Based on the earliest of returns, the addition of brick-and-mortar sports wagering outlets at Kentucky racetracks may be spurring added interest in pari-mutuel wagering on horse racing.
That’s the good news in looking at the first two months of legal sports wagering in Kentucky. While in Kentucky there’s no money from sports betting specifically set aside for racing, the brick-and-mortar sports wagering outlets are tied to the state’s tracks. Racing executives hoped this approach would be an added attraction to bring people—specifically bettors—to the tracks. And once there, perhaps sports bettors would try their luck at racing.
That trend appears to have started since sports betting in Kentucky launched in early September. On-track pari-mutuel handle on Thoroughbred racing for the combined months of September and October in Kentucky improved 3.9% to $21,523,763. That gain in on-track wagering at Churchill Downs and Keeneland is even more impressive when you consider that wagering on United States racing in September was down 5.87% and in October declined 9.34%. (Keeneland partners on a sports betting facility at The Red Mile and wagers made there on Keeneland count as on-track bets. The sports betting area includes Keeneland programs and areas to bet on its races.)
Granted, it’s still early on all these numbers.
While on-track wagering saw a boost in Kentucky since sports wagering launched at brick-and-mortar locations in early September and online/mobile later that month, advance-deposit wagering and simulcast wagering did not see an increase. Oddly enough, just as on-track wagering enjoyed a 3.9% spike, ADW wagering (on all breeds) saw a 3.9% decline to $57,864,161. The biggest hit was seen in simulcast wagering, which plummeted 6.4% to $12,463,567.
I suppose one could say those declines were less than the declines seen nationally—so perhaps that’s a positive—but I can’t help but think that racing is missing a real opportunity here. For on-site wagering, Kentucky understood the importance and potential of bringing sports bettors right to the track. But that’s not occurring in the online/mobile arena.
Kudos to sports betting companies such as FanDuel and DraftKings for developing internet/mobile racing platforms marketed to their sports bettors, but to fully take advantage of the growth in legal sports betting, racing needs to be side by side with the other events on the sports betting platforms. And as part of that, race betting on those platforms needs to move from pari-mutuel to fixed-odds to be consistent with the other sports, making it easier to understand for the sports betting customers and allowing racing to be offered in multi-sport parlays.
The Kentucky Horse Racing Commission, which also oversees sports betting, recently reported sports wagering handle of $340,813,121 through Oct. 31. Mobile sports betting platforms have quickly established themselves as the preferred outlet for customers. The KHRC reported $323.6 million in handle on mobile platforms from Sept. 28-Oct. 31. From the Sept. 7 launch, brick-and-mortar outlets saw $17.2 million wagered.
Kentucky collected more than $7.9 million in excise taxes for these initial months, which puts the state well ahead of an annual projection of $23 million in such taxes.
Kentucky racing executives, industry officials, and legislators understood the potential in bringing sports bettors out to the track. Now it’s time for Kentucky, and all racing states, to see the potential in bringing racing to where most of the sports bettors reside—mobile platforms—in a language they understand: fixed-odds wagering.
