GIVEN REBATES AND COMPUTER-ASSISTED ARBITRAGEURS, PARIMUTUEL WAGERING IS A BAD BET

HALLANDALE BEACH, FL, March 17, 2023 –Despite the expansion of legal, sports betting to 36 states in 2022, racing more than held its own last year according to data released by Equibase in January. Purses also rose double-digits year over year.

Handle rose just shy of 11% while purses rose similarly to record levels, thanks to a little help from other gambling sources, aka casino dole and sots-like betting machines. But as sports analyst Lee Corso always counsels, “not so fast my friend.”

What these figures do not reveal is how the year ended. Handle in December, with rounding, declined 7.5%, following declines of 4.9% and 4.5% in October and November, respectively, resulting in a final-quarter decrease of 5.5% compared to the same period in 2021.

Of greater concern is that the trend continued into the first two months of 2023. According to the most recent Equibase figures, U.S. handle was down 5.2% in February, which followed a decrease of 7.1% in January even with 163 more races to bet on.

With the expansion of legal sports betting, racing handle likely will be outpaced in the future, begging the question how long can racing hold on as state bean counters, with animal rights groups nipping at their heels, weigh their options.

Indeed, what will happen when self-interested legislators begin calculating the expense of putting on a racing show–with all that valuable real estate just waiting to be re-purposed—compared to installing a few more machines and table games in smaller confines?

Horse race betting has only one viable counter-measure to ensure that its wagering product can keep pace with sports betting and that’s to align itself with sports gambling, the only betting vehicle in which some form of cross-over exists. There has been some, but these things take time.

There is another way to more easily introduce sports gamblers to betting on horses with its steep learning curve and real or imagined unsavory reputation, and that would be the introduction of fixed-odds wagering; the price you bet should be the price you get.

Tom Rooney, grandson of the Pittsburgh Steelers founder, Art Rooney Sr., hit the ground running in his first year as President-CEO of the National Thoroughbred Racing Association, relocating home office to Washington D.C. where he served as a Florida State Representative (R).

Said Rooney recently: “The 2023 gaming landscape promises to be more competitive than ever for the sports wagering dollar. It also represents a huge opportunity to introduce the sport of Thoroughbred racing to a vast new audience if we as an industry embrace the challenge.”

The hope is that he will lead the charge away from parimutuels to fixed odds wagering or, at minimum, as an adjunct to it. I read and I hear that it’s coming. It had better, and sooner rather than later. Both rank and file and serous players have been voting with their feet and walking away.  

As everyone in this space knows, simulcast wagering is a double-edged sword, providing a convenience market at the price helping to kill on racetrack attendance. And live horse racing remains the best and perhaps only means of creating lifetime racing fans.

Surely there always will be an audience for special events such as the Triple Crown classics and Breeders’ Cup, and boutique race meets such as Saratoga, Keeneland, Del Mar and a few others will continue to be attractive destinations.

Great traditional venues such as Belmont Park, Santa Anita Park, Gulfstream Park and Churchill Downs will continue to be major players but will struggle on weekdays and non-event days.

And there is life elsewhere, the surging popularity of Tampa Bay Downs, Remington Park and emergence of Kentucky Downs are good things. But not if the bettors walk.  

In recent years, I have been having a love/hate relationship with the game. Put together an outstanding program and I will support it. We spent last weekend in Oldsmar. It was well worth the time, effort and expense, four-hour drive and all.

It was a losing day but one I’m willing to take the blame for. My handicapping was solid. I bet my share of winners — though there were  a tad too many 1-3 split finishes — but I accept that as part of the game because multiple pools are a bridge to score-making.

But computer-assisted wagering is killing the straight pools and driving players away. The game is rigged against the straight player and it does not help to churn dollars. On balance, racetracks and ADWs don’t seem to care, promoting and pushing bets with high degrees of difficulty.

It has worked short-term. But over the long haul it will continue to bleed the majority of bettors dry as the last six months have demonstrated. But it’s a short-sighted fix. How does racing attract and keep  new fans by promoting high-difficulty wagers while randomly and significantly permits the moving straight-pool goal posts?

I have enough discretionary dollars to be considered a semi-serious player; personal handle last Saturday was just under $500. But I can’t match the arbitrage speed of final-flash computer bettors with whale-sized bankrolls who get roughly a dime back for every dollar bet.

As outlined in last week’s Tote Busters© analysis, we suggested a price play on Graham Motion’s Mission of Joy in the Florida Oaks. We bet enough to assure a profit at 8-1 or 9-1, those prices vacillating in the final wagering minutes. She was 9-1 as she stepped into the gate.  

She scored a hard-fought narrow victory with a bold, wide late rally, showing her potential class in those final yards. I checked the board looking for the running time when my eyes spotted the closing odds. The #1 horse was 5-1.

Mission of Joy dropped four points, literally between flag-fall and that’s-all. She returned $12 even, not even a dime’s worth of breakage. Further, I hit the Pick 5 on a $36 play with 1-2 Tapit Trice, paying a $184.70. There were two $3 horses in the mix, but also 12-1 early-line Mission of Joy, too.

I will tell anyone willing to listen how great this sport is, from the athleticism of horses and riders, to horsemanship, to the satisfaction derived from intellectual triumphs derived by successfully melding art with the science of handicapping.

But in good conscience I cannot tout horse racing as a good gambling game anymore. High-volume players should be rewarded, but not at the expense all other players.

The racing game is rewarding far beyond what sports betting offers beyond the randomness it provides with the proliferation of prop bets–good for bet takers, not bet makers. However, superior race handicapping cannot overcome the advantages enjoyed by a handful of privileged horseplayers.