And, for the first time in the history of horse racing you can bet the field against a horse. For instance, say you thought the number two horse was over bet. Let’s say it is even money and you think “This horse ought to be four to one.” You can offer up, say, two to one on the horse or get even money. Or you can flip it around and bet every other horse to win and simplify that by what they call “laying the horse” so you lay the odds on the horse. That is a new wager that the industry is desperately in need of because field size is shrinking, there's a lack of horses and a lack of competitive races to some extent, too.
As horseplayers, we are really forced to sit on our hands for a lot of races or bet on other entertainment options. Ultimately, the ability to bet a horse to lose -- or perhaps I should say betting every other horse to win -- is a real benefit. A lot of guys on Horseplayers were even talking about that and how they would need that to be more profitable. Having been to London and spending endless hours playing with the exchange -- well, it’s almost like a video game!
Marcya: So, how sophisticated do you have to be to take advantage of exchange wagering?
Christian: You can get as sophisticated with the wagering as you want but basically the interface is very simple.
“Back or lay” is what they say in the U.K. “Back” is their term for “win.” You use the Click button and pick your price just like on eBay. Then you choose your odds and your “stake” which is your amount. Say you wanted ten to one. So you put ten. Then say you want $100 so you push “Send” and at that point you are in the market. So other people will look at that price and you can see where the price is moving to and, literally, see what the current price is being offered right now just like an auction.
You can see, for instance, that someone is offering say, 9.5 and you say, “Oh, I’ll just take 9.5 ‘cause I don’t want to wait" and you just put your money down and you can see how much money is available. Or, alternatively, you can be greedy or picky and say “I want ten, and if they don’t give me ten I’m not going to bet.” If your bid isn’t matched, it just gets refunded to your account and you can come back when you wish.
The other alternative in that case is the other side of the coin which is a blue button that says “Lay.” Here you would effectively be giving the odds on that horse. You would be playing the devil’s advocate. You’d be able to take the action on that horse with whatever odds you chose and at any moment change it. That’s the most simple form. It’s just bet to win, or bet every horse to win except one, then choose your amount. Or you can do it the way the traders use it and go back and forth, back and forth, back and forth so they’ll be betting say tens of thousands of dollars.
The interesting thing is that it’s not really about the volume. It’s about the risk. Because if you bet $10,000 to win on a horse you may go “Oh man that is crazy!” But as long as there is enough liquidity in the market and you see that there is an opportunity to sell $10,000 worth of that horse at slightly over or around the same price point, you are not really risking anything because you may buy $10,000 at 5 and you may all of a sudden see the market go to say 4.8, 4.7, 4.6. You start to get nervous and say, “OK I’m just going to sell $10,000 at 4.7 and lose maybe $20, $30 or $40 or whatever.” So you back out. All in all your risk is still very small if you are playing that way. That would be more for the sophisticated player.