Horse Racing’s Future Could Keep Escalating Thanks To Fixed-Odds Betting, Advance-Deposit Wagering

Written By Brant James on May 19, 2022
Horse racing continues to be a popular sport to bet on.

Rich Strike’s humans let him down.

Not in owner Rick Dawson and trainer Eric Reed deciding to hold the 80-to-1 shot Kentucky Derby winner out of the Preakness Stakes on Saturday and prep for the Belmont. That was unfortunate for three-Saturdays-a-year horse racing fans, but a humane decision in need of more. Or even if it was a financial one – hello, stud fees! – it was humane-adjacent.

The feelingest of feel-good stories unraveled in the days after the Derby not, like last year, because of a failed drug test, but because boorish tweets were unearthed in Reed’s Twitter feed and jockey Sonny Leon was suspended for a combination of careless riding, working under falsified documents and previously inflicting visible injuries on a mount with his whip.

Who ya hanging out with, Rich?

It’s all a momentum-stopper for thoroughbred horse racing as a mainstream spectacle, especially after the Kentucky Derby posted a record $179 million handle that was 8% better than the record set in 2019, according to Churchill Downs.

Television ratings – up 8% from last year- figure to sag in Baltimore and at the Belmont Stakes on June 11 with a 14th Triple Crown not in play. Horse racing will recess to the daily grind of the anonymous enterprise that curls the national eye brown only when a $30,000 claimer like Rich Strike makes everyone believe in fairy tales again.

And that daily enterprise needs constant attention to stem its generational recession.

Horse racing still seeking to reclaim its place as a daily dalliance

In fairness, there have been some positive markers. In 2021, pari-mutuel handle in the United States was the highest since 2009, even with 15,901 fewer races nationally.

Maybe the sport, as former National Thoroughbred Racing Association President Alex Waldrop hoped, had established an audience when it was one of a scant few domestic products during Covid-19 shutdowns in 2020.

If so, or at least if that’s part of it, more much-needed progress was made recently for those toiling in shed rows far from Churchill Downs.

The day before the Kentucky Derby, at Monmouth Park, New Jersey finally handled its first fixed-odds horse wagering after years of wrangling. As opposed to the pari-mutuel form of horse betting prevalent in the United States – but nearly defunct globally – fixed-odds wagering allows bettors to lock in the price of a bet at the time of purchase.

In pari-mutuel wagering, where bettors are vying against each other for their portion of a pool, odds fluctuate with each bet cast until the race begins. Fixed-odds, in theory, would entice more mainstream bettors who wager on traditional team sports games to give horse racing a shot. They could even parlay a flier on a filly with a flier on the Phillies and Flyers.

“Consumers now who go in won’t be able to be beat up by the whales,” William Pascrell III previously told PlayUSA in comparing fixed-odds to pari-mutuel. “You place a bet on a 10-1 and then you realize you’re only getting 3-1 because by the time it clicked off, the whales came in and made it a favorite. You got screwed. It helps the pedestrian consumer because he’s getting a fixed odds bet and it’s not going to move.”

Pascrell III, a lobbyist who worked doggedly on the issue for the past several years, cast the first fixed-odds bet. That New Jersey track in 2021 signed Australian company BetMakers Technology Group and PointsBet to establish odds apart from the pari-mutuel lines in a ten-year deal. The system will be available only for win, place, and show bets at Monmouth for now.

Various other states including New York, Kentucky, Maryland, and Colorado have explored the system to some extent.


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Photo by Jeff Roberson / The Associated Press
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Brant James

Brant James is a veteran journalist who has twice been recognized in the Associated Press Sports Editors Awards, most recently in 2020. He's covered motorsports, the National Hockey League and Major League Baseball among a myriad of others beats and written enterprise and sports business for publications including USA TODAY, ESPN.com, SI.com.

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