All of the Big 3 Now Hedging With Exchanges
British bookmaker Ladbrokes joined competitors Coral and William Hill this month in changing its hedging practices to employ betting exchanges as well as the course market. William Hill made the switch from the racecourse to betting exchanges in early November 2005, and Coral quickly followed suit by splitting its hedging between the course market and exchanges.
Starting Prices for British Racing Under Review
Lord Donoughue, the Labour peer heading up an independent review of how starting prices are formed, said he was encouraged by a trial run Jan. 12 at Catterick racecourse by bookmakers who traded in the more traditional way--without using betting exchanges. Donohue, who is also chairman of the Starting Price Regulatory Commission (SPRC), said he hopes to complete the independent review by early summer and that the SPRC was in advanced discussions with professional consulting firm PricewaterhouseCoopers to conduct a full audit of the current SP process. "It is very rapid but I believe it is important to deal urgently with this issue," Donoughue said. Bookmaker Jon Ridley, on duty at Catterick, hailed the experiment as a success. "It worked very well," he said. "I think everyone thought it was very worthwhile. It brought the racecourse alive."
International Deal to Create Racing World
North American racecourse owner and operator Magna Entertainment Corp. (MEC); Kentucky race track owner Churchill Downs Incorporated (CDI); and British television channel Racing UK, together announced that the three organizations have entered into a memorandum of understanding for the media rights development a subscription TV channel, called Racing World, to broadcast races from MEC and CDI racetracks, as well as other North American and international racetracks, into the UK and Ireland. The subscription channel could launch as early as the summer of 2006, if the deal is completed.
Funding Trouble for the BHB
British Horseracing Board (BHB) chief executive Greg Nichols admitted Jan.9 that its income from pre-race data acquired by the betting industry has all but disappeared, following the successful December launch of a service to Irish bookmakers by Satellite Information Services (SIS), which already supplies racing data to UK bookmakers. The cost to British racing is estimated to be a minimum of £12 million a year. Future lost income is likely to occur if the BHB decides not to appeal against its defeat last month in the High Court case against At the Races.
Betfair Bits and Pieces
British betting exchange Betfair was finally granted a license to operate in Tasmania Jan 16.and will be open for business Feb. 7 in Hobart's Technopark precinct, located in the suburb of Glenorchy. Opponents of Betfair, however, are not giving up the fight.
Racing NSW (New South Wales) has threatened to sue Betfair for copyright infringement if it publishes NSW race fields and says that New South Wales and other states where Betfair is not licensed, such as Victoria, will not give up until Betfair agrees to pay a product fee for bets placed on their race fields.
A December report by an analyst for investment bank Morgan Stanley disputed Tasmanian Premier Paul Lennon's assertion that Betfair would bring in about $50 million per year by 2010. The report said the projections were dangerously overestimated and the company would more likely bring in around half of the Premier's predicted windfall.
Betfair, however, has complete faith is its ability to live up to the expectations of the government.
"We expect to exceed them," said Betfair's Director of Communications Mark Davies. "We've exceeded expectations everywhere since day one in June 2005, despite doomsayers at every turn."
Betfair isn't the only one feeling the heat, though. Tasmanian Premier Paul Lennon has experienced his share of trouble relating to Betfair. State Opposition is calling for at least an apology, if not his resignation, following suspicions that an upgrade in Publishing and Broadcasting Limited-owned Crown hotel during last spring's Melbourne Cup may have swayed Lennon's decision to license the betting exchange.
Competition for Sports Betting Readers in the UK
In an effort to ensure healthy competition from forthcoming weekly sports paper the Sportsman, British publication The Racing Post, now 20 years old, is launching its own weekly sports paper, called RPSport. The supplement will appear in Saturday editions of the Racing Post beginning Jan. 14 and will cover a wide range of sports, including football, rugby and cricket from a betting perspective. "RPSport is the biggest single change we have made to the structure of the paper since we started 20 years ago this April," said Editorial Director Brough Scott.