New Jersey’s thoroughbred horsemen — already part of the groundbreaking, successful battle to launch legal sports betting across the U.S. — now have announced a deal that could boost the profile of horse racing betting as well.
The agreement, announced on Wednesday, means that Australian-based BetMakers will deliver and manage fixed odds for Monmouth Park races, and will distribute that betting option to interested racetracks across the U.S. and around the world. It’s the first such partnership in the U.S.
Those outside bookmakers will have to turn over an unspecified portion of their handle back to Monmouth Park as “rights fees.” The deal guarantees Monmouth Park a minimum of $5 million over the first five years.
“We believe that horse racing has the potential to be the largest betting sport in the U.S., including basketball, American football, and baseball,” said BetMakers Chief Executive Officer Todd Buckingham in a statement. “There is a real opportunity for the U.S. horse racing market to grow like it has in Australia, which has seen prize money levels double over the past seven to 10 years based on a funding model that is equitable to all participants.”
New Jersey already was the only U.S. state offering fixed-race odds, and last year DraftKings, on the eve of the annual $1 million Haskell race at Monmouth Park, experimented with offering fixed odds on that card.
But that move came without permission of the thoroughbred horsemen, so Monmouth Park operator Dennis Drazin told NJ Online Gambling that the scenario sowed the seeds for what eventually became this formal deal with BetMakers.
What’s so important about fixed odds?
The usual description about the need for fixed odds centers on a high roller who gets frustrated when he sees a horse at, for example, 5/1, but his massive bet single-handedly lowers the odds on that horse, cutting into his potential profit.
Drazin says he hears from plenty of small-time “railbirds” who complain when the horse they thought they had at 2/1, for example, gets knocked down below even-money at the last second. The odds may have a final change just as the race begins, and Drazin said some bettors mistakenly believe that is because of parimutuel bets being accepted after the horses get out of the gate.
The $1 million or so annual purse boost for Monmouth Park will mesh with the $10mm annual subsidy now provided by state government to the racetrack, and the roughly $1 million more that comes from sports betting revenue. That sets up the track to continue to offer more racing dates, more races, and deeper fields as horsemen flock to the enlarged purse structure.
Drazin conceded that offering fixed odds can be “tricky,” because at worst it could cannibalize the parallel parimutuel pool model. But he said that it’s more likely that fixed odds will lead to “new money” pouring in, producing a net positive for the track.
The partnership will send Drazin on a long road trip before the annual meet kicks off in Oceanport in May.
“We are excited to come to Australia as part of an education piece to understand how we can maximize the return on our racing for our participants — including owners, breeders, trainers, horse handlers, and operational staff at Monmouth Park,” said Drazin, whose elaborate planned trip to Australia with family for his 50th birthday in 2001 was called off in the wake of the 9-11 tragedy.
The legalization of sports betting across the U.S. — which came about because of a Supreme Court ruling in 2018 that included the New Jersey horsemen on the winning side — has made the need for similarly fixed odds in horse racing more urgent. Monmouth Park visitors notice that they know just what they are “buying” with a sports bet, yet they face uncertainty if they make a parimutuel horse racing wager.
Once the necessary governmental approvals are finalized, the deal will be for an initial term of five years, with BetMakers having an option to renew for an additional five years with proper notification in 2024.
The announcement quickly boosted BetMakers’ stock price, as investors seem bullish on the idea of the company expanding its fixed-odds strategy to numerous other U.S. racetracks down the road.
Photo by Benjamin F. Haith / Shutterstock.com
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