The multi-year effort to bring a fixed-odds betting option to horse racing is set for a critical vote in New Jersey in June when the state Senate is scheduled to bring up a bill that would make it the first state to offer it. The vote is likely by mid-June.
Fixed-odds wagering bills have passed with flying colors in recent months, gaining unanimous approval in multiple committees and general assembly votes since November. Most recently, it passed by 75-0 vote on the General Assembly floor.
Its passage in June would put the bill on Gov. Phil Murphy’s desk for his consideration to sign into law.
Looking good for fixed-odds wagering
Bill Pascrell III, a partner at Princeton Public Affairs Group, has been a leading advocate for the legislation. He said, based on meetings he’s had over the past year and a half with Gov. Murphy and his senior staff, the governor would be in favor of the legislation.
Representatives from New Jersey’s racing industry and Pascrell will continue to hammer out language on commercial terms and concerns in the legislation expressed by industry members.
Presently, the legislation states that licenses would be issued by the New Jersey racing commission with the help of the state Division of Gaming Enforcement, which would work collaboratively on licensure review. All three New Jersey racetracks (Monmouth, Meadowlands, Freehold) are entitled to receive licenses if they meet the credentials.
Also at odds is how thoroughbred racing and harness (or standard-bred) racing would participate and share in the betting pool. Monmouth Park is New Jersey’s top live thoroughbred race track. Meadowlands offers a short thoroughbred meet (managed by Monmouth) and otherwise mostly harness racing. Freehold only offers harness racing.
Pascrell’s goal is to have New Jersey become the first state to allow such betting, as it was when it became the trailblazer in sports betting legalization in 2018. Then, the U.S. Supreme Court ruled that sports betting could take place outside of Nevada. Monmouth Park took the country’s first legal sports bet soon thereafter, placed by Gov. Murphy.’
‘Important to get it right’
The legislature’s current session will continue this month before breaking for summer.
Monmouth Park owner and operator Dennis Drazin said, “I believe fixed-odds betting is coming and is here to stay.”
BetMakers is an Australian technology company that designs the systems to enable wagering. Pascrell and BetMakers have met with Meadowlands’ CEO Jeff Gural and his team multiple times over the past 16 months to discuss the opportunity.
Monmouth Park signed on with BetMakers last year.
Gural said he’s in support of adopting fixed-odds wagering, “but it’s important that we get it right, so that everyone benefits. It’s important that it doesn’t create a situation where revenues decline.”
Here is what Pascrell about the topic:
“My advice to Freehold and Meadowlands is to get in now because once this [New Jersey] bill goes, it’s going to go throughout the country like wildfire. And the first deal is always the best deal, as you know.”
What is fixed-odds betting?
Fixed-odds betting would revolutionize horseplaying, bringing it to include the more common method of wagering (such as is with professional and college sports) where bettors place bets at the odds posted and hold those odds for the race.
Pari-mutuel betting allows bettors to wager right up to the moment the race begins (as does fixed-odds wagering), and those bets, along with all others that have been placed, set the payouts for the race.
In other words, while a punter may have bet $2 to win on a horse at 4-1 some 15 minutes before the race, the odds could have shifted to 2-1 or 8-1, for example, at the time the horses leave the starting gate.
Also, prop bets could be offered for horse racing as well, such as:
- Betting on which jockey will win the most races that day
- How many favorites come in
- Whether more odd- or even-numbered horses win
New Jersey racetracks ‘need to grow’ fan base
Offering gimmick bets could attract younger players to horse racing. The average Monmouth Park patron is age 66, Drazin said. Meadowlands’ bettors’ average age is higher.
Monmouth Park owner and operator Dennis Drazin spoke to New Jersey legislative members in May, telling them that horse racing needs to grow its fan base.
“Now, the sport is limited by the number of eyes it has on it,” he said. “Sports betting has 20 times the multiple of eyes on its products.”
Pat Cummings, executive director, Thoroughbred Ideas Foundation, said, “The pari-mutuel menu has been so stale for so long.
“In the past 20 years, the biggest evolution to pari-mutuel betting has been the low takeout Pick 5. We’re ready for more than that. We’re very supportive of the developments we’ve seen about fixed-odds wagering recently. There are elements and questions from some in the industry who are fearful of change, but we’re never going to know if this will help to grow our sport unless we try it.”
Why NJ horse racing industry has a lot to gain
Gural said he had some concern that the bill would benefit a select few, such as BetMakers.
BetMakers does not accept bets, and does share in all revenue under the current model. It would be hired to take tracks’ feed and send it worldwide and have sports-betting operations take those bets. BetMakers draws on those bets and distributes a portion of those pools to horseman and tracks based on the commercial terms reached by BetMakers and the tracks; 87.5 percent of the pool is returned to bettors.
In a gesture that Pascrell said showed that BetMakers is supporting the horse racing industry in total, it recently purchased U.S.-based Sportech. The company provides bet-processing services to major racetracks and account-wagering companies in the United States. It’s one of three tote systems operating.
“This is Exhibit A proof that fixed-odds betting will not cannibalize the tote system,” Pascrell said. “Otherwise, why would they have made this deal? BetMakers is not here to put the pari-mutuel betting system out of business. It’s here to prevent it from dying and to bring it stability by enabling an additional way to wager.”
No threat to exotic wagering
Fixed-odds betting would apply only to win, place, and show betting. However, it would not apply to exotic bets such as exactas, trifectas and Pick-4s, Pick-5s and Pick-6s, which would remain on pari-mutuel platforms.
In another sign of support, Pascrell said BetMakers has offered a guarantee that should the 30 percent of wagering in WPS bets (which comes to about $2 million) diminishes, it will pay New Jersey’s Standard-Bred Breeders and Owners Association for it in indemnification.
The hope, Pascrell and others in the industry have, is that fixed-odds betting will bring a higher volume of bets, which will make up for the difference in the takeout percentage (fixed odds’ takeout is about 8 percent to 10 percent and pari-mutuel is roughly 20 percent).
Fixed-odds betting has been offered through online wagering for 10 years in Australia. It’s a country of 24.6 million people who now wager $25 billion on horse racing annually, with 60 percent of that from fixed-odds betting.
Comparatively, the U.S. has 330 million people who wager about $11 billion annually, none of which is done through fixed-odds wagering.