LEXINGTON, Ky. – Kentucky has long been the epicenter of American horse racing, but industry leaders are worried that sports betting could have negative consequences for the horse racing market. According to some horsemen’s groups, the key to survival is utilizing sports betting’s fixed-odds model.
Pat Cummings, head of the Thoroughbred IDEA Foundation horse racing thinktank, is deeply concerned. Cummings’ group recently released a study to this end, stating in no uncertain terms that the “momentous threat” to horse racing is “the rapid expansion of legal sports betting.”
Interestingly, though horse racing has been more or less plateauing at most venues for years, operators at these sites are also convinced that the death knell for the industry is going to come alongside the rise of sports wagering. That is, unless the pari-mutuel betting system used is changed over to the sports wagering style.
Does Increased Interest = Increased Interest?
Despite the lack of any supporting data, the premise of the Thoroughbred IDEA Foundation’s report is that horse racing betting needs to be more like sports betting in order to survive. That may be misguided, as it conveniently hides two important elements from the layman:
First, the old saying that “a rising tide lifts all boats” might be apt here. There is a school of thought that the propagation of legalized sports betting will be just one more product to get bettors to the horse tracks. Thus, sports wagering could well be used to introduce a new generation of gamblers to the pastime.
Second, the assumption that the legalization of sports betting fundamentally changes the betting landscape – and where Americans are willing to spend their money in the gambling marketplace – might be misguided. Remember, sports wagering – even without federal decriminalization and individual state legalization – was estimated to turn an annual handle of $300-$400 billion. One would think that if horse racing could survive illegal sports betting, it can certainly survive legal sports betting.
Legality Of Pari-Mutuel vs. Fixed-Odds Betting
The major takeaway from the Thoroughbred IDEA Foundation’s stance is that sports betting is more popular because of the fixed-odds model and that horse racing betting’s pari-mutuel system is outdated or unwanted by the general public. But changing that landscape is much more complicated than simply flipping a switch.
In most jurisdictions where horse racing is legal, the activity has its own specific rules. These are not included with standard casino gaming laws, for example, and they are not included among sports betting laws. In many states, horse racing betting is the only kind of legal land-based gambling that exists within their borders (not including lotteries and bingo). This is because most legislation across America differentiates between pari-mutuel betting and single-game fixed-odds betting.
In other words, horse racing betting is largely legal in states where the practice is common precisely because “pari-mutuel betting” is specifically named as an exemption to existing gambling prohibitions. Before horse racing can transition to a fixed-odds model, the laws in most states will have to be changed.
Sports Betting To Support Horse Racing?
There is, perhaps, a better solution, and one that preserves the charm that is pari-mutuel horse racing betting. After all, if there is any sports industry that still trades primarily on tradition in the US, it’s betting on the ponies, and many gamblers will not welcome sweeping changes to the centuries-old model they know and love.
While states like New Jersey are toying with the idea of boosting track purses (thus boosting track interest and, ostensibly, track revenue) with taxpayer funding from state coffers, this might not be necessary. In most states legalizing sports betting, there are existing track venues that are getting the nod to add sports wagering to their offerings.
It is entirely within the purview of such tracks to earmark a certain amount of their sports wagering revenue to boost their horse racing products, and this is already occurring at venues like Monmouth Park and The Meadowlands. Because of this, there is no actual crisis here, and horse racing isn’t going anywhere. Many sports bettors might even finally discover that they’ve been backing the wrong horse – that the Sport of Kings has been a superior product this entire time!
Andy has been writing professionally for nearly two decades, with the last three years being dedicated to his primary passions: sports wagering news and gambling industry analyses. A walk-on punter, Andy has a particular interest in professional football, baseball, and horse racing betting. Come early May, you can always catch Andy – clad in all white, mint julep in hand – on Millionaires Row at Churchill Downs. In his dreams.