Based on a panel discussion at the August 14 Saratoga Horse Racing and Gaming Conference on fixed-odds betting on horse racing in the United States, there is little hope that this type of betting will be widely adopted anytime soon, although most of the panel would like to see such a move.
For years, Nevada has largely been the only state that has allowed fixed-odds sports betting, but a Supreme Court ruling will change that. Considering it’s been more than six years since that ruling paved the way for other states to allow fixed-odds sports betting and more than 30 states have joined in that time, Wednesday’s talk certainly doesn’t suggest any urgency to move forward with fixed-odds betting on racing.
There have been some changes. In February, Colorado became the first state to allow fixed-odds betting on horse racing via a mobile platform (Bet365 provides the content), and New Jersey has allowed fixed-odds betting at Monmouth Park. However, the vast majority of betting on horse races in the United States (within the United States) continues to take place through pari-mutuel betting—in which bettors compete against each other after taking a percentage of the pool to pay the track, jockeys, bookmakers, large bettors’ refunds, and taxes.
Fixed odds betting allows bettors to know in advance what the payout will be if they choose, for example, the Dallas Cowboys over the Philadelphia Eagles, or in the case of racing, Dornoch to win the Belmont Stakes (G1).
Because horse racing relies on betting for revenue, such deals would have to include a percentage of the money going to the industry: primarily the tracks and riders. In addition, major track owners such as Churchill Downs Inc., 1/ST Racing and the New York Horse Racing Association all have ADW platforms on the pari-mutuel side and would have to consider the impact on those operations.
Because horse racing is regulated state by state and also requires agreements with industry participants — tracks and jockeys — it would be “incredibly complicated” to roll out nationwide, said Joe Asher, former president of sports betting at gaming provider IGT and president of The Wilson Center.
“I just think it’s very difficult to do that in the US regulatory system,” Asher said. “So I come back to the question of how do you give sports bettors a way to bet on the next race with an informed opinion available in the app? Make sure that with a little bit of effort, they can bet. That’s where I focus.”
Providing sports bettors with access to pari-mutuel betting on races is an approach that has been adopted to varying degrees by the country’s two major sports betting apps: FanDuel and DraftKings. The FanDuel app is the most advanced in this category, offering players a shared wallet for their pari-mutuel bets.
Earlier this year, FanDuel reported that for the first time, 200,000 people bet on horse racing on Kentucky Derby (G1) day. With shared wallets and horse racing betting just a click away, that achievement came after a massive marketing campaign for the Derby. Board member Tom Cassidy, senior director of industry relations at FanDuel, noted that his company has interests in fixed-odds and pari-mutuel betting.
With that in mind, FanDuel has tried to support both with a digital wallet and joint marketing. In explaining the compromise, he noted that there was never a single entity that could make changes like adding fixed-odds betting to racing.
“It seems like fixed odds are going to bring some changes to the current landscape,” Cassidy says. “I think that’s the important thing: making sure that everyone is comfortable with what it looks like and what those changes are going to bring. It’s not about taking the easy way out here, but it has to make sense for everyone involved for it to be a viable product.”
DraftKings has a pari-mutuel app called DK Racing (in partnership with CDI). Chris Cipolla, DraftKings’ general manager of horse racing, said he would like to see easier exchanges between the two as a way to increase horse racing betting.
“We had strong participation in racing but with the layers of friction, we saw a lot of decline when we cross-sold out of the sportsbook,” Cipolla said. “Credit to FanDuel, they did a great job of removing those layers of friction and that’s what we’re aiming for as well.”
Board member Matt Cosgriff, BetMGM’s director of retail betting and customer analytics, is more optimistic that fixed-odds betting on racing will eventually be offered alongside other sports across all major platforms.
“It’s coming,” Cosgriff said, noting the additions in Colorado and New Jersey and mentioning that it’s silly that he could go to an international platform and bet fixed odds on Saratoga Race Track but can’t do that in the US “I think success breeds success (and it has worked) when you look at the rest of the world.”
Panel moderator Michele Fischer, vice president of SIS Content Services, a Colorado-based provider of racetrack content, noted that the state is gaining traction in fixed-odds betting on racing. (Figures are expected soon.)
The panelists agreed that horse racing has some unique qualities, including that it takes place at times when other sports are unavailable and that it doesn’t take as long to determine an outcome. Cipolla noted that the ultimate “friction” removal would be to place horse racing alongside other sports on a fixed-odds basis. And he added that pari-mutuel betting would continue.
“We’re excited about fixed odds, but we’re not offering it yet,” Cipolla said. “Fixed odds make a lot of sense simply because our customers are used to it. The pari-mutuel learning curve, especially for someone who doesn’t bet on horse racing, has to be educated. It takes time.
“We think it’s important to have content. When we talk about horse racing, we find that the top horse racing content gets the most engagement. It’s the content that’s most relatable to people. I think that’s a really important part of fixed odds betting and when that content is available, it can coexist with pari-mutuel betting.”
Cipolla notes that fixed-odds betting can offer some basic bets that aren’t typically found on the pari-mutuel side, such as how many wins a rider or trainer will have on a given card. Those basic bets can help attract people to the sport.
In a panel on pari-mutuel betting that kicked off Wednesday, AmTote president Keith Johnson suggested that pari-mutuel betting could actually move into more sports betting soon. He said pari-mutuel betting is better suited to offering complex, multi-leg bets.
“I think offering pari-mutuel betting with those same sports betting operators for certain types of sporting events would be facilitated through pari-mutuel, particularly events with multiple outcomes that are difficult to price and difficult to accept, there are a lot of markets and sub-markets that are currently underserved because they are really difficult to implement in a fixed odds way,” Johnson said. “That’s something we can do with sports betting operators. It’s outside of horse racing and I think you’ll see more of that. We’ve done some of that internationally with football betting groups and had some success. I think there’s room for more.”
Johnson said he expected to announce more efforts in the area in the coming weeks. He also noted that he believes fixed-odds betting can work in horse racing but must be done in creative ways. He said it offers an opportunity to increase the number of players interested in betting on horse racing.
Such an increase is necessary in a sport where in 2023 the total amount of pari-mutuel bets recorded is similar to 2009—and that’s not even accounting for inflation. Those hopes were raised Wednesday, at a meeting held more than six years after the Supreme Court ruling paved the way for fixed-odds sports betting.
