A contract dispute between two premier horse betting entities that prevented horseplayers nationwide from wagering on New York racing through any of FanDuel‘s applications came to an end Thursday.
The New York Racing Association (NYRA) first announced the contractual impasse with FanDuel last Thursday. With New York’s popular summer racing season set to begin this week, NYRA content was not available on the FanDuel Sportsbook, FanDuel Racing app, or TVG horse betting app.
“NYRA’s mission is to conduct world-class racing for the benefit of the state’s economy while growing the sport and creating opportunities for horsemen and breeders to compete for robust purses throughout the year,” Patrick McKenna, NYRA’s vice president of communications told LSR on Monday. “That is why [New York horse racing entities] are unified in seeking fair compensation for the racing content we provide to [advance-deposit wagering operators].”
Horse betting content deals
Typically, a racetrack operator, in this case NYRA, receives a host fee in exchange for allowing an ADW, like FanDuel, to carry that track’s content.
A source market fee is often included and gets returned to the state racing industry where the bettor made the wager and helps support purses and breeding. The sticking point between NYRA and FanDuel is over an additional percentage of handle NYRA wants from bets made by New York State residents.
“NYRA agreements have traditionally been host-fee agreements for content only, but recently they also want a share of New York residents’ play from us regardless of what content those residents bet on,” Andrew Moore, general manager of FanDuel Racing, told LSR via email Tuesday. “They’ve basically said that if we don’t pay that, then we don’t get access to NYRA content.”
Horseplayers in New York, and elsewhere, can still bet on NYRA races on various other ADW platforms.
ADW fees are common
Content deals often include other payments in addition to the host and source market fees. For example, there are also statutory tax payments but those vary by state.
In New York, it is 5%, which Moore argues FanDuel already pays to the tune of about $18 million per year. That means New York residents bet roughly $360 million per year on horse racing via FanDuel.
“NYRA management has told us that they don’t feel they get a fair cut of that tax, and I don’t disagree,” Moore said. “But the state handles that distribution, not us.
“We have already been paying NYRA an additional percentage of New York residents’ play, but they want to increase that, and that’s the crux of the impasse.”
New York horse betting dips without FanDuel
NYRA pulled its horse betting content from FanDuel on July 4. The holiday weekend is popular for New York racing and closed out its Belmont at Aqueduct season.
According to data compiled by Horse Racing Nation, NYRA’s handle dropped more than 50% during the week ending July 7 compared to the same week last year. NYRA handled $37.9 million between July 1 and July 7, down from $76.3 million between July 3 and July 9 last year.
“We’ve seen a negative impact for sure, but due to our overall volume, not nearly as bad as NYRA has,” Moore said. “This situation is bad for almost everyone, us, NYRA and fans.”
FanDuel played ‘relatively minor’ role
NYRA disputes FanDuel is solely responsible for the year-over-year drop in handle during the holiday weekend. The racing association points to smaller field sizes and fewer races as the major culprit.
“NYRA’s handle numbers from last week were impacted by a significant decrease in field size and a reduction in the total number of races carded compared with the July 4 weekend in 2023, which was held at Belmont Park rather than Aqueduct,” McKenna said. “The removal of all NYRA content from TVG/Fanduel beginning on July 4 played a relatively minor role in NYRA’s overall handle figures from July 4-July 7.”
Belmont Park has a stronger brand, which brings in more wagering than races held at Aqueduct. On Saturday, July 6, the Belmont Derby card featured 11 races and 66 horses this year.
There were 12 races and 101 betting interests entered last year.
Summer racing season set to begin
The summer racing season in New York begins Thursday at Saratoga Race Course.
Alongside the Belmont Stakes, Saratoga is one of NYRA’s top horse betting brands. It commands hundreds of millions of dollars in handle and is popular for in-person attendance.
FanDuel will sit out the summer in New York if the contract terms do not change.
“Hopefully, we can have this content back available to TVG and FanDuel Sportsbook customers very soon, but the business terms have to make sense, or else we put at risk our ability to continue our significant investment in marketing, promoting, and televising racing,” Moore said. “Not having Saratoga will be very disruptive to (the customer) experience. That said, we are fully prepared for the eventuality that we will not have the Saratoga content.”
