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Fixed-odds betting on horseracing is a natural evolution of the gaming industry but something that has been lost in all the attention sports betting and internet gaming has received over the last five years, according to a betting company executive.
Paul Hannon, senior vice president of corporate development with PointsBet, said the day in May 2018 that the federal sports wagering ban was overturned by the U.S. Supreme Court presented the racing industry with a generational opportunity to transform its revenue model.
The end of the Professional and Amateur Sports Protection Act (PASPA) also gave horseracing an opportunity for “future proof of its mainstream existence and return to a business cycle of sustainable growth,” Hannon said.
“The impact of fixed-odds racing in sports-betting apps would be overwhelmingly positive from the jump,” Hannon told VIXIO GamblingCompliance.
“Every industry goes through cycles,” Hannon said. “I compare the racing industry to the auto industry today. The largest established car companies are in the midst of transforming their organizations and operations … to reposition for the wave of growth in digitally powered, product centric electric vehicles.”
This transformation, he said, was effectively forced on Ford, General Motors, Toyota and others by a company called Tesla. Those same companies had consciously chose not to develop electric vehicles for many years, until they had no other choice but to.
“It comes with painful but necessary decisions in the short term for sure,” Hannon told VIXIO.
Fixed-odds betting in the U.S. has long been favored by some in the horseracing industry, while others have expressed concern that pari-mutuel handle and the guaranteed returns it offers to racing might be cannibalized by the new form of wagering.
So far only Monmouth Park racetrack in New Jersey has launched fixed-odds wagering since the U.S. Supreme Court overturned the federal ban on sports betting in May 2018.
The Colorado Limited Gaming Control Commission approved regulations for fixed-odds betting on horse races in March 2022 but no operators are offering it at the state’s only racetrack or on simulcasts of out-of-state and international races. Racing officials are confident fixed-odds wagering will begin in 2023.
Meanwhile, for the second year in a row, New York Democratic Senator Joseph Addabbo has introduced a bill that would allow online sportsbook operators in the state to offer fixed-odds bets on racing.
Senate Bill 2343 would also allow for self-service kiosks to be placed at a number of locations in the state, including stadiums and auto-racing tracks. The measure has been assigned to the Senate Racing, Gaming and Wagering Committee, which Addabbo chairs.
The bill would allow the New York Racing Association (NYRA) itself to offer fixed odds on its races, at least to state residents, through its mobile-wagering platform. Other operators also would be allowed to offer the wagers through content agreements reached with the NYRA.
Currently, the NYRA has partnership agreements with both Caesars Entertainment and BetMGM for those companies to offer pari-mutuel betting on its races.
A similar bill introduced last year by Addabbo was never advanced for a vote. A companion measure, Assembly Bill 3562, authored by Democratic Assemblyman J. Gary Pretlow, was recently referred to the chamber’s Racing and Wagering Committee.
New York is the only state where lawmakers are considering legalizing fixed-odds betting. As of Monday (February 13), neither the House nor Senate committees had scheduled a hearing on the bills.
“Lawmakers and regulators in each state set to look at fixed-odds racing expansion would leave a legacy of progress on the industry if they were to view this as an opportunity to analyze how gaming and racing could mechanically work together to provide the best landscape for all stakeholders, most notably the taxpayers who are also the customer,” Hannon said.
“Gaming and racing have converged for good, the codes should reflect that fact now,” he added.
The only legal form of betting on horseracing in most U.S. states is pari-mutuel wagering, in which the odds are set by the distribution of bets within a pool. Fixed-odds allow a gambler to wager on a race with a set return.
Hannon believes there is space within the sports-betting ecosystem for fixed-odds, but questioned “how and when does horseracing as an entertainment medium begin to plug in across the modern betting product and content ecosystem, and piggyback the mass distribution that is now the major interactive mobile app operators in the U.S.”
He stressed that there remains a “massive hole” in the U.S. for always-on and authentic betting content.
“Horseracing is sports betting and was the original type of sports wager,” Hannon said. “It is the only sports designed purely for betting purposes.”
