Why Horse Betting Market Was ‘Worse Than It Looks’ In 2023

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Horse betting navigated a challenging 2023, a year in which overall handle declined, popular events floundered, and high-dollar computer wagering pushed more horseplayers away from the game.

According to Equibase, total horse betting for the year was $11.66 billion, down 3.7% compared to 2022

While that might not seem dire, horse racing experts believe there is more behind the industry’s struggles than simply comparing betting dollars from one year to the next.

What is behind horse betting decline?

Part of the horse betting decline can be attributed to fewer betting opportunities, with 1,700 fewer races in 2023 compared to the previous year.

Another explanation could be the rapid growth of US sports betting.

Nationwide sports betting handle year-to-date is already over $100 billion, with several big markets still yet to report year-end figures.

Horse betting vs. sports betting

As sports betting expanded post-PASPA, horse betting remained flat. Outside of the COVID-19 pandemic when racetracks temporarily shut down, racing handle increased from 2018 levels.

However, Pat Cummings, executive director of the newly created National Thoroughbred Alliance, believes horse betting handle is down 50% when adjusted for inflation.

“If we wanted to compare what we were doing in terms of handle 20 years ago versus where we are last year or this year, you need to double where those figures were. We’d need to be doing about $25 billion in today’s dollars. It is substantially worse than it looks,” Cummings said.

YearHorse betting handleSports betting handle
2023*$11.66 billion$100 billion
2022$12.11 billion$93.72 billion
2021$12.22 billion$57.76 billion
2020$10.93 billion$21.61 billion
2019$11.01 billion$13.14 billion
2018$11.27 billion$4.62 billion

Marquee events see 2023 declines

While there is racing somewhere in the US most days out of the year, the marquee events that draw betting dollars from casual race fans are sprinkled throughout the year. 

In early November, horseplayers bet $176.3 million over the two-day Breeders’ Cup World Championships, racing’s last big event each year. Breeders’ Cup handle was down 7% compared to last year.

Breeders’ Cup race order cut into handle

The Breeders’ Cup Classic, the event’s most valuable and traditionally final race, was moved to the middle of the card this year because of NBC Sports‘ commitment to broadcast college football.

Johnny Avello, director of race & sportsbook operations at DraftKings, told LSR there was a drop in players on the DK Horse app once national TV coverage ended.

“At that point, some users stopped playing as much as they were. That is something the industry probably needs to look at. For racing itself, I’m not sure that worked,” he said.

Preakness, Saratoga see handle dip

Preakness Stakes betting also dipped in 2023, reaching its lowest level in three years. Summer handle dropped 9% at Saratoga, too.

Horseplayers wagered nearly $800 million on Saratoga races between mid-July and Labor Day, down from $878.2 million in 2022.

Horse deaths and record-high rainfall plagued racing at Saratoga this summer.

How high-dollar horse betting hits fans

Computer-assisted wagering (CAW) is another aspect contributing to the current state of horse betting handle.

CAWs are high-dollar bettors who can automatically place large bets right before a race begins. Cummings believes their handle has increased significantly in recent years.

“In the early 2000s, about 8% of total betting came from computers,” Cummings said. “If we assume a third of betting is computers, you realize CAW play is up 150%, and dollars (from regular players) are down 70%.”

Outdated technology often has parimutuel bettors seeing the final price of their selection after the race has started. Horseplayers have grown increasingly frustrated with drastic late odds changes caused by these groups.

Horse betting bright spots in 2023

There were a few bright spots for horse betting in 2023:

Horseshoe Indianapolis had a successful year as well. It increased its handle by 45% through its first 50 days of live racing in 2023 and carried that momentum throughout the year.

Sportsbooks push horse betting tech

There were some technological advancements in the racing industry in 2023. However, they came from sportsbooks.

DraftKings unveiled its DK Horse app ahead of the Kentucky Derby, and PointsBet did the same with PointsBet Racing.

The Kentucky Derby was also the first opportunity for FanDuel to showcase its shared wallet technology around a marquee event.

What is shared wallet technology?

Shared wallet technology, which FanDuel launched at the end of 2022, allows customers to use a single deposit across FanDuel’s horse racing, sports betting, and online casino offerings.

“Racing handle has been soft after a few strong years,” Andrew Moore, general manager of FanDuel Racing, recently told LSR. “This was our first year with racing integrated into the FanDuel Sportsbook. We saw (positive signs) with sportsbook customers betting on racing.”

Moore added that for FanDuel Racing, the lower racing handle was more pronounced in states without legal sports betting.

More shared wallet tech in 2024?

Moore said FanDuel views shared wallet as a critical differentiator. He credits the technology for a more than 20% increase in Triple Crown betting handle year-over-year.

DraftKings and DK Horse hope to roll out a shared wallet offering in 2024.

“We are working on it,” Avello said when asked about a possible timeframe for its release. “It is very important to us and our customer base.”

Building trust, improving product 

Horseplayers have long been critical of outdated technology within the racing industry, especially its tote system, which gathers money in various wagering pools.

In November, some FanDuel Racing customers noticed a glitch in the app, allowing them to place massive wagers without the cost of the bet being properly debited from their accounts.

“The trust of our customers is very important to us,” Moore said. “When something like that happens, my main priority is to make sure nothing like that can ever happen again and also work with regulators so they can understand what the issue was, how it happened, and how it’s not going to happen again.”

Horse betting outlook in 2024

Fixed odds horse betting is expected to go live in Colorado in 2024. A state rule requiring multiple levels of industry support is expected to take effect in January with the necessary backing.

It is unclear which Colorado sportsbooks will offer it. DraftKings, FanDuel, and Sporttrade all told LSR it would not be them, at least initially.

Elsewhere, Sen. Joe Addabbo and Assemblyman Gary Pretlow recently introduced legislation in New York to legalize fixed odds horse betting. Similar fixed odds bills in New York failed to gain legislative momentum in recent years.

Sportsbooks with fixed odds interest

FanDuel and DraftKings in recent months signaled their interest in fixed odds horse betting.

“In the industry, many things have been the same for many years. Is there new blood in the game? There are some, but there are ways to bring more (players) into the fold. We are very optimistic,” Avello said.

It remains to be seen if aligning horse betting closer to sports betting, with fixed markets and prop-style wagering, will help increase racing handle.