While not as sudden as sports betting is sweeping the country, fixed odds betting in horse racing is coming to the US and should be accepted and understood by horsemen.
That is the advice of two heads of major equestrian content distributors and two executives of the horse association. They spoke on 9 March during a closing day panel at the National Horsemen’s Benevolence and Protection Association conference, held in conjunction with the International Association of Racing Commissioners at the Monteleone Hotel in New Orleans.
Panelists covered the growth of US races sending their race signals to legal bookies abroad as well as the possibilities and challenges of introducing odds Fixed, house-style betting as a betting option on US races, whether at a physical track or another traditional establishment, or online.
“We really have a spell to educate our members about what’s to come,” said HBPA National Executive Director Eric Hamelback. “Whether you decide as a state—put it in, don’t include it, or if you’re lucky enough to get a sports betting license—I believe sports betting and fixed odds is in our future. But it’s up to us to continue to properly educate people about the pros, cons and nuances of what’s going on.”
Board moderator Michele Fischer offers some statistics: A total of $44.3 billion globally have been staked in 2022 through legalized fixed odds in horse racing. Leading the way is Australia with $19.1 billion and the United Kingdom with $12.9 billion. Since United Stakes sports betting emerged in 2018, states have reportedly processed more than $200 billion, according to legalsportsreport.com. The point is: Fixed odds in sports and horse racing are popular around the world, and American racetracks need to take part in the booming sports betting activity around the country.
American horse racing for more than a century has been based on pari-mutuel betting—in which players bet against each other and the final odds are not determined until the bet ends in a race. . With fixed odds betting, players can lock in prices and compete with the bookie, not only on sports betting but also on horse betting.
A betting ticket with fixed odds at Monmouth Park
Sports betting is currently offered in some form in 36 states and Washington DC, with enabling legislation in some other jurisdictions and ahead of legislators in several others. Currently only New Jersey and Colorado implement fixed odds betting in horse racing.
Offering the same structure as sports betting, fixed odds has the potential to grow the horse racing market, panelists agree. But they stress that it will take some time for the industry to fully reap the benefits, with the betting public likely to react in unexpected ways.
“There are many ways that low margins can turn into huge profits. But to believe you’ll know exactly what’s going on from day one is completely unrealistic,” said Richard Ames, Director British CEO- said. based on Sports Information Services and president of SIS Content Services, the largest provider of horse racing content to global bookmakers/sportsbooks. “Starting is important. Data transparency is important and then moving forward. There is no long-term transaction from day one or some flexibility to adapt to the way consumers are. want to play, that’s the way to approach this challenge.”
The risk of corroding existing pari-mutuel pools if fixed odds are also introduced has long been discussed.
Scott Daruty, president of US-based Monarch Content Management, which buys and sells simulcasts for more than a dozen leading companies in North America, said: “I think everyone in this room agrees that we’ve got them. I want to bring my racing product to sports betting customers. song. “…But it’s important that we present it in a way that doesn’t harm our pari-mutuel group. We have some pretty definitive thoughts on what that means. First and most importantly: we believe that fixed odds betting should be offered on a win-and-spot basis only.”
That prompted Ames, the former chief executive officer of Ladbrokes, the market leader in retail betting, to protest.
“Joining (saying) we will limit what you can do misses the point of sportsbook attitudes towards horse racing,” Ames said. “We have to remember that these sportsbooks are generating huge sales and horse racing is late to the party. Those sportsbooks need to want to do it… They’ll have to pay to be willing to bring them. follow these props into the market and those props will compete with other sports. I recognize the challenge around cannibalism. But I think getting into the sportsbook with the attitude, ‘ we’ll restrict you from the start’ won’t get them buying into the production and doing it in a way that maximizes profits for everyone.”
Dave Basler, HBPA Ohio executive, and HBPA Louisiana executive Ed Fenasci emphasize that riders need to be informed and part of the decision-making process.
“There is a strong possibility (fixed odds) to bring in more volume and any cannibalism is minimal as it offers more parity bets through the new volume,” Basler said. ,” said Basler. “But I don’t know… If you’re making a total of $250,000 a day, you won’t have much of a disadvantage trying fixed odds. It’s going to be a different equation for trading that won’t work. you approve more than one Santa Anita . Park that’s a $10 million – $12 million daily bet, a lot of which is on the right track.”
Ames and Daruty differ on which deal structure will be most beneficial to America’s racetracks and cavalry. Ames said the industry seems to be settling on a percentage of sales, whether gross or net.
“Either way, the bookie pays a percentage of the revenue they make” instead of a flat fee per card, he said. “The reason we generally advocate that is because it means everyone has the same concern: How do we maximize the value of the content?
“One of the challenges with the economics of fixed-odds betting is that the numbers look quite different than they do on pari-mutuel. The idea of ’buy-out’ in teenagers or 20 cents over the period. revenue share (betting) could be 2%.Those numbers look very different.That’s not to say they can’t bring in more money in the long run, but in the short term, they do. it’s pretty hard to get you thinking. It needs to be incremental. In general, I recommend taking a common approach with the bookmaker. That means everyone is speaking the same language.”
Daruty offers a different point of view. “I think it’s important that you don’t put too much emphasis on taking a small piece because it will turn out to be a big, very big pot,” he says. “That’s great, and maybe you can in a new market. But again, if you’re eating away at your pari-mutuel pools, you’ll end up losing money in the long run.
“What we want to make sure it never happens is that our horse race is used as a loss lead product. You take a horse 5-1 and the sportsbooks are running. competition so one book 6-1 and one book 7-1. In the end, they’re not making money from that race, but they’re using it to attract customers. see? You get a portion of their profits on it, which is zero. All you’ve done is move people out of your pari-mutuel pool and into fixed odds.”
Fischer, an industry consultant based in Louisville, Ky., now vice president of Content Services for SIS, asked why not add parity betting to US sports betting? Daruty says that could be the answer.
Daruty—whose ownership rights include Santa Anita . Park And Gulfstream Park in its track portfolio—states that the largest form of betting in the United States is the lottery, “which is a form of parity betting.
“I’m not saying we’re against fixed-odds race, but we look at it very cautiously and very carefully,” he said. “I think if there’s one thing we’ll all agree on, we need to get our racing product out to all of these sports betting customers. Our company is very open to fixed odds. determined, but only if we can do it in a controlled environment. , measure that doesn’t cut our business.”
Back to Ames: “Everything that happens in those sportsbook sites has fixed odds. The idea is that you’re going to try to force those consumers, who have the big upside opportunities, to have to. learning how to bet in a different way, to me, that seems counter-intuitive… I think to really take advantage of these sportsbooks there has to be a fixed odds solution. That doesn’t mean there can’t be an equal solution.”
Meanwhile, the US racing product is coveted by content distributors as they are trying to provide round-the-clock betting products to their global customers.
Daruty said his company’s first foray into international markets was “a complete failure”. Success came when they started offering odds on books overseas and tailoring the packaging to each foreign market. That includes hiring a team to call races in the local language on a second audio feed.
Fenasci said he was surprised to learn last summer that Louisiana Land‘ the best foreign store is Spain, saying, ‘When I look at these contracts, it is very important for riders to get feedback on exactly where the product is going and the volume. generated in those markets, so you can continuously evaluate and make the right decisions.”
The Ohio and Louisiana riders have been at the forefront of ensuring their wallets benefit from overseas betting on their races.
“It is imperative that your product gets into as many bookstores as possible,” says Fenasci. “When you’re dealing with distribution, you want to partner with reputable companies with relationships around the world to get your content distributed as wide as possible. We already have long-term agreements with schools. race that our wallet will share in the revenue generated directly from the horse racing.”
Basler said the Ohio Riders handled it through their domestic simulated broadcast approval. “They are very specific that in order to sell US content inside the US or outside the US, all websites must be disclosed to us and approved and we must receive our share of the revenue. ,” he said.
This press release has been edited by BloodHorse Staff for content and style.
