The 'wagering agreement' should swell 'common pool' betting on the Cup races from around the world, and in particular from Europe.
Over $17m was pumped into US pools from abroad at last year's Cup meeting, but with Betfair promoting the pool option to its 2.5 million clients, the Cup organisation will hope for a substantial increase this year.
Greg Avioli, the president and chief execitive of the Breeders' Cup, said that the wagering agreement was 'a gateway to the future'.
'It is our belief that the future of horse racing is international common-pooling,' Avioli said. 'More than $100bn is wagered on racing around the world each year, but less than $20bn is bet through countries that common-pool.
'As more and more international horses participate in our championships, interest levels and wagering handle [turn-over] from around the world continue to increase, allowing us to maintain the highest possible purse levels for the event.'
Betfair will hope that the 'simulcasting' deal will attract the interest of new clients as well as its existing base.
Although Betfair is currently unable to accept accounts from America, due to US gambling laws, it will be well placed to capitalise should the legislation change as the firm owns TVG, a channel dedicated to US racing and betting.