pari-mutuel wagering | Horse Racing Free Tips

Fixed-Odds Wagering Bill Passes in NJ, Expected to Begin Haskell Day

A bill legalizing fixed-odds wagering on horse races was passed unanimously by both houses in New Jersey and will now go to Governor Phil Murphy, who is expected to sign it. Expectations are that fixed odds betting will begin July 17, the day of the GI TVG.com Haskell S. at Monmouth Park.

“We've been pushing hard to get it up and running by the Haskell,” said Dallas Baker, the head of international operations for the Australian firm BetMakers, which will operate the fixed- odds betting. “That's always been our goal. We've got a lot of work to do, which is great. We've ve always been aiming for the Haskell and we're all confident that's when we can begin. It's go time.”

Monmouth Park has been a long-time advocate of fixed-odds wagering, hoping that it can do for U.S. racing what it did in Australia. Once legalized, fixed-odds betting exploded in Australia, leading to a sharp increase in total handle on racing and healthy purse increases.

“Our ultimate goal is to have what happened in Australia over the last 10 years or so and after online betting was deregulated happen here,” Baker said. “In that time, the handle has doubled and purse money doubled as well. That's what we want to see here, too. The opportunity exists in the U.S. to have that happen here and on a quicker time line than 10 years.”

With just 24.6 million residents, $25 billion is wagered annually on racing in Australia, or about $15 billion more than what is bet each year in the U.S.

Fixed-odds betting could also go a long way towards fixing what has become a serious problem for U.S. racing. Because large gamblers using computer programs to make their bets are allowed to bet at the very last second, it is common for odds to plunge on a horse during the running of the race. That, for obvious reasons, leaves a bad taste in the bettors' mouths.

With Monmouth long ago committed to the fixed-odds wagering, BetMakers has been looking to sign up other tracks to add to its betting menu. Baker would not say exactly how many have come on, but said he was pleased by the response.

“We've got quite a few tracks signed up and ready to go. Maybe a dozen,” Baker said. “What the bill allows is it provides the legalities to take fixed-odds bets as long as there are commercial terms in place with the other tracks. Quite a few signed up now and, hopefully, in next few weeks, we will get some more. We will also have a full menu of international racing.”

As of now, only New Jersey residents will be allowed to have fixed-odds accounts, but Baker said it should not take long for other states to come on board.

“We have spoken to a lot of other states and they have shown good interest in it,” he said. “But they were waiting to see the bill passed in New Jersey first. We see the roll out going very similar to what happened with PASPA (the Professional and Amateur Sports Protection Act). The obvious ones to take fixed- odds wagering on horses are the ones that already have sports betting.”

Once fixed-odds betting is widely available, the hope, Baker said, is that sports bettors who are now ignoring horse racing will be enticed to give the horses a try. That a fixed-odds wager closely resembles a typical sports bet is seen as a major selling point.

“The important thing is to zone in on the phenomenon that is sports betting in the U.S.,” he said. “We want to get those punters betting on racing and right now they don't have an easy in when it comes to racing.”

According to playnj.com, the takeout on the fixed-odds betting will be 12.5%, which is considerably lower than the typical takeout on pari-mutuel win wagers.

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Claiming Period to Cash Tickets in NJ Extended

The claiming period for pari-mutuel tickets and vouchers has been extended from six months to 12 months in the state of New Jersey thanks to a bill enacted by the New Jersey State Legislature and signed into law by Governor Phil Murphy May 11. “We appreciate the continued support that Gov. Murphy and our state legislators have shown for horse racing throughout the state,” said Dennis Drazin, Chairman and CEO of Darby Development, LLC, the operators of Monmouth Park. “This legislation provides a much-need grace period for people who were unable to cash winning tickets or vouchers due to the impact of COVID-19.” The legislation stipulates that, “winning outstanding pari-mutuel tickets purchased from the beginning of Sept. 16, 2019 and ending on the date of the end of the Public Health Emergency declared by the Governor in Executive Order No. 103 of 2020 and as extended shall be eligible to be claimed and shall be payable during the period ending one year following the end of the Public Health Emergency.”

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Slight Delay in HHR Bill’s Signage; ‘Extension Facility’ Greenlighted for Kentucky Downs

Kentucky Governor Andy Beshear on Tuesday reaffirmed his vow to sign the historical horse race (HHR) gaming bill that passed both chambers of the state legislature last week, but he explained that a decision by the Senate to adjourn through this week means that the HHR-enabling measure won't become law until the end of the month at the earliest.

Beshear's remarks came via videoconference at the start of the Feb. 16 KHRC meeting. After the governor spoke, commissioners unanimously voted in a series of “emergency” measures contingent on the bill getting signed into law that are designed to keep HHR churning in the interim so the revenue that helps to pay for purses in the state continues to accrue.

The KHRC on Tuesday also gave the preliminary go-ahead for Kentucky Downs to begin the process of planning to open an “extension facility” that will operate HHR gaming and simulcasting, similar to the satellite location that opened 12 miles from Turfway Park under that track's licensure late in 2020.

State regulations allow each licensed racing association to operate an extension betting facility that's located within a 60-mile radius of its track.

Beshear and KHRC chairman Jonathan Rabinowitz spent the opening part of Tuesday's meeting lauding racing industry participants and regulators and thanking long lists of politicians for working toward the passage of SB 120. But it was not until the close of his seven minutes of remarks that Beshear dropped the only newsworthy nugget of his speech.

“It was unfortunate on Thursday that the Senate went ahead and recessed, which meant when [SB 120] passed the House, they couldn't enroll it and send it to my desk,” Beshear said. “They can't do that until they come back into session. With the news [Tuesday] that they're not coming back this week, it looks like it's going to be all the way into next week.

“That's regrettable,” Beshear continued. “I was certainly here in the [capitol] building Thursday night, and I know it's something that we would have all liked to have [had signed into law]. But, we did get the bill through, and my commitment—I'll make it today publicly—I will sign that bill as fast as it reaches my desk.”

The most telling comment from Rabinowitz underscored that in exchange for the legislature's redefining of “pari-mutuel wagering” so it now includes HHR, the tracks will now be under political pressure to cooperate on pending legislation that will raise Kentucky's taxes on HHR.

“I assured the legislators that this commission is committed to holding the [tracks] to their commitment to work constructively to revise and raise the tax structure of HHR,” Rabinowitz said. “Knowing the leaders that made those commitments, there's no doubt in my mind that the [tracks] will fulfill those promises.”

Prior to the unanimous voice vote that ratified the KHRC's conditional approval of the Kentucky Downs request to expand its licensed premises so it can include a to-be-built extension facility, it was revealed that no location for the HHR/simulcast business has been publicly disclosed, and that no firm timetable has been established for its opening.

Marc Guilfoil, the KHRC's executive director, told commissioners that “My understanding is that they've got it down to two, maybe three [locations as of] a month ago. They did not want to disclose those because of competition.”

Guilfoil added that “I think a timeline is very close to being started now that we got SB 120 passed.”

Jennifer Wolsing, the general counsel for the KHRC, said the Kentucky Downs request
came to the commission back on Dec. 4, and she noted that the new facility will not be within a 60-mile radius of another track or 40 miles from an existing simulcast facility.

Beyond the HHR business that made up the bulk of Tuesday's agenda, the KHRC unanimously approved a live racing request by Keeneland Race Course to drop Thursday, April 1, from its upcoming spring meet. This move allows the track to revert to a traditional Friday opening day; the request had the approval of recognized Kentucky horsemen's groups.

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Letter to the Editor: Paul Berube

Bill Finley's report (Week In Review) in the Feb. 9 edition of TDN on NYRA's action to restrict wagering on its Pick 5 and Pick 6 wagers by computer-assisted wagering (CAW) players caught my attention, as does any article written on this form of wagering, which I call computer robotic wagering or bots for short.

My experience with the bots and their very smart and well- capitalized owner managers goes back 20 years or so. Then, as now, my opinion on wagering by the bots is that over the long haul, it is destructive to the pari-mutuel business. Bill makes the good points that the bots are pumping millions upon millions into race track pools and that this handle is coveted by tracks. Left unsaid, however, is the very real fact that wagering done via bots is totally reactive to pool money wagered by all other players, whether you call them normal, regulars, casual fans, squares or dumb money.

When the mathematical formulas used by the bots see an imbalance or value in the pools made by other players, this is when the bots craft and place bets to capture the perceived value. Naturally, the most effective time for these types of wagers to be made is as late as possible before pools close and this is why, on a daily basis, straight wagering odds and probable payoffs frequently drop sharply in the last wagering cycle. It cannot be overstated that the daily action of the bots is totally dependent on the other money coming from all other players. If these players wager less for whatever reason, the bots will also reduce proportionately . The life blood of the bots is other peoples' money and the only growth in bots wagering comes from this money.

Earlier I labeled bots wagering as destructive to pari-mutuel wagering. When the bots win their wagers, the normal or regular players experience reduced payoffs which over time means less money in their pockets and less money to churn. When bots win, that normal churn factor is lost, because again, the bots only wager in proportion to the “other” money in the pools. When they hit in the big Pick 5/6 pools, their winnings or profits likely go into lifestyle purchases or other investments and thus lost for good insofar as pari-mutuel betting.

In the short term, the liquidity provided by bots wagering is enticing to race tracks, but in the long term–and racing today is squarely in the long term–the smaller payouts to other bettors, the tremendous money shift or negative settlements from host tracks and off-track wagering venues to the locations that host the bots means that an untold amount of churn has been and continues to be lost. I would offer that this is a major reason why annual pari-mutuel handle totals in the U.S. have not seen any real growth over these many years.

Finley also referred to the payment of rebates to the computer teams or players. The de facto increase in takeout to all other bettors and inherent unfairness to them is a whole other story that is worthy of further analysis.

So where does racing as a whole go from here? For sure it was easier to accept bots wagering into our pools than it will ever be to effectively control or eliminate it. But at some point in the future, racing operators will be forced to confront this reality. For racing to expend effort to create new fans and bettors is indeed a worthy venture especially for the bots who always need fresh money in their business model.

Paul W. Berube, Retired President , Thoroughbred Racing Protective Bureau

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