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How to Better Promote Racing…a Q & A with Mattress Mack

Jim McIngvale (Mattress Mack) made history when the Houston Astros won the World Series. He made bets that returned $75 million when they won, the largest win ever in the history of sports betting. The bets were tied into a promotion McIngvale has used many times at his Gallery Furniture Stores in Houston. If he wins the bet, his customers get free mattresses.

He's great at getting publicity for himself and his stores, but never had he seen anything like what happened with this bet, the story of which became a huge hit on social media. In particular, B/R Betting, an arm of Bleacher Report, followed McIngvale from Game 1 of the World Series through the team's victory parade and captured the agony and ecstasy of each moment from someone who had $75 million at stake based on the outcome of a baseball game. Mattress Mack content amassed 75 million video views on B/R Betting, which posted the content on Twitter, Instagram and TikTok. McIngvale figures he got millions of dollars in free publicity out of the B/R Betting posts.

It just goes to show that when it comes to promoting his business and himself, McIngvale has no equal. Because of his bet and the publicity it received, McIngvale became as famous as the Astros star players. So what advice does this master promoter have for horse racing and how can it better promote itself? Those were the questions we had for Mattress Mack.

TDN: In what areas should racing focus its attention when it comes to improving the visibility of the sport?

JM: People love gambling stories. Horse racing needs to do more to play on the gambling aspect because these young kids are fascinated by it. When I went to Philly and got into that famous confrontation with some Phillies fans, which was not my finest hour, everybody up there knew me. They all know me from all the exposure I was getting with places like Bleacher Report. Horse racing needs to have more connection to young people through gambling and find ways where people can win a lot of money. Absolutely, we should promote gambling more. In Philly, everyone knew Mattress Mack and knew about my bet on the Astros. They knew me because they saw me on B/R Betting or the Action Network or whatever. What's better? Horse racing or the lottery? There's no comparison. Horse racing is a much better gambling game and they need to get the word out about that.

TDN: You won $75 million on your Astros bet. There is no way for a person to make that kind of money betting on a horse race, even at the Kentucky Derby. What's your answer to that?

JM: No, you can't make that kind of money betting on racing, but you can make racing a better product for the bettor. Do whatever it takes to get bigger fields and lower the takeout. Figure out a way to get 15- or 20-horse fields like they have in England. You do that and all of a sudden you have a different game, a better game. We see far too many races and stakes that have five-horse fields with big favorites. People don't want to bet on that. Increase the size of the fields and give people a chance to gamble on a good product. That's all people want. People are fascinated with gambling, particularly with sports betting. You've also got to lower the takeout to compete. It's 5% when I make a sports bet. In racing it's four times that.

TDN: What did you think of the decision to retire Flightline (Tapit)?

JM: You have to have superstars. Retiring Flightline. I get it. They had to make the money. But what a shame there wasn't a way to keep him around longer. Football has Tom Brady and a bunch of other high-profile players. Baseball doesn't do a good job promoting its stars, but basketball certainly does. You have to create household names and get people excited about a horse appearing here or there. To me, that's really important. They have to find a way to keep these horses running longer so they have a chance to become household names. The game has to figure out how to keep these horses around as long as they are sound because everyone wants to see a superstar. Pay them an appearance fee. Pay them money to just show up, whether they win or lose. That's one way to get horses to stay around. We need more superstars like Zenyatta, who was still running when she was six. She stuck around and built up a huge fan base.

TDN: What's your opinion of fixed-odds wagering on horse racing?

JM: Going to fixed odds would be would be outstanding. When you bet at 3-1 and the horse goes off at 4-5, that's hard to swallow. I get fixed odds on my Astro bets. Fixed odds are the way to go so that way people know what they are going to get for their money. I think fixed odds would be a great benefit because pari-mutuel betting is too complicated for the average person out there.

TDN: What are some of the problems you see with horse racing as it is now?

JM: No. 1, it has to be more transparent. The optics on horse racing are not good when these guys get slapped on the wrist for these drug positives. That's horrible. You can't have people thinking a horse won because it was drugged. We've also got to do more to keep these horses safe. They've got to improve the technology. Dr. [David] Lambert has this device you can put on the horse and it tells you when it's going to red line and something is going to pop. That needs to be done in workouts and when they race and it needs to be done everywhere. When those horses red line and are about to pop they need to stop on those horses. All that stuff is doable. Dr. Lambert and I are working on what we call the Runhappy Wellness program. We want to get the racetracks to put these monitors on the horses so they can tell when something is going to go wrong. They monitor the baseball players and they monitor football players, so why can't we monitor these horses and make it as transparent as possible? The more transparent the better.

TDN: What are other sports doing right that racing isn't?

JM: Take a look at F1 (Formula 1 racing). F1 came to Austin, where my daughter runs a restaurant for us. They had the biggest two days in their history while F1 was in town. Five years ago, F1 was nothing. I asked a sports marketing friend of mine, how did F1 go from nothing to something, from the bottom of the heap to the top? It all comes down to a deal they did with Netflix. They told the story of F1 on Netflix and look what happened. It has turned into one of the hottest sports in the world. Racing needs to come up with some creative ideas like that. If F1 can do it, why can't horse racing?

TDN: Tell us about your experience with B/R Betting.

JM: It was incredible. Those guys do a great job. The guys from Bleacher Report followed me the whole time during the World Series. We also have our own social media team that runs our sports website, Gallerysports.com. The amount of hits was just incredible. They know how to make this work. You put something on TikTok and it blows up exponentially. It's just unbelievable. People like to see the agony and ecstasy of the big bet. They loved the story.

TDN: Your bet on the Astros was tied into a promotion you do at your stores, where people got mattresses for free if the Astros won the World Series. You had to give away an awful lot of mattresses. Did you come out ahead?

JM: I won $75 million and we sold over $70 million in mattresses. It's the greatest promotion ever. After the Astros beat the Yankees, that Sunday was biggest day we've had in 43 years. The following day, Monday, which was a non-holiday Monday, we did 25% more than that. I had to cut the promotion off because I had reached the max in insurance money, which is what I call my bets. I was filled up to capacity. If I had kept going through the World Series, we would have sold another $40 million worth of mattresses. I got $100 million worth of publicity off this Astros bet. The brand awareness of my business increased tenfold in the last two weeks. When I was on that victory parade with the Astros players going through downtown Houston, people were chanting 'Mattress Mack, Mattress Mack.' There were two million people there. How the else do you achieve something like that?

TDN: Are you optimistic about the future of racing?

JM: Yes, because there is so much opportunity to make things better.

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Racing and Gaming Conference Focus Shifts to Horse Racing’s Future

By Scott Finley

After an opening day of casino and conventional gaming panels, the focus of Wednesday sessions was on developments in racing, including a review of the newly launched Horseracing Integrity and Safety Act and a thoughtful panel on how fixed-odds betting can positively impact the American horseracing industry.

Lisa Lazarus, newly appointed CEO of the Horseracing Integrity and Safety Authority (HISA) spoke of the challenges her organization has faced in launching the initial phase of the Federal Statute that created HISA.

Of the 21 states that host live racing, 17 state racing commissions have signed on and voluntarily registered with HISA, with over 34,000 horses and 28,000 owners on board. Yet there have been federal court cases filed in Texas and Kentucky challenging the constitutionality of the federal statute, and a more recent case in Louisiana seeking a temporary restraining order on the implementation of HISA regulations in that jurisdiction.

All three cases lost in the first round but are being appealed. To date, HISA has incurred over $1.8 million in legal fees fighting these legal challenges, making a considerable dent in the organizations initial $14 million annual budget.

The HISA Board anticipates further legal challenges, but has committed to implementing corrections to many of the issues that have generated complaints from various sectors of the racing industry.

“We still have several transparency issues that need to be addressed, said Lazarus, ” and we will.”

“We are a very young organization created by federal statute,” Lazarus continued, “but we are learning as we go and it will get better.”

Fellow panelist Ed Martin, President and CEO of the Association of Racing Commissioners International (ARCI) commented, “It's been a little messy [with the start-up], but it's gotten much better since Lisa showed up.”

At the heart of the disagreements over HISA, across all facets of the industry, is the process of turning over what has aways been a state regulated industry to a federal agency. However, owners, trainers, racing commissioners and multiple industry bodies are all in agreement that uniformity of regulations is essential for racing to thrive, grow, attract new fans and shed some of the negative images that have arisen over the past decade.

Speaker John Kimmel, a leading trainer and licensed veterinarian commented, “On the surface, two barometers here at Saratoga look good: NYRA stands to handle over $850 million for the meet and the average price of yearlings at the recent sales was over $400,000. But, there are looming problems out there.

“Lack of uniformity in state regulations creates havoc for horsemen that race in multiple jurisdictions. We need uniform medication withdrawal times. We also need to overcome differences in managing enforcement for on-track versus off-track stabled [race] entrants.”

HISA can resolve these multitude of different regulatory matters, but all states must come on board for the process to be effective.

Kimmel also suggested the HISA must do a better job of communicating with industry stakeholders and perhaps could create a marketing and public relations department.

“There are lots of rumors out these and complexly inaccurate statements,” Lazarus agreed. “We want to make racing better through uniformity and stability.”

New York is one of the four state racing commissions yet to come to an agreement to fully embrace HISA. Speaker Rob Williams, Executive Director of the New York State Gaming Commission (NYSGC), explained, “NYSGC has not accepted two of the tasks requested by HISA [registering participants by NY State employees and fully staffing drug testing collection].”

Overall, though, NYSGC has been supportive, providing staff and professional expertise to assist HISA in developing rules and regulations. Williams and Lazarus both anticipate that the differences can be worked out and that NYSGC and HISA will resolve the issues over funding and that New York State will eventually join the fold.

Panel moderator Alan Foremen, Chairman and CEO of Thoroughbred Horsemen's Association, “The road to uniformity is so difficult.”

“We are making even more effort to listen to the industry on the pending anti-doping programs,” Lazarus stated. “We are a young organization created by Federal Statute; learning as we go. It will get better.”

Perhaps most encouraging was the level of respect that all panelists and their respective organizations had for Lazarus' efforts to date. All seemed to reflect that all will improve once the growing pains of HISA are worked out.

Ed Martin concluded, “Once the industry begins to trust HISA, that's the key to getting there.”

“Fixed Odds and the Future of Horseracing” the concluding panel on Wednesday, brought together racing executives, service providers and fixed-odds operators to offer their opinions on the current state of fixed-odds horse betting, but more importantly where and how the racing industry can capitalize on the stratospheric growth of legal sports betting by coupling both pari-mutuel and fixed odds betting to the current sports betting content menus.

Dallas Baker, Head of Business Development for BetMakers US, the operator first to market with fixed-odds betting at Monmouth Park, was adamant. “This is THE MOMENT for racing in the USA. We are at a critical point moment.”

“Just think how Illinois Horsemen felt watching the Arlington Million at Churchill Downs this past weekend!” Baker exclaimed. Baker contended that like in his native Australia, fixed odds betting – primarily on win and place markets only–can revitalize a declining USA racing industry, capture younger bettors and fairly remunerate horsemen for purses, so long as the commercial and tax structures are on a level playing field for all operators and content providers.

Colorado is the only state besides New Jersey to have approved and regulated fixed odds on horse racing. Moderator Dan Hartman, Director of the Colorado Division of Gaming, explained how his agency consulted all segments of the racing industry, especially horsemen, and established a tax and regulatory scheme that returns a fair share to purses at Colorado's racetrack. The fixed-odds law sunsets in 18 months unless renewed by the Colorado Legislature. All stakeholders will be asked to weigh in on the future of fixed odds in Colorado at that point.

David O'Rourke, President and CEO of the New York Racing Association, believes that sports betting is a massive distribution channel for racing. NYRA plans to work with all current sports betting operators on ways in with NYRA pari-mutuel content may be added to current platforms and then see where fixed odds fits in.

NYRA recently concluded partnership deals with Caesars Entertainment and BetMGM to add NYRA horse racing content to those sports betting platforms. Regulatory and banking/funding roadblocks have so far limited the launch to only two states.

Paul Hannon, Senior Vice President Corporate development for PointsBet USA, is also bullish on fixed odds attracting a new audience to racing and building on the growth of online and retail sports betting in 30 states just four years after The Supreme Court overturned the Federal Law {PASPA] prohibiting sports betting in all States except Nevada.

“Racing must reap the benefits of Sports betting's growth,” Hannon said. “I believe that within two years of launch, fixed odds sports betting on racing will become the fifth-most wagered on sport, after NFL, NCAAB football, NBA and NCAA basketball.

“Racing fills a content void, especially this time of year between the end of NBA and the start of NFL when sports betting revenue and interest typically decline.”

Michelle Fischer, Vice President for SiS Content Services, also agrees that fixed odds on horse racing will be a successful product and generate new interest in racing from a younger audience.

“Adding fixed odds racing to existing sports betting platforms will only increase the pie,” Fischer stated.

She agreed with Hannon about the massive potential for racing, essentially a 24-hour per day global sports, nicely filling in the down time between more conventional sports. It has done so in the United Kingdom, Australia and much of Europe. It should be successful in America as well.

“Americans want to bet of American sports and American racing,” Fischer said. “We as an industry must give them the opportunity to do so.

“But we need an open market for content and a fair pricing model [as compared to conventional sports betting] to make this successful.”

O'Rourke summed up NYRA's position on the opportunity for racing to offering fixed odds to reach a newer and younger demographic.

“Racing is essentially an entertainment product, but you cannot lose control of your content.”

Tuesday sessions focused on downstate casino development in New York, with most speakers concluding that two of the three licenses are heavily favored to be warded to Genting Resorts World at Aqueduct and MGM Empire City Casino at Yonkers, both of which are well-established VLT “racino” facilities.

The third, and final downstate license is up for grabs, but unlikely to be situated in Manhattan due to community and business opposition.

At a Tuesday panel on “Sports Betting: What's Next?” speakers reflected on the excessive 51% tax rate in New York on mobile sports betting operators and how that may eventually lead to market decline and further competition. Panelists also echoed many of the same sentiments as expressed at the Wednesday Fixed Odds and the Future of Horse Betting session, as the conclusion of most regulators, including in New Jersey, is that “racing is a sport.”

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Monmouth Targets March Launch For Fixed-Odds Wagering On Racing

Dennis Drazin, the CEO of Monmouth Park in Oceanport, N.J., issued the following open letter to industry stakeholders on Wednesday:

I am excited to update you about the introduction of fixed odds betting on thoroughbred racing in New Jersey, which we now plan to start rolling out in March.

Importantly, I also want to share insights into the commercial model and agreements we have in place with the purpose to maximize the intended success of this new venture.

It is under this model that I believe fixed odds betting can be transformative for the Thoroughbred industry by unlocking new revenue that can flow back to stakeholders and participants and grow the sport we all love.

The go-to-market roll-out of fixed odds betting on racing in New Jersey: Fixed odds bets on Thoroughbred racing meetings are scheduled to be offered on track at Monmouth Park from March 2022. Shortly thereafter, and prior to Monmouth's live racing start on May 7, 2022, fixed odds will be available online thru NJ licensed sportbooks.

Fixed Odds is available now to licensed Sportsbooks thru BetMakers. Thanks to our partners, BetMakers Technology Group, who have assisted us to officially open the door for major Sportsbooks across New Jersey to participate.

BetMakers, under a fixed odds management and distribution agreement with Monmouth and the New Jersey Thoroughbred Horsemen's Association, has a 15-year exclusivity on fixed odds in New Jersey.

In effect, this means that any Sportsbook wanting to offer their New Jersey customers fixed odds bets on win, place and show on approved Thoroughbred racing (in state or out of state) must have an approved agreement in place with BetMakers. This is still subject to Interstate
Horseracing Act (IHA) approvals regarding out of state signals. We have endeavored to ensure that horse racing participants are protected under the IHA through the Fixed Odds Wagering Act (FOWA) and regulations.

BetMakers has minimum guarantees with Monmouth and the NJ horsemen. These payments protect the current revenue streams of the racing industry currently generated by pari-mutuel wagering. This underscores the vital importance for Sportsbooks to have commercial agreements in place with BetMakers before they can offer fixed odds betting, which assists to cover these guarantees.

BetMakers has started the process of engaging with online sports and casino operators with the aim to onboard five Sportsbooks for fixed odds betting in the first half of this year. Once approved, Sportsbooks can bet fixed odds on all relevant racing through online sites and in addition to brick-and-mortar casinos, OTBs and at other track venues.

Our model for fixed odds racing is built on fairness and returns to the industry:

It's time for the Thoroughbred racing industry to share in the fixed odds betting boom that has seen more than $10 billion annually wagered on sports in New Jersey alone.
Up until now, Thoroughbred racing has not been able to offer those sports bettors a similar product in horse racing. Through the model we have developed, and under our agreement with BetMakers, this is set to change.
The model has been developed after much consultation with industry stakeholders and is established through the proper legislative and regulatory channels to ensure both integrity and sustainability and deliver the intended prosperity back to the Thoroughbred industry in New Jersey.

This approach has been taken to protect and reward our industry, and it has taken time to reach a point of rolling out fixed odds betting on racing because we needed to create a sustainable growth strategy benefitting the stakeholders of Thoroughbred racing.

This new incremental revenue I believe will flow from fixed odds betting on horse racing to:

the respective stakeholders who put on the show in a sustainable and equitable way;
offer a competitive betting product alongside other sports offerings, since racing can offer this product every day and night all year long;
bolster all aspects of human and equine welfare through better industry returns.

What does this mean?

A few years ago, after witnessing the incredible success that horse racing had experienced in Australia – and a wagering market in that country that doubled in size thanks to the introduction of fixed odds alongside a Pari-Mutuel tote operation – we sought innovation from a partnership with BetMakers that could attempt to replicate this success.

One of the major factors in pursuing fixed odds betting on Thoroughbred racing in New Jersey was the potential to grow the “eyeballs” on our existing racing product and extend the attraction of racing as a betting option alongside other sports events where fixed odds betting has been hugely popular.

Some of the leading questions that are being asked about this new fixed odds model are answered below.

What is the commercial model for the racing industry?

Sportsbook operators who sign and are approved through our exclusive partnership with BetMakers will pay a fee of 4% of turnover on any bets that are placed on thoroughbred racing within New Jersey .

This fee, collected by BetMakers, will then be distributed in majority to the following participants:

NJTHA – The horsemens group within New Jersey – which can distribute these funds back to participants through purses, which is also then shared with the breeding industry.
Monmouth Park – New Jersey's only Thoroughbred racetrack – which will assist in funding improved track facilities for trainers, jockeys, valets, grooms, hot walkers and improved on-course experiences for patrons and bettors.
Host Track – The track where the race is being conducted, which allows for the expansion into new audiences to drive returns for horsemens groups within other states and territories.

Can you guarantee this will benefit the Horsemens group in New Jersey?

Our deal with BetMakers has certain guarantees associated:

A hold harmless guarantee up to $1mil for any reduction in 'Purses' that are derived from Pari Mutuel betting for the Win, Place, Show markets
A minimum commitment to the 'Purses' of $1mil per year for the next 15 years from the introduction of Fixed Odds wagering

While we expect and are hopeful that Fixed Odds will deliver much higher returns and benefits within New Jersey, these minimum guarantees give us some certainty around the success of rolling out Fixed Odds on Thoroughbreds in the state.

As part of the original agreement and in addition to the above guarantees, BetMakers has also committed to Monmouth Park minimum revenues of $1mil which will allow us to commit to continue to improve facilities at the track for Horsemen and Patrons. We are excited to be unveiling our brand new 'Big Screen TV' in the infield for the first meet this year, that will be substantially bigger than the current display and we believe will bring the excitement of our racing to life.

Does this include In-state and out of state races?

Yes, all races that are bet through a licensed operator (Track, Casino, OTB, Sportsbook) in New Jersey on Thoroughbred races will pay the fee that is distributed to the participants. Out of state tracks will benefit through the 'Host Track fee.'

Are operators required to be licensed to bet fixed odds on racing in New Jersey?

Yes, Sportsbooks, Racetracks, online operators and casinos will need to be licensed and also have an agreement in place with NJTHA and BetMakers as their representative.

How will operators report on their betting handle?

All bets will be required to be recorded in the “betting and reporting engine” that has been developed for New Jersey Thoroughbred Horsemen Association.

Full transparency for regulators and rights holders will be available through the betting and reporting engine.

As a Thoroughbred Rights Holder for fixed odds, can I sell directly to an operator?

No, any rights holders and racetrack must deal directly with NJTHA through its representative BetMakers.

It is important under the model for horse racing in New Jersey that all operators betting on fixed odds within New Jersey are using the NJTHA model for reporting and integrity purposes. This model also assists to ensure the commercial benefits flow back to the industry participants in New Jersey.

Will licensed and approved operators be able to bet fixed odds on Standardbred racing?

No, the agreements are currently only in place under this model for Thoroughbred racing. I expect that standardbred racing executives will be closely monitoring the model.

What is the attraction for Sportsbooks, online operators and Casinos to sign up to fixed odds betting?

In the US, we have all witnessed the hugely successful introduction of fixed odds betting on sports in the United States. All indications are that there will be a similarly positive response from bettors/handicappers to fixed odds betting on horse racing.

The certainty of price setting for the person placing the bet has attracted a new audience of people betting on sport, and we expect this will be the case for horse racing. We believe we can reach a whole new audience – many times bigger than currently exists – through fixed odds.

With our strongly anticipated consumer-led willingness for the fixed odds product, the opportunity for Sportsbooks is to add horse racing alongside sports events to their fixed odds offerings to customers is obvious. Racing will be a new vertical of product for Sportsbook operators to offer their customers – and from a commercial point of view it is a high-frequency product that can deliver good margins.

The case study in Australia is compelling. Since the introduction of fixed odds betting alongside the Pari-Mutuel tote system, the overall racing wagering pie has grown – in fact more than doubled. We believe this can be the case in the US, too, and it will be in the interests of Sportsbooks to offer the racing product, especially if the margins generated by Australian wagering operators are seen in the US.

When will fixed odds betting be available in New Jersey?

Our expected launch date for fixed odds betting in New Jersey is March 2022, starting with on-track only, and then extended to online fixed odds betting ahead of Monmouth Park's new racing season in May 2022.

Does that mean only five licenses for fixed odds betting will be awarded by BetMakers?

No, it is only in the first phase of the online roll-out that licences will be restricted to the first 5 Sportsbooks signed up in New Jersey. After the first 5 have been announced, all other approved wagering operators that wish to offer this bet type to their customers will be able to offer fixed odds betting on Thoroughbred racing in New Jersey if they have agreements and approvals in place through BetMakers.

I suggest that any Sportsbooks interested in securing one of the first 5 licenses to offer fixed odds betting on thoroughbred racing in New Jersey to their customers don't hesitate to contact BetMakers' North American CEO Christian Stuart at christian.stuart@betmakers.com.

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TIF: Fixed Odds Betting For Racing Is A ‘Once-In-A-Generation Opportunity’

Launched in the summer of 2018, the Thoroughbred Idea Foundation (TIF) has sought improved outcomes for American Thoroughbred racing's “voluntary” participants – horse owners and horseplayers. As the sport's primary investment sources, horse owners and horseplayers drive much of racing's value chain – buying/breeding horses to race and betting on those races. Every stakeholder in the sport depends on these two groups participating financially, paying bills and placing bets.

TIF believes that by improving outcomes for those groups, the entire ecosystem of the sport will be improved. TIF published a series of foundational white papers in its first year, outlining a series of ideas that could yield such outcomes. Among them: reduced bet pricing, modernized rules, increased transparency, improved access (and reduced cost) to data used to inform bettors and an introduction of fixed odds betting for racing to complement existing pari-mutuel offerings.

While some industry organizations have spent years focusing on other important issues – notably safety and welfare – the ball has otherwise been dropped as it relates to the sustainability of the sport through wagering.

Many racetrack operators have pivoted into multi-platform technology businesses as wagering has shifted largely from in-person, brick-and-mortar betting to online, mobile and computer-robotic wagering. Relative to racing-related purse generation, this has not benefitted horse owners. In 2020, TIF estimated mainstream horseplayers, those betting less than $1 million annually, reduced their share of total racing wagering by approximately 63 percent from 2003.

The future might be different.

NEW JERSEY AND THE WORLD

In February 2020, Monmouth Park operators Darby Development signed a 10-year deal with Australian firm The BetMakers to manage the fixed odds betting business. In early August, New Jersey Governor Phil Murphy signed a bill which enables such betting on the sport – for live and simulcast races – for the state's customers.

“We feel the support for fixed odds as a solution to facilitate growth in the horse racing industry in the U.S. gaining momentum throughout the industry,” said BetMakers CEO Todd Buckingham after the vote. “We are excited about what this opportunity means for the racing industry in New Jersey and more broadly in the U.S.”

One notable concern often raised about introducing fixed odds to racing is the loss of business from higher revenue-sharing bets in pari-mutuel pools, typically win betting, which shift to the new option where odds are locked-in, but revenue back to purses is often lower.

TIF supported the concept, publishing a white paper on the topic in February 2019, and is excited by the possibilities it brings for the industry.

“The American pari-mutuel monopoly has not been kind to the sport or horsemen in the internet era,” said TIF Executive Director Patrick Cummings.

“Pari-mutuel wagering has been allowed to stagnate – there has been little innovation in the space. Adjusted for inflation since 2000, overall pari-mutuel wagering on racing is down 50% in the U.S., and most of that occurred while racing had a veritable monopoly in online betting. Our customer base has changed, the market has changed, but racing's betting business stagnated. Fixed odds competition should be good for racing, introduce racing to legal sports betting customers across America and offer an additional option for existing customers.”

But BetMakers is not banking on fixed odds for racing in America alone.

The Australian company recently completed the acquisition of the racing, tote and digital assets from Sportech, one of three companies which had provided pari-mutuel betting services to North American racing.

In an interview with SBC Americas, BetMakers chief operating officer Jake Henson outlined the long-term vision for the firm.

“Our mission is to create the world's largest global racing network that rewards all industry stakeholders and provides a sustainable ongoing funding model for the sport,” said Henson.

The first fixed-odds service provider in U.S. racing is also a big pari-mutuel betting player too. The complement of fixed odds betting to existing pari-mutuel offerings is attractive to one of America's biggest operators.

OPTIMISM FROM NYRA, HORSEMEN

David O'Rourke, the New York Racing Association's chief executive officer, glowed about the possibilities of fixed odds bets for racing in his address at the Jockey Club's Round Table in mid-August.

“A marketplace where most sports books offer racing should be our goal. Fixed odds on simpler wagers alongside pari-mutuel exotics is a potential winning combination, offering the new player a familiar entry point while maintaining deep exotic pools for our more experienced players.

“There are a lot of risks, challenges, hesitations, and hurdles to realize a market where fixed odds and ADW offerings come together. But we here at NYRA believe the rollout of sports betting is a once-in-a-generation opportunity.”

Joe Applebaum, president of the New York Thoroughbred Horsemen's Association, embraced fixed odds as “inevitable” a day after O'Rourke at the Racing & Gaming Conference in Saratoga Springs in mid-August.

“Typically, horsemen sit on a panel like this and throw up all sorts of reasons why we shouldn't change and we should stick with pari-mutuel,” Appelbaum said. “But I would say that it's inevitable, maybe in six months or maybe in six years, there will be a mix of bookmaking and pari-mutuel wagering in this country, and in just about any jurisdiction. We should keep our eyes open, and we shouldn't be scared.”

FIXED ODDS ONLY NEW FOR U.S. CUSTOMERS

Cummings notes that American track operators, and a subsidiary of 1/ST (formerly The Stronach Group), have enjoyed revenue from fixed odds betting for years through contracts between tracks, the subsidiary (XB Net) and foreign bookmakers.

“Several European bookmakers have shared with TIF, separately, that total betting on U.S. racing at fixed odds from European customers exceeds 1 billion British pounds annually, the equivalent of nearly 13% of total U.S. pari-mutuel handle. It is beyond time for the American market to expand and offer such bets to American customers on American races.”

Upon the publishing of fixed odds regulations by New Jersey's Division of Gaming Enforcement, followed by the completion of agreements between New Jersey bookmakers, American tracks and their representative horsemen's groups, fixed odds bets can be offered by registered New Jersey betting operators to their customers. Pari-mutuel betting remains unchanged.

The New Jersey Thoroughbred Horsemen's Association (NJTHA) has been at the forefront of sports betting legalization in America. Their suit against the National Collegiate Athletic Association (NCAA) and professional sports leagues, later combined with one from then New Jersey Governor Chris Christie (and assumed by Governor Murphy) paved the way for legal sports betting to be adopted by states.

Through the end of July 2021, more than $17.3 billion has been bet, with over $1.2 billion in revenue to the state, through legal New Jersey bookmakers since June 2018.

When fixed odds bets for racing are first offered for New Jersey customers, the numbers will undoubtedly be small to start. More states are believed to be considering expanding offerings to include racing, but there is no doubt New Jersey is going first…again.

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