Keith Coppola talks about how New Jersey became the first state in the U.S. to implement “exchange wagering” that allows you to bet after the race has started.
Keith Coppola bet on the 1 and 5 horses to win in a recent race that took place at Monmouth Park.
The 7 horse wound up the winner — but it wasn’t a complete loss for Coppola. He wound up getting most of his $250 in original wagers back thanks to a tip from a fellow bettor — and the unique option in New Jersey of being able to bet on a race after the horses have left the starting gate.
It has been a little over a year since New Jersey joined the United Kingdom in offering “exchange wagering.” No longer must bettors lament a sluggish start by their favored horse, leaving them almost two full minutes to helplessly watch as those who chose faster horses cheer them to the finish. Now they can make new bets in mid-race on races throughout the country as online bettors offer adjusted odds based on early developments in the race.
Exchange wagering is so named because the gambling resembles a stock exchange, with ever-changing prices and constant buying and selling as one person seeks to sell at that price while another wants to buy. The betting takes place on smart phones, tablets, and other electronic devices. While Coppola, a Verona resident, and his crew prefer to gather at the Meadowlands on most weekdays, exchange players can bet anywhere in the state.
The bets can be placed on win, lose or draw. Exchange wagering helps when a bettor is sure that a particular horse – even if it is one of the favorites – won’t win but has no idea who will win. It allows bettors to place a bet that pays off as long as the horse doesn’t win. It even allows a bettor to cash out mid-race.
The new wagering is still in its relative infancy, but is growing in popularity. The $250,000 that gamblers risked on the exchange during the recent Haskell Day races at Monmouth Park was about double the amount wagered on the exchange for Haskell Day races a year earlier. The pool of New Jersey exchange players remains small – about 400 wagered on Haskell Day – but May/June/July exchange betting figures at the height of racing season also has doubled from $1 million to $2 million.
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So how did Coppola salvage that Monmouth Park race? Before the race, Albert Moller of Wayne told him that with the withdrawal of the 2 and 3 horses — which that would have lured the 7 horse into an early sprint that would have worn the thoroughbred out — the 7 horse how had a great chance if it got a solid start.
Sure enough, the 7 horse got a good start and Coppola within seconds was able to accept several bets from other players on his electronic tablet – many are from outside the U.S. – for the 7 to win. At race’s end, Coppola had gotten back almost $200.
“I liked the other horses better, but we also knew that only the 7 was another threat, so we were ready for that possibility,” Coppola said.
Not all such races pay off so modestly for a small group of hardcore professional handicappers, some of whom tend to arrive each weekday for the 11 a.m., opening of Meadowlands Racetrack simulcasting – and stay until the 11 p.m. closing.
After all, to these pros every race available around the country and around the world is another opportunity to strike it big.
A recent Friday visit to a small room several floors above the large simulcasting area found Coppola and Moller – the two wise-cracking players of the group – and more laidback regulars Robert Herskowitz of Wayne and Leonard DeStefano of Secaucus. DeStefano shuns the electronic aspect of the betting, but his many decades of picking winners makes him a key player.
That group — all in their 50s except the 82-year-old DeStefano — won a collective average of about $60,000 per month in April, May, and June, Coppola said. That includes bets of $200 to $400 on races they particularly like — and up to $1,000 on a race that breaks just the right way, in their eyes.
July proved cruel, however – the group lost about $40,000 in all, Coppola said, thanks to a long run of horses who lost by a nose and others who looked promising before being disqualified during the race.
“We’re all professional handicappers, but some are specialists on certain tracks,” said Coppola, who also acts as a consultant for exchange wagering operator BetFair to help raise awareness of the new gambling among traditional bettors. “I wouldn’t call it gambling at all, given the expertise we have.”
Coppola, 51, said his previous experience as a consultant producing automated platforms for day-trading stock firms as well as a longtime love for horse racing made exchange wagering a natural fit for him.
The pre-race “parade” of the racehorses, Coppola said, often gave valuable information to the observant bettor. “My father bred horses, so I grew up knowing what I’m looking at,” Coppola said. “Is he well-fed? I look at his flesh. Why does he have bandages [on his leg] this time but not last time?”
Coppola added that skittish, perspiring horses rarely do well, allowing a chance to profit from a betting option not available on the traditional tote board. That is, you can “lay” the horse — wager that the horse will not win, or not even finish second or third, either — and accept an offer of any amount from a bettor who believed in the horse.
One skittish horse spotted by Coppola that afternoon led him to say he “hated” the horse in that race — and indeed the horse was slow out of the gate. But Coppola waited seconds too long to place his wagers against the horse and by the time he sought to find such action, that segment of the exchange had dried up.
Uncharted territory in U.S.
Kip Levin, the chief executive officer for BetFair, a London-based online gambling company that has offered such wagering in the United Kingdom for 15 years, said they didn’t know what to expect when they launched the gambling service in New Jersey in mid-2016.
“There was a lot of uncertainty around how many tracks would participate,” said Levin.
New Jersey residents can now bet on more than 40 tracks in the U.S. and a handful of others around the world. The New York Racing Association and regulators in California and Kentucky – which feature some of the most popular racing sites in the U.S – .are among those who have not yet added their tracks to the exchange wagering mix.
Levin said that racing industry officials have expressed a variety of concerns – including some that are inaccurate. For instance, Levin said there have been misconceptions that bettors can gamble on who will lead at a specific point in a race.
“The only thing we can do with those not yet on board is to keep showing the data, and try to get them convinced,” Levin said.
Monmouth Park operator Dennis Drazin said the failure to land more big-name tracks on the exchange is the main disappointment so far. “But we are on track for significantly bigger numbers three to five years down the road,” Drazin said.
Americans more leery of gambling than British
The United Kingdom, like much of the world, is far more accepting of all sorts of gambling that doesn’t take place in the U.S. Only Nevada offers full-scale legal betting on sporting events, for instance, while New Jersey, Delaware, and Nevada offer legal online poker.
Overseas, almost anything goes gambling-wise. In Nov. 2014, for instance, gamblers on PaddyPower.com – an Irish bookmaking firm that last year merged with BetFair – could have wagered on 9 to 2 odds on co-favorites Gov. Chris Christie or U.S. Sen. Rand Paul to win the Republican Party Presidential nomination. Ex-New York City Mayor Michael Bloomberg was listed at 25 to 1, while eventual winner Donald Trump fetched odds of 66 to 1 at that time. PaddyPower paid out about $1 million to Hillary Clinton bettors a few weeks before the November election – then another $4.5 million to Trump bettors after the results were certified.
“We’ve got Puritan roots with us, still,” said Levin. “Per capita, it’s hard to imagine us ever gambling as much as they do in the U.K.”
Levin said that — just as occurred with online casino gaming in New Jersey upon its legalization in 2013 — fears by existing gambling operators that online alternatives would cannibalize them have proven mostly unfounded.
Instead, in each case total revenues have increased for casinos and racetracks because the bulk of the online revenue has come from new gamblers. About 70 percent of exchange wagering revenues derives from new customers, while the other 30 percent have tended to gamble even more in the traditional pari-mutuel betting pools, Levin said.
At the recent Haskell Day races at Monmouth Park, BetFair employees sought out potential exchange customers and showed them how it works on tablets or smart phones.
Younger betting crowd on the exchange
Exchange wagering has attracted “whales” – those who bet thousands per race – as well as more frugal customers, Levin said.
But a key aspect of the new betting is the relative youth movement. While the average age of a horse racing bettor in the state is 61, the typical exchange bettor is 20 years younger.
Some of the younger exchange bettors have Wall Street backgrounds and are comfortable with ever-changing marketplaces, Levin said. Others have been “day trading” on the stock market for years, leaving them undaunted by such a volatile betting environment.
Exchange bettors might make two or three adjustments to their gambling position in the course of a two-minute race, Levin added. Others will make even more new bets, or cash out a profit shortly into a race in which the bettor’s horse has gotten off to an unexpectedly good start. The digital betting platform constantly shows an ever-changing “payout” figure in green as long as there is an opportunity for a bettor to lock in a profit.
“But one thing we have learned is that if it’s too good to be true, that’s always a bad sign,” Coppola said. “If you can get 10 to 1 odds [on the exchange] for a horse that you think should win, that horse will almost always lose.”
And while some of those new bettors are more interested in exploiting market inefficiencies than watching a thoroughbred run at full speed in a race, Levin said that many quickly realize they can learn a lot from attending races. Visiting the Meadowlands Racetrack or Monmouth Park — and closely watching the behavior of the horses — could give them a leg up on a rival bettor from the United Kingdom who doesn’t see such subtle cues.
Exchange wagering opportunities
The recent Haskell winner, Girvin, made his most ardent supporters a lot of extra money on the exchange. Traditional bettors all got 9 to 1 odds on Girvin — which, while a satisfactory payoff, pales compared to exchange bettors getting up to 10 times that price before the race — and 30 to 1 odds during the early part of the race.
Last year, Haskell winner Exaggerator’s traditional odds proved to be 5 to 2 at post time, while the horse opened at longer 4 to 1 odds on the exchange with the odds briefly getting even longer as he trailed the field at the start. Shrewd exchange wagering players were able to exploit that opportunity.
California is the only other state that has legalized exchange wagering, but the process has yet to be implemented there, in part because the horsemen and the racetrack owners haven’t yet agreed on the size of each’s share of the revenue.
“On a national level exchange wagering is pretty much known only by real insiders,” said Ray Paulick, founder of The Lexington, Ky.-based Paulick Report horse racing industry analysis website. “It’s not talked about a lot, even though it certainly has been successful in the United Kingdom.”
Paulick said that ability for wealthy players to “lock in” attractive odds hours before a race may be the most appealing of the new features for many gamblers.
Some “whales” – as the biggest sports and casino bettors are known – are talking about moving to New Jersey to enable them to profit from exchange wagering, Coppola said. Exchange wagering is only open to New Jersey residents while they are within the state’s borders.
Joe Bravo, a leading jockey at Monmouth Park since the 1990s, said like many of his rivals, he was hesitant about the idea of exchange wagering at first.
“I think the bigger fear was if a bettor was allowed to bet on who would finish last, and what the public would think of that,” Bravo said. “But like all the rumors, it turned out not to be true. Apparently a lot of gamblers enjoy it, so I’m for it. If it’s good for horse racing, it’s good for jockeys.”
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