US Betting Exchanges - Best Value Betting Comes To America
Punters in the UK and parts of Europe are used to having a wide choice of sportsbetting options, and the huge value that can be obtained by betting on exchanges is well known.
Because you're betting or trading against other anonymous punters rather than the sportsbooks or bookies, the odds are regularly higher.
You'll find this particularly in horse racing, although other sports do see some improved odds too. If you're a US based bettor in New Jersey, you can already take advantage of an American betting exchange.
And the benefits are not just limited to better odds. Betting on an exchange opens up a wide range of in-running, in-play, and early cashout bets, not to mention the opportunity to lay selections to lose rather than win plus the option to request higher odds than those on offer. In fact, using an exchange can be a major element of any no lose betting strategy.
The biggest and most well known exchange is Betfair, and after a 7 year long battle to break into the US market they finally launched the first US betting exchange in May 2016. Betfair US have been providing the service to American punters at the New Jersey Monmouth Part racetrack from May, in partnership with Paddy Power and Darby Development.
Initial exchange operations are focused on horseracing, though it won't be lost on US punters that exchanges cover the full range of sportsbetting options.
Up to now Betfair have been running a betting operation using 4NJBets - a sportsbetting site who's Customers have got first try at the new exchange in a closed beta trial. Betfair also runs an online casino in New Jersey in conjunction with Atlantic City’s Golden Nugget casino.
Although initial results have reportedly been strong, it may take US punters some time to catch on to the big value that can be obtained. To help, Betfair are setting up an exchange simulator to help punters learn about the offer.
The full list of tracks which have made agreements to offer Exchange betting include Monmouth Park, Woodbine, and the tracks running live in Louisiana and West Virginia. In Canada, Woodbine racegoers can also use the service.
One element that might disturb prospective Customers is the 12% commission which will be charged on the win that comes out of any positive return exchange bet. In the UK, this figure is significantly lower, though we need to recognise that the liquidity in the US market may initially be low. Betfair need to cover their costs.
Liquidity In The Exchange Markets? What's That?
Clearly the understanding of how exchanges work needs to be built up in the heads of US bettors. Unfortunately this presents somewhat of a chicken and egg situation. To be successful an exchange needs to have plenty of cash being wagered - plenty in the pools to build up the chances of higher odds being available.
If there are not enough takers of the odds on offer (the exchanges Customers), then the layers will be prevented from offering higher odds. Everyone's out to make a profit, right? This is what's known as liquidity - essentially the volumes of money that make the betting markets viable.
Betfair obviously have a task on their hands to build up solidly and hopefully quickly - get as many US punters on to the Exchange as they can and show everyone the value.
So Really - What Value Do Betting Exchanges Give?
All of this talk about extra betting value for US sportsbetting fans is great of course, but it's worth knowing exactly how betting exchanges deliver that value. It's a big subject, and one which is already covered in many online articles so let's take a look at a few of the best:
These below specifically give a good - although basic - visual introduction. The first is Betfair's first promotional video for the new US exchange, the second comes from BetAngel and gives an introduction to exchange betting in general.
Is It Legal?
The rules around legal gambling for US citizens are complicated to say the least.
For example, you can play online casino games and poker if you're a resident of certain states where it's been legalized and is regulated - Delaware, New Jersey, and Nevada.
Other states such as California, Massachusetts, Pennsylvania, New York, and Illinois could all join that list by 2020.
Outside of those the waters get muddy. Essentially you can't gamble legally, although there are ways to actually do it. It all comes down to Federal Laws and State Laws.
The reality is there is no federal law that makes gambling online either illegal or legal, and essentially each US state is allowed to set its own relevant laws. If gambling is not specifically labeled as lawful within a state, then that makes it unlawful and hence not legal.
The US states where it is allowed have passed bills which expressly make it lawful. To gamble in the regulated three, you have to be physically located within state lines.
When it comes to horse racing betting though - which will initially be the target of the newly introduced US-based exchange betting operators - there is much better news. In most states, betting on horse races (and greyhound racing too, which in itself is also a target for the exchanges) is legal.
So Why The Differences?
It was the Interstate Horse Racing Act issued in 1978 which allowed race tracks themselves to broadcast races across the US and take bets on them. In 2000 there was an amendment to this which opened up wagering via telephones and the internet.
So while the UIEGA ruling outlawed online poker, it did not affect horse racing. As long as the state actually has stipulated that interstate horse racing betting is allowed.
There are some complications and it gets messy in places. Some states allow betting only at specified racetracks, or have specific rules around where you can bet.
US States Which Allow Exchange Betting
In case you're in any doubt whether the state you're in will allow legal exchange bets on horse races, the best way to find out is to visit one of the leading online sportsbooks and check their terms and conditions.
You'll always find a section that's clearly marked with which states they'll accept bets from, and if you mistakenly try to register an account from somewhere you shouldn't then the account request won't be accepted.
Three that have been licensed by gaming commissions include BetAmerica.com, TVG.com (who as we've seen already have an association with the main exchange operator Betfair), and Twinspires.com.
Some or all of these sportsbooks will take bets not only on US horse racing, but on races across the world including the UK and Australia.
For ease of use, here's a list of states where horse racing betting online is allowed. Of course, if betting in general is allowed then betting on exchanges will be too. The list is current as of 2015, but as I've said before - make sure you double check:
Arizona, Arkansas, California, Colorado, Delaware, Florida, Idaho, Illinois, Iowa, Kentucky, Louisiana, Maryland, Massachusetts, Michigan, Montana, New Hampshire, New Jersey, New Mexico, New York, North Dakota, Ohio, Oregon, Pennsylvania, Rhode Island, South Dakota, Tennessee, Vermont, Virginia, Washington, West Virginia and Wyoming.
About Betfair - Review
So we've seen that the first betting exchange in the US is provided by Betfair - a well known operator who have seen phenomenal growth in the UK (and Europe/Australia) since their inception.
Betfair's exchange operations outside the US handle millions of bets per day, and since I stumbled on to them a few years ago it's transformed the way I bet. There is tremendous value to be had.
European punters can place bets safe in the knowledge that they're working with a fully regulated operator that is trustworthy and runs a slick operation.
The best way to get to see what an exchange is all about is to visit the site, but as a summary you'll get:
• Regular promotions just the same as with any sportsbook
• Highly competitive odds and lines
• A Straightforward, easy to use interface with allowing easy placement of bets
• The ability to back a selection to win or to lose
• The option to bet before an event, during it, or trade out at any point for a profit or to limit a loss
• Live streaming
• Huge ranges of different types of bets
• Mobile app betting
• Outside the US, betting is available in a wide range of currencies
• Easy account funding and withdrawals via Paypal and other banking options
If you're resident in one of these states, you're in luck. When exchange betting takes off in the US after the initial introduction in New Jersey, you'll be in prime position to take advantage of the better odds and wide range of betting options.
If you're in any doubt about the value, consider that since Betfair introduced its exchange to the UK in 2001, interest from punters has grown to the point where a reported 3 million betting transactions a day take place.
Numbers don't mean everything, but 3 million is a lot of bets and clearly shows the level of interest.
There is every chance that the US will see the same levels of growth. Exchange betting is an innovation which took the UK and Australia by storm, and now it's time for US bettors - both existing and new to the game - to get their teeth into those tasty exchange odds.
In future we can expect to see US betting exchange options increasing with a wider number of states getting involved, and maybe even the compeition opening up to allow other exchange operators to offer competing services.
New Jersey is at the forefront of a betting revolution. With 9 million residents there is every chance that the liquidity an exchange needs to run successfully can be achieved - and success in the Garden State will fling open up the doors for further growth.