etfair has opened an office in San Francisco, where it’s likely to more than quadruple its workforce next year to about 100, said Stephen Burn, the company’s global director of racing. California’s law, the first in the nation to legalize so-called exchange wagering, takes effect in May 2012.
“There’s potentially massive upside there for us,” said Burn, who moved to the state from England a year ago. “We don’t share the doom and gloom that other people have been coming up with about U.S. horseracing.”
California gamblers are currently limited to pool betting, where money wagered on a horse is shared by the people who win. Exchange wagering works like a stock exchange, letting a racing fan bet on a horse to win or lose -- even after the race has started -- with the odds changing in real time. As the developer of the exchange, Betfair gets a commission on every wager.
Governor Arnold Schwarzenegger and the California legislature are counting on the law to help save the state’s struggling horse tracks. In the past decade, the amount bet on races has dropped about 10 percent, and attendance at tracks tumbled by more than a third.
Betfair says it’s in a unique position to benefit from the law because it has an online exchange designed for horseracing and can work with regulators to ensure bets follow the rules. While lots of other sites provide online betting, many focus more on poker or other card games and aren’t legal in the U.S.
Founded in 1999, Betfair’s exchange lets Internet users worldwide bet on sporting events, including horseracing. Most of its 3 million customers are outside the U.S.
The firm first sold shares to the public in October and is valued at about us$ 2.2 billion on the London Stock Exchange. Horseracing accounts for about 35 % of revenue, according to Burn. The company reported a 13 % increase in fiscal 2010 sales to us$ 535.8 million.
It entered the US in January 2009 with the $50 million purchase of Los Angeles-based TVG, a TV network and betting site that operates in states where gambling on horseracing is legal. About 350 of Betfair’s 2,000 employees work for TVG.