“A horse gallops with his lungs, perseveres with his heart and wins with his character,” once said Federico Tesio.
Horseracing has been a historic, long and successful sport steeped in rich tradition throughout the globe. It has been one of the most popular sports for many centuries. It is known as the “Sport of Kings.” The list of the world’s best horse race events is endless: The US Triple Crown, The Melbourne Cup, the Prix de I’ Arc de Triomphe (Paris), Royal Ascot (UK), The Dubai World Cup, The Grand National (UK), The Breeders Cup World Championship (US), and The Nakayama Grand Jump (Japan), to name a few.
America has a population of over 330 million and it does approximately $11bn in horse betting handle, down significantly from 10 years ago when we did approximately $16bn. In Australia, which has a rich legacy in horseracing, there is a population of 24.5 million and they do $40bn a year in handle. This contrast is largely the result of the introduction of fixed-odds horseracing in Australia 13 years ago. It has complemented and stabilized the traditional pari-mutuel tote betting systems.
The US horseracing industry has seen a drastic decline over the past dozen years. This is due to complacency, lack of innovation, and an aging fan base. US horse tracks are closing every year; over the past 20 years, over 45 tracks have closed while only three have opened. This industry deserves a boost and a chance to thrive and flourish once again.
Fixed-odds horseracing will revolutionize the US horseracing industry and give it a chance to get off the back foot.
In August 2021, New Jersey Governor Phil Murphy authorized fixed-odds betting on horseracing, marking a metamorphic moment in US horseracing with global impact.
With the passage of this legislation, New Jersey became the first state in the nation to legalize fixed-odds horse betting, continuing to position the Garden State as a leader in the US gambling industry.
Defining Fixed-Odds Betting
The US has largely utilized a 'pari-mutuel' system for horse betting since 1927. The French term translates to 'to wager among ourselves,' and it’s fitting: under a pari-mutuel system, gamblers place bets into a pooled system, against each other, and the tracks take a small rake for handling the bets.
The most important component of pari-mutuel betting is that the odds are not finalized until after all pre-start bets have been tallied. As such, larger players can dominate the movement of odds in a market, which can result in late odds fluctuations.
Fixed-odds horse betting, however, allows bettors to place a wager on a horse at a set price, alleviating concerns that the odds may fluctuate before the race. This system also places a bettor’s wager against the track or bookmaker, rather than another bettor. The odds you get are the odds you get.
Fixed-odds betting is more consumer-oriented. It helps gamblers to place secure bets at a fixed price; it simplifies the process of betting; it introduces an innovative product to horseracing; and a fixed-odds bet on horseracing is classified under New Jersey law as a horse bet, not a sports bet, so it isn’t taxed.
These factors make the act of horse betting much more enticing for gamblers, which unlocks new revenue that ultimately flows back to stakeholders while growing an exciting sport. It opens the industry up to a new generation of punters who are younger and more familiar to traditional sports betting, which operates in a
fixed-odds system.
Horse Betting in the Garden State
Fixed-odds in New Jersey are available online through BetMakers Technology Group, the only managed trading services company offering a fixed-odds platform licensed to serve the state. BetMakers is an Australian publicly traded company that manages trading, develops technology and innovation in racing, and is also a data company with massive reach and power. In this role, BetMakers devises odds, manages risk, and secures deals with horsemen’s associations and tracks to offer fixed-odds on its cards. The group, through the stellar leadership of CEO Todd Buckingham and SVP for International Operations Dallas Baker, has a fixed-odds management and distribution agreement with Monmouth Park, New Jersey’s only thoroughbred race track, and the New Jersey Thoroughbred Horsemen’s Association.
Fixed-odds horse betting is ramping up in the Garden State, thanks in great part to Dennis Drazin, President of Darby Development, the operator of Monmouth Park’s Track. Mr. Drazin executed a unique first-of-its-kind agreement between the track, The Thoroughbred Horsemen, and BetMakers, starting with exclusively on-track betting. Fixed-odds horse betting launched at Monmouth Park on May 6, 2022, opening day at the track. I had the privilege and honor to place the first bet.
All relevant stakeholders will benefit from this fixed-odds offering: the track, the horsemen, and the betting operators who love the additional content. Bettors’ options also include online fixed-odds betting, with the state’s sportsbook operators now able to take fixed-odds horse bets. The work of Monmouth Bets, the mobile app that launched the offering, will continue to help grow the reach of fixed-odds horse betting.
Expanding to Colorado
New Jersey’s rollout of fixed-odds horse betting serves as a model for the rest of the US. This past March, the Colorado Limited Gaming Control Commission approved a change to the state’s sports betting rules, allowing for an 18-month trial of fixed-odds wagering on horse and greyhound racing. Colorado and New Jersey are currently the only states to allow fixed-odds horse betting as an alternative to the standard pari-mutuel model.
It is also very important to note that fixed odds horse betting will compliment the pari-mutuel tote system. By providing this additional content to the sports betting operators, it helps grow their business. If we can have betting during the global pandemic on Russian table tennis, then introducing thousands to horse races in a weekly offering will surely help everyone in the supply chain.
Galloping Forward
With the introduction of fixed-odds horse betting, the future of horseracing in the US is bright. It is far more consumer-friendly, more in line with responsible gambling standards, and will attract younger punters more familiar with sports betting type wagers, giving the industry a much-needed shot in the arm for the future. Far more states have introduced regulations or legislation to permit fixed-odds horseracing in their respective jurisdictions. As the success of Monmouth Park’s trailblazing entry into fixed-odds horse betting grows, more states will jump in for sure.
Fixed-odds betting represents the most exciting and transformative change to horse racing in the last 50 years. We are witnessing incredible innovation in the sport with Entain’s recent launch of a world-first, virtual reality horseracing experience in the UK. Horseracing continues to grow in popularity, due in large part to the industry’s embrace and promotion of fixed-odds betting.
Perhaps most importantly, bettors around the world are slowly but surely finding themselves with new and exciting means of recreation – and we’re only getting started. I hope that elected officials, regulators, industry leaders and bettors choose to support fixed-odds horse betting in the years to come, as a means of promoting efficiency, profitability, responsible gambling and fun for all involved.
