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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.

The post Monmouth Targets March Launch For Fixed-Odds Wagering On Racing appeared first on Horse Racing News | Paulick Report.

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New York Senator Introduces Bill To Allow Fixed-Odds Wagering On Racing

With the pending launch of mobile sports betting fast approaching in New York, Sen. Joseph Addabbo (D-Queens), chairman of the Senate Committee on Racing, Gaming, and Wagering, has filed a bill that would allow fixed-odds wagering on horse racing, according to casino.org.

In 2021, as part of the enacted budget, New York State authorized the Gaming Commission to license mobile sports wagering operators. Those
licenses have since been awarded to entities that are going to be tasked with offering gaming opportunities that will lead to the best financial opportunities for the state of New York. As the law is written, a wagerer would not be able to place a fixed odds bet through a mobile sports wagering operator on a horse race.

Senate Bill S7536 would enable mobile sports wagering providers to offer that opportunity, should they so choose, but only if they enter into an agreement with the horse racing content provider. Additionally, this legislation would create additional opportunities for affiliated organizations to offer opportunities to participate in this gaming activity

“It's ridiculous that our New Yorkers can't place a bet on mobile sports betting, and at the same time place a bet at the fifth race in Saratoga or what have you,” Addabbo told Casino.org. “It would be just a natural marriage. It would just be a rational thought, once again, to combine those two.”

The bill will not be considered until the legislative session resumes in January.

“The legislation [Sen. Addabbo] has introduced presents an enormous opportunity for horse racing to share in the benefits of mobile sports betting,” said Patrick McKenna, a spokesman for NYRA. “It would be a big win for New York and for the future of horse racing.”

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.

The post TIF: Fixed Odds Betting For Racing Is A ‘Once-In-A-Generation Opportunity’ appeared first on Horse Racing News | Paulick Report.

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The Week in Review: Sports Betting May Not Be the Enemy After All

Despite COVID shutdowns, a total of $21.52 billion was wagered legally on sports in the U.S. in 2020, about twice what was bet on horse racing, and the gap will be even greater this year and for years to come. Sports betting is growing exponentially and an argument can be made that some of its success is coming at horse racing's expense. It's surely siphoning off dollars that otherwise might be available to racing's pari-mutuel pools and it has to be drawing existing and potential customers away from racing.

Yet, at last week's Racing & Gaming Conference in Saratoga, NYRA CEO and President David O'Rourke made the surprising statement that sports betting represented a “once-in-a-generational opportunity for our sport.”

He may just have a point.

The primary difference between betting on sports and racing is that sports bets are based on fixed odds and racing uses a pari-mutuel system. That's not a problem when it comes to on-track bets or bets made through an ADW. But the pari-mutuel system doesn't work for the bookmakers now taking sports bets legally, most of them online. That's why popular gambling websites such as bet365.com offer bets on every sport imaginable, that is, other than horse racing. There's the four major sports, soccer, golf, tennis, even darts and handball.

If these same online websites were to begin taking bets on racing, O'Rourke said racing would have an unprecedented opportunity to grow its customer base.

“With sports betting you have, literally, every other sport on these platforms,” he said. “To put racing side by side with those sports, we think that is a winning combination. It just opens up our customer base, 10 times, 20 times. It's an incredible opportunity and we look forward to that.”

The first step toward solving the problem is for horse racing to adopt the fixed odds system. That doesn't mean the end of pari-mutuels, which will always be necessary for exotic bets. It does mean creating an alternative pool where the odds are set and they do not change after a gambler has placed their bets. Without fixed odds, racing will never benefit from the growth of sports wagering.

Were there fixed odds bets available for Saturday's GI Alabama S. at Saratoga, a player may have been able to bet on Malathaat (Curlin) to win at odds of, say, minus 180. That means someone would have to wager $180 on her to win $100. Maracuja (Honor Code) would have been something like plus 650.

Fixed odds are what the sports bettor knows. They'll never understand or embrace a system where they might bet on a horse at 8-1 only to see it go down to 6-1 at post time and then plummet to 7-2 in the middle of a race. But the players, looking for action, may very well be happy to make a fixed odds bet on a Belmont or Santa Anita race during halftime of an NFL game or throw a bet on the GI Runhappy Travers S. into a parlay that includes a bet on the Yankees to win and the over-under on a Dodgers-Giants game.

This is why the legalization for fixed odds betting in New Jersey is an important first step. There are a lot of details that remain unclear, particularly when it comes to who will be allowed to offer the bets. We do know that there will be on-track fixed odds betting and it may also be available through TVG's 4njbets.com, the only ADW allowed to take wagers in the state. But bets through those two platforms don't figure to do anything more than shift existing pari-mutuel bets from one pool to another.

It will likely take some time and there are plenty of hurdles to clear, but look for BetMakers, the company hired by Monmouth to operate its fixed odds system, to cut deals with large bookmaking firms like bet365.com, FanDuel and DraftKings.

Dennis Drazin, who heads the management team that runs Monmouth Park and who has been instrumental in pushing through fixed odds bets in New Jersey, sees a future where every conceivable website and betting app will include the option to bet on racing. But he also fears that the sport may shoot itself in the foot. New Jersey has already had an experiment with a form of fixed odds wagering with the Betfair betting exchange. It never caught on and the plug was pulled in September of 2020. One of Betfair's problems was its inability to secure agreements with the top-tier tracks to add their races to its betting menu.

“If not everybody gets on board, that would be bad for racing,” Drazin said. “It will be like exchange wagering, where we were able to get some B signals or C signals but not the A tracks, like NYRA, the Stronach tracks, the Kentucky signals. We need to have those signals. If we are not able to offer the top tracks, I'm not sure how successful this will be. We can't have everybody scared to do this because they think fixed odds wagering will cannibalize the other pools. That's going to be a problem.”

One can only hope that the industry will give fixed odds wagering a chance to make it. This is a sport where betting has been stagnant for years and, when factoring in inflation, has dropped significantly since handle hit its peak in 2003 at $15.1 billion. That's a huge problem. Whether they work or not, it's time to try new things to improve handle on the sport. Can we get the sport bettor to start placing bets on Monmouth, Saratoga, Del Mar? If done right, if embraced by the entire industry and marketed, sports betting could well be the way out of our sport's wagering malaise.

Honoring Secretariat

There is no more GI Secretariat S. at Arlington Park. The name of this year's running was changed to the Bruce D. S., a race that is unlikely to be run again because of the inevitable closing of the Chicago track. That means that the sport no longer has a major race named in honor of the GOAT. That can't be.

My idea is to rename the GI Belmont S. the Secretariat and to do so for the 2023 running, the 50th anniversary of Secretariat's historic 31-length romp in the Belmont. Ok, that's never going to happen, but NYRA should still fill the void and name a race in honor of Secretariat. He was a New York horse and there should be a New York race named for him.

Limiting the list to races he won in New York, the best candidate is the GI Hopeful S. Secretariat won that in 1972, so next year's running is the 50th anniversary of that win. Naming the race after the greatest horse ever to step foot on a New York track would be a fitting honor.

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