In exchange wagering, bettors can pick a horse to win, choose the odds and put down a bet. Another bettor can match that wager, accept the odds and, in essence, bet against the first bettor. Such betting, overseen by a licensed operator, can be done online, over the phone or in person.
The exchange wagering operator pays the winning bettors out of a pool of bets and subtracts a commission to be shared with the horse owners and the racetrack operators.
Kirk Breed, executive director of the California Horse Racing Board, said the idea of introducing exchange wagering in the state is not new. He said business leaders in the state's horse-racing industry had been discussing it for more than two years as a way to save the industry.
"People in the industry itself have come forward to say we need something to save this business," he said.
If the law is passed, Breed said, the racing board could adopt rules and procedures within six months to govern exchange wagering. "Everybody has agreed all along that exchange wagering is the only game out there that has a potential for helping the industry," he said.