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Oklahoma Commission Accepts Jackpot Bet Rule Change

The Oklahoma Horse Racing Commission (OHRC), in its January meeting, accepted an amendment to its rules of racing which will now increase protection of horseplayers placing jackpot-style bets. The action came following months of advocacy from the Thoroughbred Idea Foundation (TIF).

TIF became involved on behalf of horseplayer Jeffrey Arthur whose case was outlined in detail in a publication on April 16, 2020.

Arthur held the only ticket with the winning combination for a jackpot pick six wager on a sequence at Remington Park but was denied the payout as it was deemed a dead heat created two tickets and was not a unique wager, disqualifying him from the $35,145 jackpot.

Arthur's bet included both horses in the dead heat in a single wager entered via his ADW account, but in conversations with TIF and Arthur's attorney, Maggi Moss, Remington officials asserted the unusual outcome created two separate tickets and that they were justified in paying only two consolations totaling $8.920.80. That amount was the entirety of the net consolation pool that evening, which proved Arthur held the only ticket with all six winners.

“We are incredibly pleased with the outcome that the Oklahoma Horse Racing Commission has accepted a change to its rules which will ensure all horseplayers are treated fairly and that no one will have to face the situation Mr. Arthur endured,” said Patrick Cummings, TIF's Executive Director.

“Horseplayers are the backbone of our industry. Wagering from horseplayers is directly responsible for a significant portion of prize money which is shared by thousands of owners, trainers and jockeys, and will be needed more than ever as many jurisdictions face budgetary pressures and growing threats to decouple casino revenue sharing from purse accounts.”

Pending final adoption which is expected through the Oklahoma legislature and Governor, the OHRC has now clearly defined “unique wager,” utilizing a definition which is commonplace across other American jurisdictions but which was not within the state's rules previously.

Upon full implementation, a customer whose ticket, entered at the minimum bet amount, is the only to select all winners with a “Pick N” jackpot bet, where “n” equals the number of races in the sequence, is entitled to the jackpot even if multiple winning combinations are created from the original ticket as the result of several scenarios. Those include: a late scratch being replaced by a post-time favorite, a dead-heat, or in cases where a race has been subject to a surface switch after the start of the sequence.

“TIF petitioned the Commission last summer and presented our proposal to their Rules Committee. What we thought was going to be fairly straightforward, as the definition of 'unique wager' is quite clear across many other jurisdictions, was anything but. Remington offered the OHRC Rules Committee a competing request which would have memorialized the situation which caused Mr. Arthur's original problem. The Committee saw the issue with great clarity and the impact to customers.”

“While TIF believes jackpot bets are wagers which should generally be avoided as they carry bloated daily effective takeout to the detriment of horseplayers, and greatly limit wagering churn to the detriment of horsemen, we are most pleased with the outcome and the protection this update provides horseplayers.”

The addition of “unique wager” to the rules was part of the OHRC's annual rules amendment process. Many other amendments were made as part of the review.

The post Oklahoma Commission Accepts Jackpot Bet Rule Change appeared first on Horse Racing News | Paulick Report.

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TIF: How Will Racing Pay for HISA? Grow the Business!

by Thoroughbred Idea Foundation

The creation of the Horseracing Integrity and Safety Authority (HISA) is the most significant development in American racing at the federal level since the passage of the Interstate Horseracing Act in 1978.

Questions now being rightly considered include how much HISA will cost and where will its funding originate from. Below, we offer some perspective on the costs. But as the greater industry determines where the funding will come from over time, racing should proactively adopt policies which seek to grow the wagering business.

The industry already has a plethora of obligations–aftercare, backstretch programs, integrity matters, jockey health and equine research, not to mention purses, the main driver for investment from owners. HISA adds to these. The best way for horse racing to afford all of its obligations is to grow the business.

Racing’s wagering business needs to evolve–appropriate pricing of bets, improving access and reducing costs to accurate data, complementing pari-mutuel betting with fixed odds options, modernizing existing bet processing and infrastructure, all while increasing transparency to the public in many areas. Increasing costs to our already fragile wagering markets, or to a declining base of horse owners, without these needed improvements is a recipe for disaster.

Any step where costs to betting are increased to help pay for HISA programs will hurt the greater racing business.

Projecting Costs

There is every reason to expect that a new level of federal bureaucracy functioning on top of individual state commissions will be expensive.

As it relates to testing, these expenses are fairly clear. For example, if the per-race spending on testing alone from the more than 5,000 races across all breeds overseen by the California Horse Racing Board were extrapolated across the entirety of U.S. Thoroughbred racing, nationwide testing alone would run approximately $20 million annually at current standards.

This is a cost already borne by individual commissions.

Factoring in improvements and upgraded requirements, it should be understood that the $20 million–just for testing–merely represents a starting point.

Administratively, what it will cost to start a federal authority from scratch is more challenging to envision. The HISA creates a layer of federal bureaucracy where one never previously existed. This isn’t necessarily good or bad, it is a reality in development with little insight on costs to this point.

HISA requires the registration of all “covered persons”–an umbrella term which, according to the language of the bill, includes “all trainers, owners, breeders, jockeys, racetracks, veterinarians, persons (legal and natural) licensed by a State racing commission and the agents, assigns, and employees of such persons and other horse support personnel who are engaged in the care, training, or racing of covered horses [basically, all active Thoroughbreds].”

Most are already licensed by existing commissions, but some are not. Will that information be shared or require completely new registrations? The exact administrative requirements are (understandably) unknown to this point, but all of this will come with costs.

The United States Anti-Doping Agency (USADA), which will assist in the development of HISA, serves as a potential reference point to understand the possible administrative expenses.

According to its annual report, USADA conducted more than 14,000 tests in 2019 across various groups which include America’s Olympic and Paralympic athletes, services to the UFC or contracted services for other events, such as the Boston and New York City Marathons. Off a base of just 30,000 Thoroughbred races, down from 36,000 run in 2019, it is reasonable to expect the number of annual tests in U.S. Thoroughbred racing would be no less than five times larger than those conducted by USADA, and very likely more.

USADA’s testing costs in 2019 ran more than $13.5 million, but non-testing expenses, which includes results management, science, research and development and drug reference, education and awareness, as well as general and administrative expenses totaled an additional $9.3 million.

It would be reasonable to estimate that HISA’s costs would be similar, if not more, given a substantially increased number of tests, across a far larger base of competitors and events (races) requiring tests.

Whatever the exact costs, it will be more than in pre-HISA times.

Grow the Business

The best chance racing has of covering HISA costs is if racing finds a way to actually grow the business, turning around two decades of decline.

Grow the business. Grow the business. Grow the business.

State commissions are, for the most part, funded through fees assessed to, or withheld from, the sport’s participants. Receiving a portion of the hold from wagering takeout is one source of funding, licensing fees and starter fees are another. Some receive funding through a share of alternative gaming revenue too.

If wagering on racing continues to decline, recalling that it has dropped roughly 50% adjusted for inflation over nearly the last two decades, the ability to pay for HISA and plenty of other programs required of the industry–aftercare initiatives, jockey health, equine research, among others–would grow increasingly difficult. Takeout hikes would be a completely counterproductive measure to pay for HISA as betting churn would decline.

The path to a brighter future, where the industry’s liabilities can be covered, is wagering growth.

More wagering on racing yields a more sustainable business for all stakeholders. But yet, many of the decisions made by racing operators over the last two decades have been in opposition to growing wagering on racing. This has to change.

Whether it is the continuation of churn-killing jackpot bets, high takeout rates, an aversion from many to exploring fixed-odds options, or continuing to operate antiquated pari-mutuel bet-processing systems without modernization–these and other actions have greatly limited racing’s growth, all as the sport’s liabilities increase and its social license to operate becomes tougher to retain.

As racing and humanity emerge from a troubling calendar year, make no mistake that 2020 was a year of tremendous growth in legal sports betting. Those states doing the best with sports betting are those which have embraced online betting and competitive markets. While the overall environment for betting has never been stronger, racing’s wagering product remains stagnant.

If racing wants to succeed, and cover its growing liabilities which now include HISA, it must undertake measures to radically improve–and grow–the wagering business.

The post TIF: How Will Racing Pay for HISA? Grow the Business! appeared first on TDN | Thoroughbred Daily News | Horse Racing News, Results and Video | Thoroughbred Breeding and Auctions.

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Thoroughbred Idea Foundation: ‘Racing’s Wagering Business Needs To Evolve’ To Afford HISA

Questions now being rightly considered include how much HISA will cost and from where will its funding originate. Below, the Thoroughbred Idea Foundation offers some perspective on the costs. But as the greater industry determines from where the funding will come over time, racing should proactively adopt policies which seek to grow the wagering business.

The industry already has a plethora of obligations – aftercare, backstretch programs, integrity matters, jockey health and equine research, not to mention purses, the main driver for investment from owners. HISA adds to these. The best way for horse racing to afford all of its obligations is to grow the business.

Racing's wagering business needs to evolve – appropriate pricing of bets, improving access and reducing costs to accurate data, complementing pari-mutuel betting with fixed odds options, modernizing existing bet processing and infrastructure, all while increasing transparency to the public in many areas. Increasing costs to our already fragile wagering markets, or to a declining base of horse owners, without these needed improvements is a recipe for disaster.

Any step where costs to betting are increased to help pay for HISA programs will hurt the greater racing business.

PROJECTING COSTS

There is every reason to expect that a new level of federal bureaucracy functioning on top of individual state commissions will be expensive.

This is a cost already borne by individual commissions.

Factoring improvements and upgraded requirements it should be understood that the $20 million – just for testing – merely represents a starting point.

Administratively, what it will cost to start a federal authority from scratch is more challenging to envision. The HISA creates a layer of federal bureaucracy where one never previously existed. This isn't necessarily good or bad, it is a reality in development with little insight on costs to this point.

HISA requires the registration of all “covered persons” – an umbrella term which, according to the language of the bill, includes “all trainers, owners, breeders, jockeys, racetracks, veterinarians, persons (legal and natural) licensed by a State racing commission and the agents, assigns, and employees of such persons and other horse support personnel who are engaged in the care, training, or racing of covered horses [basically, all active Thoroughbreds].”

The United States Anti-Doping Agency (USADA), which will assist in the development of HISA, serves as a potential reference point to understand the possible administrative expenses.

According to its annual report, USADA conducted more than 14,000 tests in 2019 across various groups which include America's Olympic and Paralympic athletes, services to the UFC or contracted services for other events, such as the Boston and New York City Marathons. Off a base of just 30,000 Thoroughbred races, down from 36,000 run in 2019, it is reasonable to expect the number of annual tests in U.S. Thoroughbred racing would be no less than five times larger than those conducted by USADA, and very likely more.

USADA's testing costs in 2019 ran more than $13.5 million, but non-testing expenses, which includes results management, science, research and development and drug reference, education and awareness, as well as general and administrative expenses totaled an additional $9.3 million.

It would be reasonable to estimate that HISA's costs would be similar, if not more given a substantially increased number of tests, across a far larger base of competitors and events (races) requiring tests.

Whatever the exact costs, it will be more than pre-HISA times.

GROW THE BUSINESS

The best chance racing has of covering HISA costs is if racing finds a way to actually grow the business, turning around two decades of decline.

Grow the business. Grow the business. Grow the business.

State commissions are, for the most part, funded through fees assessed to, or withheld from, the sport's participants. Receiving a portion of the hold from wagering takeout is one source of funding, licensing fees and starter fees are another. Some receive funding through a share of alternative gaming revenue too.

If wagering on racing continues to decline, recalling that it has dropped roughly 50% adjusted for inflation over nearly the last two decades, the ability to pay for HISA and plenty of other programs required of the industry – aftercare initiatives, jockey health, equine research, among others – would grow increasingly difficult. Takeout hikes would be a completely counterproductive measure to pay for HISA as betting churn would decline.

The path to a brighter future, where the industry's liabilities can be covered, is wagering growth.

Whether it is the continuation of churn-killing jackpot bets, high takeout rates, an aversion from many to exploring fixed-odds options, or continuing to operate antiquated pari-mutuel bet-processing systems without modernization – these and other actions have greatly limited racing's growth all as the sport's liabilities increase and its social license to operate becomes tougher to retain.

If racing wants to succeed, and cover its growing liabilities which now includes HISA, it must undertake measures to radically improve – and grow – the wagering business.

The post Thoroughbred Idea Foundation: ‘Racing’s Wagering Business Needs To Evolve’ To Afford HISA appeared first on Horse Racing News | Paulick Report.

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Thoroughbred Idea Foundation Raises Jackpot Bet Concerns To Ohio Commission

Speaking during the public comment period of Wednesday's Ohio State Racing Commission (OSRC) meeting, Thoroughbred Idea Foundation (TIF) Executive Director Patrick Cummings raised concerns regarding changes to the provisions of the jackpot pick six wager at the state's Mahoning Valley Race Course.

“Seemingly without public notice, Mahoning Valley has flipped the terms of the jackpot pick six from where it was in March to where it is through its current meet,” Cummings said after the meeting, “and we wanted to ensure the Commission was made aware through the proper channels as it seems the Ohio Racing Rules require, and to investigate the measures the track took to make the public aware of the change.”

When racing closed for the season at the eastern Ohio track, the jackpot pick six wager had a 20 percent takeout with 30 percent of the daily pool withheld if there was no single ticket winner – yielding an effective daily hold of 44 percent. A total of 70 percent of the net pool was paid to the multiple winners on a given day should no single ticket winner exist.

A carryover of $2,620 was held from the end of the meet in March and offered, per Ohio rules, at the start of the next meet, which opened on Oct. 23. Written approval is required to change elements of the bet.

“The difference is that while the actual takeout remained the same, at 20 percent, the track has changed the daily withholding for the carryover to 70 percent, which is what they had been paying out back in March. Combining this takeout and withholding rate yields an effective daily hold of an astounding 76 percent, which we believe to be the highest such rate in North America for this bet type in Thoroughbred racing.”

“This is not a category where Ohio wants to be at the top of the pack,” Cummings told the Commission.

TIF has been critical of racing operators for allowing jackpot bets to proliferate across racing in the last decade.

“Jackpot bets are the opposite of what racing needs,” Cummings added after the meeting.

“These bets limit customer churn, which limits the opportunity for horsemen to earn purses from racing wagering. It defies all conventional logic to offer jackpot bets and limit the opportunity to grow wagering on racing, a metric in our business which has declined by nearly 50 percent when adjusted for inflation over the last 20 years,” added Cummings.

“Some tracks have paid greater attention to this in recent times, either eliminating jackpot bets or offering them on far more favorable terms.”

On a very positive note, several tracks have recently removed jackpot provisions from some wager types, while others carry more favorable terms on returning a large chunk of daily wagering which limits the daily hold.

Fair Grounds removed the jackpot provision from its pick five pools when its 2020-21 season launched in November, while Century Mile in Alberta abandoned the jackpot provision in its super high five midway through its 2020 meet. Today's card at Fair Grounds features a $27,704 carryover on its late pick five, paid to any number of winning tickets with all five winners.

Churchill Downs, whose “Single 6” bet pays 90 percent of the daily pool with just a 15 percent takeout, yielding an effective daily hold of just 23.5%, is among the most player – and horsemen – friendly jackpot wagers given the substantial daily payout provision.

Scott Borgemenke, Chairman of the OSRC, indicated his appreciation that the topic was raised and that, at least to his knowledge, the remarks from the TIF included new information to him. Chairman Borgemenke requested a copy of the remarks for review so that the issue could be examined further.

The entirety of the Cummings remarks to the OSRC are printed below:

Thank you, Chairman, for the opportunity to offer a public comment on behalf of the Thoroughbred Idea Foundation once again.

I wanted to raise your attention to a situation at Mahoning Valley as it relates to that track's jackpot pick six wager.

When the Mahoning Valley season concluded in March, it was operating a jackpot pick six bet type with a 20% takeout. When no single ticket winner existed for a particular day, 30% of the net pool (after takeout) goes to the carryover jackpot with 70% of the net pool paid to all winning tickets with the highest number of winners that day.

This sort of division yielded a daily, “effective takeout” of 44%, meaning that if there was no single ticket winner, 44% of the daily amount bet was withheld, combining the takeout and the carryover.

Obviously, a 44% effective takeout is quite high, but in the nationwide landscape of jackpot bets, falls in about the mid-range of pricing for such a bet.

When racing resumed at Mahoning Valley in October, and without seemingly any public notice to the change, the terms of the jackpot withholding were altered. While takeout remained at 20%, if there was no single ticket winner, Mahoning Valley transferred 70% of the net pool to the jackpot and paid 30% of the net pool to the multiple ticketholders with the most winners that day.

So, the numbers were flipped – in March, 70% of the daily pool was paid and 30% withheld. In October, and every race day since with a carryover, 70% of the net pool is withheld and 30% paid.

This is troubling for a few reasons, but most notably, the impact to the bet's daily effective takeout has changed substantially with this adjustment, going from being in middle of the pack at 44% in March, to where it is now, with a daily effective takeout of an astounding 76%.

The Mahoning Valley Jackpot Pick Six now has, to our knowledge, the highest daily effective takeout on ANY bet offered to Thoroughbred horse racing customers in North America.

This is not a category where Ohio wants to be at the top of the pack.

For some comparison, in recent months, the daily, effective takeout from others with similar bets types include Churchill at 23.5%, Charles Town at 34%, Aqueduct at 40%, Laurel at 52%, Indiana at 60.75% and the California Fairs at 70%.

Turning horse racing wagering into lottery-type bets is bad for horse racing. Sustainable wagering from horse racing emanates from supporting high churn bets, not lottery-type bets such as this. Racing benefits from continued customer wagering – but on days when the bet is not hit by a single ticket (which has been 25 of 27 race days to date this meet), 76% of the daily pool is withheld.

So besides offering this comment, we wished to submit two items for your consideration upon further examination – has Mahoning Valley received written permission by the Commission to make this change, and why was it not better communicated to the public?

There was a carryover when racing stopped in March – a total of $2,620 – that money was available in a revised Jackpot Pick 6 bet with these new withholding terms when racing there resumed in October.

By changing the terms of the jackpot withholding – from 30% in March to 70% in October and every day since, there has been a substantive change in the wager, which based on a reading of the Ohio Racing Rules, specifically, Chapter 3769-3-40-J-2, should have required written approval.

It's entirely possible this was received.

Less understandable, however, is the lack of transparency regarding the change.

So, while we are unarguably against the proliferation of these bets, especially ones which carry an outrageous daily effective takeout, almost no communication about the change from Mahoning Valley is a poor experience for customers.

We would greatly appreciate the Commission's attention to this matter.

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