.
It will be interesting to see where this goes from here, but right now, I am not confident an exchange will do anything at all to help New Jersey horse racing.