Nevada sportsbooks were the only legal purveyors of fixed odds on horse racing in the US before New Jersey’s Monmouth Park joined them last year.
While Colorado has also legalized fixed odds on horse racing, the state has yet to launch them. Other states are in the process of preparing legislation that will make them legal in the future.
Australia-based BetMakers Technology Group which delivers the technology for Monmouth Bets, recently commissioned a survey that found an overwhelming demand for fixed-odds horse racing in the US.
But how long will the marker take to arrive, and what needs to happen for fixed odds to thrive at legal online sportsbooks?
‘Fixed Odds Can Flourish and Grow,’ Expert Says
Veteran horse racing oddsmaker Paul Zilm sets fixed odds for Circa Sports in Las Vegas. Circa patrons enjoy the luxury of knowing what their odds will be at the time they make the bet.
Many of us have felt the pinch of betting a horse at 5-to-1 odds, only to see that number diminish to 4-1 or 7-2 at post time. That’s a common frustration with parimutuel wagering, where odds shift based on the amount of money bet on each entry.
Zilm is a proponent of fixed odds being offered across the industry moving forward.
“My hope is that fixed-odds horse racing catches on and expands,” he told Gaming Today. “I love the concept of locking in odds, and treating the odds to win as a true market.”
He added with a caveat, “Under the right set-up, I do think fixed odds can flourish and grow.”
The foundation for their success at US sportsbooks must include lower hold percentages and fair limits, according to Zilm. Tracks across the US take approximately 20% out of betting pools as their revenue.
“One reason the parimutuel game isn’t as appealing to sports bettors and price-sensitive players is the high-takeout percentages,” Zilm said. “Races have to have a fair hold percentage to entice play. Nobody is expecting 5%, but you can’t have a 20-22% hold on a 10-horse field either.”
The second cornerstone for the foundation of fixed odds is fair limits. Some commercial sportbooks have faced criticism in recent years for drastically reducing limits for successful bettors.
“Limits need to be stated and fair,” Zilm said. “You can’t convert sports bettors and then limit them to pennies. The operators need to have it stated what they will take. I can’t stress these two things enough.”
Fixed Odds Slow Out of the Gate
Thoroughbred Idea Foundation (TIF) Executive Director Pat Cummings penned a 2019 white paper on fixed odds in the US that still resonates today. Cummings advocated for fixed odds in light of the threat that legal sportsbooks would pose to the horse racing industry in due time.
Some four years later, Monmouth Park has the only legal fixed-odds wagering platform in the US, and no legal online sportsbooks are offering them. Gaming Today checked in with Cummings to get an assessment of why, or perhaps better put, why not.
“Tongue in cheek here, I’ve been around horse racing a long time,” Cummings said. “A lot of people are resistant to change. You need to make it a joke because sometimes people don’t get it, but I have the feeling that a lot of people in horse racing would have initially been against indoor plumbing, electricity, and the wheel. It’s a running friendly joke. There’s an extreme aversion to change and trying new things.”
He added, “Could you imagine walking into a casino today where all the machines that they have are from 20 years ago with 20-year-old technology and game animation? It’s not conceivable. That’s kind of what our parimutuel betting menus look like, to be honest.”
Cummings is heartened by the fact that fixed odds are showing some signs of growth at Monmouth, where they were offered exclusively at the track to start and expanded to online. He noted the next step will involve simulcast fixed-odds betting for New Jersey residents through Monmouth Bets. That said, Cummings sees the need for widespread adoption in the industry to constitute real success.
“Horse racing is kidding itself if it thinks it can compete legitimately in the wagering ecosystem without offering its customers as many modern products as possible,” he said. “There’s an element of fear. There’s a concern about customers betting in a lower-hold win pool and tracks won’t make as much money as a result. I get it, but is that enough on its own to shun it? Absolutely not. We’re in desperate need of modernization.”
The future of horse racing on the continent will depend on it. Cummings wrote those words in 2019, and legal online sports betting has flourished since then. Fixed-odds horse racing is growing slowly and methodically, but Cummings believes the industry needs to make a stronger push.
“There are countless examples of people that anecdotally say to me, ‘I’m just not betting racing much anymore. I’m betting more on sports. It’s so easy and my money lasts me much longer,’” he said. “That’s all bad for horse racing. You have to start competing. My greatest source of optimism for the future of horse racing is that we’re not even trying. Imagine what we could have, and how we could compete, if we were far more active in that space.”
For his part, Zilm is taking the long view on fixed-odds horse racing in the US.
“It will take some time to grow fixed-odds wagering,” he said. “Working with state regulators will be slow. Developing the right tech and having more operators trying to get involved will also take time.
“Hopefully, in a few years, we can look back and see that those leading the way stuck with it and now have a product that is appealing and growing.”
Also read: Can Fixed Odds Help Fuel Horse Racing’s Growth at Sportsbooks?
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