HBPA Panel on Fixed Odds: Future of Wagering

HOT SPRINGS, Ark.–Dave Basler sees betting on table tennis in Asia and envisions it being replaced with horse racing in America's burgeoning sports books.

“We can fill that void a lot of times during the day so that they don't have to play table tennis from China or cricket from Australia–things that people have no idea about,” Basler, the executive director of the Ohio HBPA, said Thursday during a morning session of the National HBPA Conference at Oaklawn Racing Casino Resort. “That's not just attractive to sports books, that's attractive to horsemen and racetracks for the opportunity to increase our revenue.”

Eric Hamelback, CEO of the National Horsemen's Benevolent & Protective Association, at the 2018 conference cautioned horsemen that sports wagering was coming and the racing industry needed to be prepared. Shortly thereafter, the U.S. Supreme Court struct down the ban on sports wagering. Thirty states now have passed such legislation, including Arkansas.

Now, he says the U.S. racing industry must turn its attention to implementing fixed odds. That's a divergence from the pari-mutuel industry that currently is the linchpin of American horse racing, while sports betting is based on fixed odds that allow players to lock into a price in advance of an event.

“It's here, it's on us,” Hamelback said. “Now we need to really move and pivot and focus on how to deal with it.”

The panel also included Louisiana HBPA executive director Ed Fenasci. Sports betting began in Louisiana last fall, with an online component starting in January. Basler's home state of Ohio is scheduled to start sports wagering Jan. 1, 2023 after passing the enabling legislation in December.

“Pari-mutuel wagering is not going to be in the sports books,” Basler said. “Fixed-odds wagering will be. So we need to take advantage of that ability to bring in customers and get our product in front of millions and millions of potential new fans.”

Fenasci said sports books have the ability to be more creative than pari-mutuel wagering, including with parlay bets.

“Who knows what is going to become the popular wager, right?” he said. “Two grays will win today at the Fair Grounds. This trainer is going to win a race and this jockey will win two races. You can marry a hockey game with the fifth race at the Fair Grounds and marry that to maybe a college football game betting on LSU.

“This is the future of horse-race wagering in the United States. Not this year, five years from now. This model of sports book wagering has competed very well with other forms of gaming. The parimutuel model has been eroding over the last 30 years. It's not standing the test of time when other forms of gaming come in and capture the attention of the customer base.”

Fenasci said the apps for betting online with sports books is “the type of interaction that is going to appeal to 20- and 30-year olds…We want shelf space on these new e-commerce sites. We want horse racing to be there prominently displayed for people who may not have had the opportunity in the past to consume that product.”

Basler said fixed odds could make “an unbettable race now a bettable race.”

“There's a graded-stakes race with six horses and a 3-5 shot in there,” he said. “There's a good chance the bookmaker will take the 3-5 shot out of the pool entirely and price everybody else as if that horse weren't in the race. There are a lot of things that we don't have the ability in parimutuel pools that fixed odds can offer and perhaps enhance our product.”

Former Ladbrokes executive Richard Ames is CEO of British-based Sports Information Services and president of its U.S. subsidiary SIS Content Services Inc., both of which provide content and production services to the betting industry. He said Australian racing went from being overwhelmingly parimutuel to a decade later seeing “probably 55, 60 percent” of wagering through fixed odds.

“We know consumers like the idea if they place a bet at 6-1, that's what they're going to get,” he said.

Panel moderator Michele Fischer, an industry consultant who spent years working for the tote-betting company Sportech Racing and now serves as vice president of SIS' American operation, said some horsemen are surprised to hear that U.S. races already are being distributed in overseas sports books. While the Stronach Group-owned GWS is the largest exporter of U.S. content, she said SIS is the world's largest horse-racing content distributor in the world. It is fairly new to the American market, however.

SIS currently distributes on a 24-hour cycle more than 30,000 horse races and 38,000 greyhound races a year at 118 tracks in 16 countries.

“The sports book wants to have a volume of content,” Ames said. “They want to have access to thousands of races.”

He said there are different models on how racetracks and horsemen are compensated for having their races in sports books, including a fixed fee, revenue-sharing or getting a percentage of betting proceeds.

“Why should we consider this?” Fischer asked rhetorically. “Horse racing had a fabulous year in terms of handle in 2021, the highest it had been since 2009. In some states, we have a false comfort. Purses are very high–you look at Kentucky with HHR (historical horse racing) booming there. It's doing well in Virginia. But when you look at the big picture across the United States, the simple answer is horse racing is not self-sufficient. We're using alternative gaming to support our purses.

“This is an opportunity to become more self-sufficient, because we're betting on horse racing–not betting on a VLT machine or HHR machine.”

   Rees is a horse-racing communications specialist in the horse-racing industry, including working for the National and Kentucky HBPA.

 

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No Penalties in Breeders’ Cup Scratch Fiasco

A four-month investigation into the dysfunction at Del Mar Thoroughbred Club that led to the winner of last year's GI Breeders' Cup Juvenile Turf having to race for purse money only will not result in any complaints being filed against anyone in the chain of command now that “inconsistent radio communication” has been identified as a key contributing factor.

“Various witnesses indicated that they made calls over the radio that were not heard or received by the intended recipients,” stated a California Horse Racing Board (CHRB) summary report issued Thursday that cited findings from supervising investigator Michael Barker. “At some points witnesses resorted to cell phone communication to ensure their messages were relayed.”

The stylish win by Modern Games (Ire) (Dubawi {Ire}) in the Juvenile Turf was overshadowed by the 12-minute fiasco at the starting gate that preceded the running of the race. Modern Games had to compete for purse money only because of a series of miscommunications that involved the Del Mar stewards, the veterinary team at the gate, and the track's mutuels and tote departments.

It was a disconcerting optic to witness on-track patrons letting loose a chorus of boos as Modern Games crossed the finish wire first. But it was apparent that no one at Del Mar that day was deriding the horse, but rather the bewildering series of blunders that led to the colt being removed from the wagering pools, reinstated in the betting, and then finally being deemed good to start while running as a non-betting entity.

The error was costly in terms of lost betting handle, customer ill will, needless confusion, and the erosion of confidence in the officials responsible for overseeing and regulating the Breeders' Cup races at Del Mar.

Yet the CHRB report did not directly address any of those broader issues in its three-page summary of the report.

Here's how the CHRB described what transpired in the Mar. 3 report summary (the timeline does not differ substantially from how the CHRB explained it back on Nov. 6, 2021):

“Albahr (GB) (Dubawi {Ire}) was in the number two stall. Albahr reared up over the starting gate, then fell back on to his side, with his legs caught under the number three stall. During this time, the horse in the number one stall, Modern Games, went through the front gate after the gate was opened by starting gate personnel and was uninjured. The veterinarians on scene initially believed that Modern Games had forced his way through the starting gate, and they made the decision to scratch him.

“When informed by gate personnel that Modern Games did not force the gate doors open, the veterinarians inspected him and advised the stewards that Modern Games was fit to run.

“Concurrently, the stewards were advised of the scratch of both Albahr and Modern Games by the veterinarians. The stewards called the scratch into the tote room and both Modern Games and Albahr were removed from wagering. The stewards were then informed that Modern Games was not injured and was fit to race. The stewards called the tote room to inform them what was occurring and requested that the tote room hold off on the scratch of Modern Games, who has already been removed from the wagering pools.

“Modern Games was then placed back into the pari-mutuel pool. Subsequently, the stewards determined that pursuant to CHRB Rule 1974, Modern Games would be required to run for purse money only. The tote room was then informed of the decision and Modern Games was again removed from the pari-mutuel pool.”

The investigation noted that “the regulatory veterinarians' hurried recommendation to scratch Modern Games could potentially have been avoided if a protocol requiring one person on the veterinary staff and one person in the pari-mutuel department be in charge of scratches had been in place.”

The CHRB report stated that the board “considered the merit of applying CHRB Rule 1697 to the recommended scratch by the regulatory veterinarians.”

That rule reads in its entirety, “After entering the racecourse track for the post, a horse shall only be declared by the stewards when they consider such horse unfit to run in the race. No horse determined to be a starter shall be excused or declared from the race. Any horse which breaks through the gate or runs off without effective control shall be examined by the racing veterinarian and determined to befit to compete before being permitted to start.

But, the report noted, the CHRB didn't apply that rule because: “1) The difficulty of proving a violation given that a condition precedent to a violation of this rule is that a horse actually broke through the gate; and (2) more importantly, animal welfare is of paramount importance in the CHRB's application of rules and creation of protocols.”

So instead of penalties or sanctions, the CHRB report came up with the following recommendations:

1) There is one designated Racing Veterinarian and he or she is the only person who can recommend a scratch to the Stewards and the only person who can communicate a scratch to the Stewards.

2) The tote company and the pari-mutuel department must each designate one person who can effectuate a scratch or purse money only designation by the Stewards. Both must agree before either action can take place.

3) A horse cannot be placed back into the mutuel pools after it has been scratched without approval of all three Stewards.

4) A Pari-mutuel Committee meeting should be held to consider changes to pari-mutuel regulations. Issues that may be considered include but are not limited to: (a) advisability of a purse-money-only designation and (b) requiring ADW companies to follow the example of brick-and-mortar wagering facilities in California by providing bettors with the opportunity to name alternate selections for scratched horses in Pick “n” wagers involving four or more races.

5) Associations, particularly on days when there are large crowds and competing bandwidth, must provide an adequate communication system for racing officials.”

The report stated that, “While the CHRB does not typically release an investigation report, especially when it does not result in a complaint, given the widespread public interest, a summary of the investigation is provided.”

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Sophomore Filly Ain’t Easy Back From Layoff In Sunday’s Santa Ysabel Stakes

Fresh off victory going seven furlongs, Under the Stars will stretch out for the first time as she heads a field of nine sophomore fillies going a mile and one sixteenth in the Grade 3, $100,000 Santa Ysabel Stakes at Santa Anita Park in Arcadia, Calif.

A six furlong maiden winner two starts back at Los Alamitos on Dec. 11, Under the Stars withstood intense pace pressure en route to a three quarter length win in the G2 Santa Ynez Stakes Jan. 8, a race in which she earned a Santa Ysabel-top Beyer Speed Figure of 91.

A Kentucky-bred daughter of Pioneerof the Nile out of the Storm Cat mare Untouched Talent, Under the Stars is trained by Bob Baffert and is owned by Mrs. John Magnier and Michael Tabor. Never worse than third in four sprint starts and favored in three of them, she'll be ridden for the third consecutive time by Flavien Prat.

Idle since romping to a 4 ¾ length tally in the G2 Chandelier Stakes at a mile and one sixteenth Oct. 1, Phil D'Amato's Ain't Easy could be in need of a race but nonetheless looms a formidable entrant with John Velazquez taking over for eastern-based Eclipse Champ Joel Rosario.

A 5 ¼ length first-out winner going 5 ½ furlongs on Aug. 21, Ain't Easy, as expected pressed the early pace in the Chandelier and won with aplomb at 7-2. Owned by Old Bones Racing Stable, LLC, Michael Lombardi and Joey Platts, Ain't Easy has five works on her tab dating back to Jan. 31, her most recent a six furlong move from the gate in 1:14.60 on Feb. 27.

By Into Mischief out of the Australian-bred mare Ameristalia, Ain't Easy earned an 81 Beyer in winning the Chandelier.

Baffert's second entrant Eda, who makes her first start of the year following a half length score in the G1 Starlet Stakes at Los Alamitos on Dec. 4. The even money favorite, Eda forced the pace throughout, relinquished the lead by a half length late and battled back gamely for the victory, her third stakes win and fourth overall from six starts.

By Munnings out of the Lemon Drop Kid mare Show Me, Eda has worked steadily for her return and will be ridden back by Juan Hernandez. Owned by Baoma Corporation, she's been favored in four of her six starts and is the leading money earner in the field with $370,000.

THE GRADE 3 SANTA YSABEL WITH JOCKEYS & WEIGHTS IN POST POSITION ORDER

Race 8 of 9 Approximate post time 4 p.m. PT

  1. Desert Dawn—Umberto Rispoli—120
  2. Ain't Easy—John Velazquez—124
  3. Miss Everything—Drayden Van Dyke—120
  4. Cairo Memories—Mike Smith—124
  5. Micro Share—Jessica Pyfer—120
  6. Fortunata Tensio—Abel Cedillo—120
  7. Eda—Juan Hernandez—124
  8. Classical Romance—Ryan Curatolo—120
  9. Under the Stars—Flavien Prat—120

First post time for a nine-race card on Sunday is at 12:30 p.m. Admission gates open at 10:30 a.m.

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