Horse Racing Still Figuring Out Where It Fits in Sports Betting Landscape

Industry representatives talked 'opportunity' at Global Symposium of Racing
Horse Racing Sports Betting
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“Opportunity” was the buzzword during panels related to sports betting at the University of Arizona Race Track Industry Program’s Global Symposium on Racing on Wednesday in Tucson.

At least one of the betting industry representatives defined that opportunity as a street that mostly runs one way — to get sports bettors to wager on horse racing.

“When I talk about the new customer opportunity for horse racing, FanDuel Sportsbook had more active customers in November than [horse racing advance-deposit wagering platform] TVG has had in 22 years,” said Andrew Moore, vice president of racing at FanDuel and TVG. “This is a huge opportunity for horse racing. … We’re looking to put horse racing into sports customers’ worlds, getting them betting on horse racing, and bringing a whole new customer set to the sport. We’re only at the tip of the iceberg.”

The rationale makes sense from a demographic standpoint, as well, since Moore displayed in a slide during his presentation that FanDuel’s sports betting customers are significantly younger than those on TVG’s platform. According to those numbers from FanDuel, 73% of online sportsbook customers are age 40 or younger (60% between 25 and 40), while 69% of ADW customers are older than 40 (33% between 41 and 56, 21% from 57 to 66, and 15% at 67 or older). The “opportunity” is to get younger customers into the racing market that has content at all hours of the day, every day, across the world.

“The sportsbook customer is a brand new customer,” Moore said. “They’re not being exposed to horse racing properly right now. … For [horse racing] to tap into the [sports betting] ecosystem is hugely valuable and a huge opportunity.”

Integration and shared wallets

The racing industry has been pondering its place in the ever-expanding sports betting marketplace for some time, and just how it fits isn’t settled, but there is motivation from both sides for crossover partnership. There is just too much money at stake not to, and improving the ease for a customer to move that money from a sportsbook, then to racing, then to casino and back is desirable.

“Sportsbooks [are] the big play. … How great would it be to have football, basketball, blackjack, and horse racing right there? Just click the sport and go right over,” said Bill Knauf, the vice president of business operations at Monmouth Park, during a panel on fixed-odds wagering in horse racing. “What sports providers have already started doing in New Jersey is cross-promoting casino, because they all have casino platforms. They’re moving these bettors, with one wallet, back and forth, from casino to sports, and in my mind, there’s no reason they can’t do that with horse [racing].”

A single wallet that can move into the three gambling spheres isn’t available to players who want to bet on horses and sports or horses and casino, even with operators like FanDuel/TVG that have sportsbooks and ADWs (FanDuel also has an ADW separate from the TVG brand), but that is expected to change shortly in states that have those legal online gambling options.

“We will have our ADW integrated into our sportsbook next year,” Moore said. “What that means is … you [can] go to the FanDuel Sportsbook, on the same account and wallet, [and] place a wager on a horse race. You cannot do that today.

“What we have seen is that sports betting customers are extremely willing to bet on horse racing. We saw that during the pandemic last year. We see it on major racing days. What we also see is they don’t really hang around, because they have different sports betting accounts with separate logins. They’re not inclined to deposit and play at two different places on the one day.”

There is also evidence that horse racing can benefit a sports betting operation, according to Dan Shapiro, the chief development officer at Caesars Digital.

“These are really engaged local fan bases that can help grow the sports betting marketplace. … We overindex in New Jersey, in terms of our share of the market, in Monmouth County,” Shapiro said. “It’s because we partner with Monmouth Park. It’s a well-known brand that’s been around for a long time. It’s got engaged customers, and they’re loyal to the brand, so when a storied racetrack like Monmouth Park partners with a sports betting operator, we see a lot of value there.”

Fixed-odds wagering another ‘opportunity’

A horse bet that wouldn’t require “integration” is a fixed-odds wager through a sportsbook, as opposed to a parimutuel wager through an ADW.

New Jersey will venture into the fixed-odds wagering world soon, and Colorado hopes to be next in line, but the discussion Wednesday touched on lingering issues and, of course, the “opportunity.”

Proponents pointed to successes from Australia, which they consider an extreme success in handle generation and its effects.

“This is not something we haven’t seen before,” said Dallas Baker, the head of international operations at BetMakers, which will offer fixed-odd wagering in New Jersey. “Twelve years ago in Australia, we pretty much had a similar model. Racing was in the [similar] withering-on-the-vine type thing, with all due respect to everyone in the room. We deregulated fixed-odds betting … and the wagering handle is now doubled, but by the end of this year it’s almost going to triple.”

Baker and Simon Fraser, a senior vice president at 1/ST Technology (formerly under the name of The Stronach Group), argued over the semantics of “cannibalization,” as it relates to the effect fixed-odds wagering will have on parimutuel pools. A question from the panel’s audience addressed the issue of sportsbooks limiting winning bettors, which would be a factor in fixed-odds wagering.

“The biggest questions horseplayers have about fixed odds is how it is going to affect us, with the assumption that, the minute you make a winning wager … we’re going to be cut off,” said Peter Fornatale, a bettor and prominent member of the horse racing media.

Baker called for a “minimum bet that [bookmakers] have to accept,” for operators to “self-regulate,” and acknowledged that the issue is “something that has been a problem.”

DraftKings CEO’s polarizing comment

The question came in the wake of DraftKings CEO Jason Robins’ recent comment that “People who are doing this for profit are not the players we want.”

“The CEO of DraftKings said last week, effectively, he doesn’t want your business. If you win, he doesn’t want you as a customer,” Fraser added. “That is true, because bookmakers need losers. You need to have a vast majority of your customers losing money, if you are a bookmaker, to make money.

“You can put in minimum bet limits, and all that does is push up the margin and make the market unattractive, and you may as well stay in the [parimutuel] pools, because if the bookmakers have to price in winning punters, they have to add in two, three, four, five extra percent of margin, which then makes the product unattractive.

“It’s a big worry, and you should be worried about it. … Fixed odds might become a part of the way you wager, but I would imagine you will still need to be a significant [parimutuel] pool player if you’re going to be able to get the bets on that you want.”

There are also still concerns on the horsemen’s side relating to how (and how much) purses and racetracks will benefit from the fixed-odds equation, but Eric Hamelback, the CEO of the National Horsemen’s Benevolent and Protective Association, acknowledged the parimutuel wagering system is “stagnant.”

“It’s no secret we enjoyed the success in a monopoly environment for years. … The current atmosphere is filled with fast-paced [action], buttons, flashing lights, innovation, and certainly customer satisfaction,” Hamelback said. “We don’t want to get left behind.”

Photo: Jamie Rhodes/USA TODAY

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