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Betfair takes a £35m punt on American racing channel 28/01/2009
Greg Wood

Betfair, the internet betting exchange which matched its first bet less than 10 years ago, took a huge stride into the American racing and betting markets yesterday when it purchased the racing television channel TVG for $50m (£35m).

TVG covers racing from 70 tracks in 16 states, including the major racing centres of Kentucky, California and New York. It also accepts bets from residents of those states, dividing the profits with the racecourses concerned, which include Churchill Downs, the home of the Kentucky Derby, Santa Anita, Belmont Park and Saratoga.

Betting in the US is strictly regulated, and its gambling market has previously been considered off-limits for British betting firms. Betfair has no plans at present to introduce its exchange model of betting into the American market, but will expect to use its cutting-edge betting technology to improve the pari-mutuel service to TVG clients.

Looking further into the future, meanwhile, Betfair's purchase of TVG must also give the company a significant head start on its competitors if, or when, current regulation is eased. US racing has struggled to compete in the domestic gambling market in recent years, prompting some industry figures to suggest that an exchange model, giving punters much greater choice and flexibility in their betting, could be the way forward.

"We have waited to enter the US market until we had a high-quality, and above all, legal product offering," David Yu, Betfair's chief executive, said yesteday, "and we believe with this acquisition we have secured those goals."