A New Jersey state Senate committee on Monday unanimously approved a bill to clarify the status of fixed-odds wagering on horse racing — a move that a lobbyist said was urgent.
“The future of horse racing in America must include fixed odds betting,” William Pascrell III of Princeton Public Strategies told the Senate Budget and Appropriations Committee during his testimony in Trenton.
“If we don’t add fixed odds, in the next 10 years — or sooner — our horse racing industry is due to die on the vine,” he added.
Pascrell gave as an example the fact that if a bettor wagers on the New York Giants getting three points against the Philadelphia Eagles, that point spread does not change based on later betting.
But with parimutuel horse racing odds, Pascrell explained, someone who bets on a horse 20 minutes before the race at 7-to-1 could see those odds drop as low as 3-to-1 or 2-to-1 simply because a deep-pocketed gambler — known as a “whale” — bets big on the same horse just before the race starts.
That uncertainty has contributed to the lack of interest among younger gamblers, Pascrell said. The point has been highlighted since sports betting, which has odds fixed at the time of the wager, was legalized in the state in mid-2018.
BetMakers bullish on New Jersey
Australian company BetMakers, a client of Pascrell’s, signed a deal with the state’s thoroughbred horsemen and Monmouth Park in February to offer wide-scale fixed odds wagering. The horsemen are to receive a minimum of $5 million from the deal over the course of the first five years.
Pascrell said a BetMakers executive approached him at a gambling summit in Barcelona in July 2019 to inquire about the possibility of entering the New Jersey horse racing market.
The Garden State is the only one to have implemented fixed odds horse racing betting already, but that was just for very limited purposes on The Haskell horse racing event at Monmouth Park beginning in 2018. The goal among fixed odds proponents is to have it available for all races at each of the state’s three racetracks, including the Meadowlands and Freehold.
The bill, sponsored by senators Paul Sarlo of Bergen County and Vin Gopal of Monmouth County, clarifies that fixed odds wagers fall under the regulations of horse racing betting, not sports betting. Supporters have said that language is needed to remove concerns about how the wagers would be handled.
As an example, horse racing bets can be made by anyone age 18 and up, while sports bets are limited to those 21 and over.
All 11 members of the budget committee voted in favor of the bill, which bodes well for the bill to be fast-tracked and then approved by the overall legislature.
How big can fixed odds revenue get?
Pascrell said that BetMakers is so interested because of the horse racing boom taking place in Australia and the potential major upside in the U.S.
With fixed odds finding appeal among younger Aussies, their 25 million residents wagered about $30 billion (or $22 billion in American dollars) on horse racing last year.
Meanwhile, there are about 330 million Americans but a mere $10 billion was wagered in the U.S., Pascrell said.
Reaching Australian levels of betting interest, then, would mean a staggering $300 billion or more in handle in the U.S.
That isn’t realistic, because Australians are the most gambling-centric population on Earth while Americans are much more reticent than counterparts in most countries on almost all things gambling.
But clearly even a mere fraction of that figure could make BetMakers’ bet worthwhile.
Monmouth Park operator Dennis Drazin told a Seton Hall Law School audience in March that fixed odds could account for almost half of the country’s race betting handle in just five years if it were offered in the horse racing states.
An Authentic bonanza
As part of its inroads into the American market, BetMakers this year sponsored the “BetMakers Bonanza,” a $1 million prize to be awarded to any horse that won the Haskell, the Kentucky Derby, and last week’s Breeders’ Cup.
That check will be cashed by the owners of Authentic, who swept all three races in an outstanding season.
“It’s a good thing they had a good insurance policy,” Pascrell quipped.
The Bonanza is a three-year agreement with Monmouth Park, with the next two years featuring the Haskell, The Breeders’ Cup, and a third race yet to be finalized.
Who else could gain from fixed odds?
“This legislation will protect the racetracks, the horsemen, the veterinarians — anyone with a stake in the horse racing industry,” Pascrell said.
Legislators from other states such as Ohio, North Carolina, Oregon, and Oklahoma have discussed getting into the fixed odds game as well, Pascrell said.
“But we want to be first right here,” Pascrell said.