Governor Chris Christie of the American state of New Jersey has signed the bill allowing betting exchanges to operate in the state for horse racing. New Jersey will become the first state in the United States to have legalized betting exchanges. Betting exchanges are popular in Europe, where they were pioneered by the online betting site Betfair.com.
In betting exchanges the bettors do not have to place bets with the betting site. Some bettors offer bets directly and wait for other bettors to accept them. The betting exchange earns revenue by charging a commission which is calculated as a percentage of net winnings. Gamblers prefer betting exchanges because they can place bets of unrestricted denominations. Equally important is the fact that the odds available on a betting exchange are usually better than those offered directly by the betting site despite the commission charged. This is because the individual bettor offering the odds will be satisfied with a lower margin than the betting site, which has to cover its overheads.
Christie explained his rationale for signing the bill into law in a statement, which read, “We are providing new tools to help the industry implement new strategies, generate additional revenue and capitalize on interest in horse racing around the state. Along with our ongoing efforts to transform racing at the Meadowlands and Monmouth Park through private management, these measures will place horse racing on a path to economic stability and sustainability without public subsidy that New Jersey taxpayers can simply no longer afford.”
Governor Christie also signed into law a new method of pooling parimutuel wagers. Parimutuel betting is a betting system in which all the bets on a market are pooled. Taxes and house commission are removed from the pool and the balance amount is distributed to the winners according to a decided calculation. Parimutuel betting is also referred to as totalizator or tote in some countries.
There are yet two bills pending before Governor Christie that have been passed by both houses of the New Jersey legislature. One, if passed, will legalize online sports betting and the other will allow online betting sites to offer poker and casino services. Time is running out and the Governor will have to either approve or reject the bills.