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BetMakers secures 10-year deal to manage fixed odds horse racing in New Jersey
5th February, 00:54Racing data and analytics supplier BetMakers Technology Group (ASX: BET) has struck an exclusive 10-year deal that will see it managing fixed odds horse racing in the US state of New Jersey.
Earlier today, BetMakers confirmed it had signed an agreement with New Jersey Thoroughbred Horsemen Association and US company Darby Development which operates the Monmouth Park racetrack in Oceanport.
The racetrack serves as a key venue in the annual racing season and hosts its premier event, the Haskell Invitational, every year.
The agreement will see BetMakers managing fixed odds horse racing services at the track while securing access to exclusive distribution of Monmouth Park racing content throughout the US and internationally.
Under terms of the agreement, BetMakers will be the only approved distributor of fixed odds horse racing content in New Jersey. Furthermore, the company will be responsible for providing a solution for racing bodies from the US to access licensed bookmakers operating in New Jersey.
"We have been instrumental in the roll-out of sports betting into the US and now we will be the driver of Fixed Odds horse racing in New Jersey and hopefully throughout the U.S. We selected BetMakers as our partner in delivering this concept due to their extensive knowledge and understanding of what is required to make this a success," said Monmouth Park chief executive officer Dennis Drazin.
BetMakers will also have the right to exclusively distribute Monmouth Park racing into other US and international regions while Monmouth has agreed to make its tote pools available for international bookmakers, which is expected to assist the growth of the domestic tote pools market.
"We have been working with racing bodies and bookmakers from all parts of the world to develop the best solution that fits into the horse racing ecosystem," said BetMakers chief executive officer Todd Buckingham.
"We believe that US horse racing has the potential to be the largest betting sport in the US, including basketball, American football and baseball. There is a real opportunity for the US horse racing market to grow like it has in Australia, which has seen prizemoney levels double over the past 7-10 years based on a funding model that is equitable to all participants," said Mr Buckingham.
In recent years, New Jersey has been fertile ground for the groundswell of demand for sports betting in the US. The state has been a pioneer for fixed odds sports betting in comparison to other states and is now one of the leading hotspots for sports betting in the US.
Currently, US fixed odds sports betting generates an annual turnover of more than US$4.5 billion (A$6.7 billion) and is undergoing somewhat of a renaissance following a Supreme Court ruling in 2018 that removed a law banning sports betting in most US states.
Since the ruling came into effect, legal sports betting has grown rapidly to become a multibillion-dollar industry, raking in billions of dollars in revenue for betting companies nationwide. By comparison, the American Gaming Association estimates that US customers spend as much as US$150 billion in illegal sports bets every year.
The shift from the shady illegal past to a transparent legal future is underway which has attracted a host of companies seeking to offer a variety of sports betting services.
According to BetMakers, its agreement with Darby and accompanying 10-year access to Monmouth racetrack means it can access one of the largest sports betting markets in the world and potentially harness the rapid growth of horse racing as a prime segment of the broader industry.
The company said it now intends to form agreements with other US-based and foreign racetracks that would want to access the New Jersey fixed odds market by offering their content to bookmakers licensed in New Jersey.
Given the specific regulations of the US betting market, bookmakers must agree to terms under the New Jersey fixed odds model which includes paying a portion of its turnover back to the racetrack as "rights fees".
To further boost popularity and awareness of the re-emergence of US sports betting, BetMakers founded the Global Racing Network which it says will initially launch in New Jersey and provide a uniformed set of standard conditions for both racing bodies and bookmakers to allow clarity of reporting and distribution of data and content.
In its most recent company figures, BetMakers reported in excess of $4 million in unaudited revenue for the second half of last year and forecast a revenue figure of $10 million for the current financial year.
In the last quarter of 2019, the racing data supplier also raised $2.76 million via a placement to investors and declared the capital raising as having "strengthened the balance sheet and provides the company with the financial resources to invest in a number of strategic opportunities".
This morning's news helped to boost BetMakers shares by 33% up to $0.32 per share.