Pushing today's pari-mutuel wagering experience to sports bettors might turn them off to racing forever.
Significant work has been dedicated to getting North American horse racing content on the platforms of existing and emerging sports betting providers. Racing would bring tens of thousands of wagering events to these platforms. In the absence of fully-evolved legal markets for fixed-odds on racing, the general thought has been that racing must be offered to sports bettors first via pari-mutuel betting using a shared wallet.
This position was espoused by New York Racing Association (NYRA) CEO David O'Rourke in August during the Racing & Gaming Conference at Saratoga and more recently upon the announcement of a content partnership between FanDuel and Churchill Downs.
On the surface, it makes sense.
Distribution of racing to potential mainstream players could skyrocket.
Unfortunately, the present-day pari-mutuel product lacks the qualities that sports bettors have come to expect.
Take it from Jason Scott, now the vice president of trading in America for BetMGM, formerly CEO of Ladbrokes Australia and a massive racing fan. Scott's remarks were included in an interview published last week from Gaming Today.
“We found everywhere else in the world, customers want to understand and know what price they're going to get. In most of the [race] meetings here [in America], the pools are really small. The professional syndicates bet late, and the price that you're getting paid is nothing like (the odds at the time of the wager) because so much money's going in in the last minute.”
Fixed odds betting on racing might not be a magic elixir for the sport, but it would provide a product that otherwise does not exist for mainstream customers and can complement existing pari-mutuel offerings, provided tote betting is modernized.
For the best part of the last century, Americans have been stuck with a pari-mutuel system, one that has morphed over the last two decades into a playground for algorithmic-driven professional betting syndicates. Those wishing to get pari-mutuel racing to a single-wallet platform that reaches sports bettors wrongly assume those customers won't care that a horse they bet at 10-1 when loading goes to 5-1 ten seconds after the start of the race, once all betting is reflected.
That is the everyday reality in North American racing's pari-mutuel landscape.
The professional, robotic wagering groups set the final price and everyone else that bets before them (pretty much all customers) are stuck with it.
As Jason Scott stated plainly, sports bettors know what price they are going to get when they bet. That experience is practically non-existent in U.S. racing today.
Racing needs to acquire and retain new customers. While we might acquire some new customers by vastly increasing distribution through shared-wallet platforms in the ever-growing sports betting world, retaining those customers is a pipe dream if the product they are offered is purely pari-mutuel.
While fixed odds and pari-mutuel betting can easily co-exist, the tote is in massive need of reform to increase its competitiveness. From Delaware Park to Del Mar, big betting syndicates run amok on today's race betting scene. Betting from mainstream (or mass market) horseplayers might be down by as much as 70%, adjusted for inflation, over the last two decades.
The mainstream segment's decline is far steeper than overall handle declines because the computerized, robotic wagering groups filled the gap.
Mass-market sports bettors will not cozy-up to pari-mutuel betting after a few bad experiences with dramatic odds fluctuations. Requiring sportsbooks to offer pari-mutuel first via a shared wallet is akin to serving stale bread.
Racing does not have the luxury to deliver new customers a poor wagering experience. Forcing onto them the modern-day pari-mutuel product will do just that.
Patrick Cummings is the Executive Director of the Thoroughbred Idea Foundation
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