Horse betting in the United States has been a parimutuel betting system for the last century. Horseplayers compete amongst themselves while the odds fluctuate as money enters the pool until the race begins.
With fixed odds, bettors lock in a price on a horse when the bet is placed, much like US sports betting. The difference between the two can confuse beginners trying to understand how to bet on traditional horse racing.
In an interview with LSR, BetMakers CEO Jake Henson explained his company is working to expand the online horse betting market in America.
“The growth of sports betting in the US, which is entirely a fixed-odds product, from an education standpoint, has spread like wildfire. It only makes logical sense to present a racing bet in a similar way,” Henson said.
Will fixed odds be future of US horse betting?
Horseplayers in recent years have grown increasingly frustrated with drastic late odds changes caused by computer-assisted wagering teams. These groups of high-dollar bettors can automatically place large bets right before a race begins.
Outdated technology often has parimutuel bettors seeing the final price of their selection after the race has started.
Pat Cummings, executive director of the Thoroughbred Idea Foundation, believes fixed odds would be a more appealing product to modern customers.
“We cannot afford to keep losing market share when the overall wagering ecosystem is thriving outside of horse racing,” Cummings said. “You have to put some faith in the market to present products to customers that fit where they are in their wagering lifespan.”
Resistance to fixed odds horse betting
Colorado and New Jersey are the only states with legalized fixed-odds betting on horse racing. One of the main concerns of horse racing stakeholders around the United States is that fixed odds would reduce the amount of parimutuel handle, which horsemen rely on to fund purses.
Despite being an approved option in the Colorado sports betting catalog, operators currently do not offer fixed odds horse betting. An industry source told LSR a dispute over purse money distribution between Arapahoe Park in Aurora, CO, and the horsemen’s group left operators hesitant to offer fixed odds wagering.
Eric Hamelback, CEO of the National Horsemen’s Benevolent and Protective Association, told LSR he is not opposed to fixed odds but believes there are questions yet to be answered.
“There is increasing popularity in wagering using fixed odds, which would increase the handle,” Hamelback said. “We’re supportive as long as a fair revenue-sharing model is in place.”
Conversations happening in New York
New York Sen. Joseph Addabbo, chair of the Senate Racing, Gaming, and Wagering Committee, introduced fixed odds legislation in January.
The bill, S2343, failed to make it out of committee.
“I do not hear the motivation for [fixed odds],” Sen. Addabbo told LSR last month.”I will always stand at the ready to do something if the industry thinks it is positive, but I have not heard much of an appetite to do this.”
Fixed odds horse betting success overseas
Between 2010 and 2015, Australian racing handle was stagnant, generating between A$8 billion to A$ 12 billion ($5.3 billion to $8 billion USD.) With the growth of mobile betting, Henson said racing now handles A$40 billion ($26.7 billion USD) annually.
Of that total, 75% comes from fixed odds, and 25% is parimutuel.
Henson shared that horse betting accounts for 65% to 70% of all handle in Australia. In the UK, horse betting accounts for 20% to 25% of the overall handle.
“Racing players also bet on sports. The cross-sell from racing to sports players is rock solid in all those markets,” Henson said, adding there is certainly ground to be made up when turning sports bettors into horse bettors.
New Jersey first to offer US fixed odds
Last year, BetMakers offered a retail fixed-odds option exclusively at Monmouth Park. Then, last month it launched its MonmouthBets app, America’s first legal mobile app for fixed odds horse betting.
The app is only available in New Jersey and offers win, place, and show betting at limited tracks. BetMakers is expanding its menu to include exotic and prop bets like head-to-head wagers. Fixed odds horse betting is not available through NJ sports betting operators.
Henson said BetMakers “knew digital was going to be the major focus.”
“You interact with the customer, receive feedback, and work through the journey with them,” he said, describing the initial retail launch.
Fixed odds survey says …
More than a month after launching its MonmouthBets app, BetMakers shared the results of a recent fixed odds survey. Of the 1,500 self-described horseplayers and sports bettors polled, 83% want a fixed-odds horse betting option.
The same survey found two-thirds of US sports betting customers would participate in horse betting if fixed odds were available.
BetMakers did not provide specific handle and registration figures for the app. Henson pointed to noticeable growth in retail fixed odds betting. In May 2023, BetMakers experienced 35% more handle at Monmouth Park with seven live race dates compared to the same month last year with 12 racing days.
BetMakers to reduce staff on ‘path to profitability’
BetMakers will lay off 128 employees by the end of June as it closes out fiscal 2023.
According to a recent press release, the layoffs and reduction of other operating expenses by consolidating certain software offerings are expected to reduce overhead by A$21.5 million in fiscal 2024.
“The changes made aim to provide the business with a clear path to profitability,” Henson said in the release.
BetMakers executives mentioned on quarterly earnings calls last year that a more simplified and efficient operating structure was coming.
