At least some U.S. horseplayers will soon be able to wager with certainty thanks to a new move to reintroduce fixed-odds betting on horse races to the USA.
The new service was announced in February by Monmouth Park (Race track in Oceanport, New Jersey) and BetMakers, an Australian company with experience offfering fixed-odds wagering Down Under. The fixed-odds betting is not intended to replace pari-mutuel wagering in the U.S. but will be offered as an add-on service.
BetMakers CEO Todd Buckingham said the company hopes to begin offering the service on May 2 in New Jersey only, but aims to push it out to other states as it wins approval from regulators. It would also be available for other wagering services, such as advance deposit wagering websites, to offer to their customers in the states that approve it, and tracks in those states could opt to offer fixed-odds wagering on their races as well, he said.
“The idea is that they’ve got Monmouth to start with but we’re in discussion with other racetracks that will allow the operators to bet fixed odds on their products as well,” Buckingham said.
“It’s a model that’s worked in Australia. We’ve seen huge growth. … All metrics have been boosted by the introduction of fixed odds. We’ve also got the experience of what worked and what didn’t work, so we can go into the U.S. market and not make the mistakes that were made here.”
Pari-mutuel wagering vs. fixed-odds horse betting: what’s the difference?
Unlike pari-mutuel wagering, where odds change continually based on the bets that are made, fixed-odds betting allows a player to know the exact payoff he or she will receive if the bet is a winner. Odds are still adjusted, just as they are in betting on American football and other sports, but the current price is locked in when a ticket is purchased.
That eliminates the benefit for so-called “whale” bettors with huge bankrolls and computerized algorithms at their disposal to wait until the last possible second to bet, which can drastically change pari-mutuel odds.
“At the moment, the sharper punters are betting late because they’re looking at the market discrepancies,” Buckingham said. “Fixed-odds betting encourages the sharper punters to bet early if they like a price.”
Though the percentage of the handle that will be paid to the originating racetrack and other participating organizations has not yet been determined, fixed-odds wagering in other countries generally have a lower takeout than pari-mutuel wagering, which typically ranges from 15 to 19 percent on win, place and show bets to as high as 26 percent on some exotic wagers.
NJ Fixed-odds horse betting sites*
- Betfair NJ
- BetAmerica horse racing site
- William Hill NJ
*Expected in 2020/2021. New Jersey is emerging as an innovator in betting on horse races and already offers Betfair’s exchange-based fixed-odds wagering platform. Betfair, which matches bettors with opposing opinions on a race, has proven appealing to people with a background in stock trading, but has not caught on with horseplayers who grew up with pari-mutuel wagering.
The BetMakers scheme is nearly identical to sports wagering in the U.S. and could appeal to a much-broader audience of bettors.
Matt Davey, president and CEO of TEKKORP Capital of Las Vegas, which focuses on digital gaming and sports betting, said he decided to invest in BetMakers even though he’s not a serious horseplayer. But he said he sees considerable promise in offering fixed odds to players — particularly sports bettors who aren’t familiar with the pari-mutuel system.
“Parimutuel is a model that has taken hold here, but it’s not the best product for the customer. People don’t know what they’re buying,” he said, referring to late odds swings that can deflate the expected return on a wager.
Many racing industry interests are likely to push back against fixed odds betting, which ruled the roost in the early days of U.S. horseracing, out of fears that it will reduce the return they receive from parimutuel pools. But the experience in Australia shows that need not happen. Ten years ago, when fixed-odds betting was introduced there, annual betting handle was about $10 billion, according to Buckingham. Today it’s approximately $25 billion and nearly all of that growth has come on the fixed odds side of the equation, he said.
“I think it can happen in the U.S., too,” Davey said. “It’s just a matter of getting racetracks and other industry players comfortable that they’re not going to lose income.”
Davey also said that new digital-minded wagering operators coming into the U.S. will help promote the sport, as they will be looking for more product to offer newly acquired customers and seeking to introduce new information products that will be easier to absorb than the Daily Racing Form.
“All you need is for the tax rates to be sensible and to make sure that all racing constituencies — the racetracks, trainers, owners and customers — are better off,” he said. “I think we’re on the cusp of it now. The ingredients are all there.”
So, what does fixed odds mean for the US punters betting on horse racing?
Will you be able to bet on UK horse racing events, such as Cheltenham Festival or Royal Ascot via American online racebooks, such as Nyra Bets (New York), 4NJBets/TVG (New Jersey), BetAmerica or Twinspires?
Yes, once they get the regulatory approvals in order, bettors in the U.K. would be able to play fixed odds on Monmouth Park races and bettors in New Jersey would be able to play fixed odds on British races.
US States with possible fixed-odds horse betting sites:
- New Hampshire
- New Mexico
- Rhode Island
- South Dakota
- West Virginia