The Thoroughbred Idea Foundation (TIF) has released its latest white paper. “Horse Racing and ‘Legal’ Sports Betting” takes an in-depth look at the explosive growth of fixed-odds betting against the backdrop of racing’s long-standing pari-mutuel business.
“Without question, legal sports betting presents a momentous threat to all facets of the horse racing business,” said TIF Executive Director Patrick Cummings. “But those threats can be mitigated with action. There is an opportunity for racing, but it is limited to just the next few years. Racing must accept fixed-odds and exchange wagering, develop a new funding model to support the sport and innovate with new bet types, appropriately priced.”
The report outlines the rapidly changing fixed-odds marketplace, defining the ramifications of legalized sports betting, the speed with which these new markets have been embraced by sports leagues and their broadcast partners and racing’s early response.
“Racing operates off betting revenues,” Cummings added, “but sports gain their revenue through distribution deals. Sports betting increases the value of the distribution before ever factoring in what revenues the teams or leagues might receive directly from betting. When almost all of the growth anticipated in the near future is through fixed-odds wagering, where customers know what a winning bet’s expected return would be at the moment the bet is placed, racing’s long-standing pari-mutuel model antiquates rapidly.”
TIF’s Founder and Chairman, Glen Hill Farm CEO and President Craig Bernick, suggests there is a path forward available for racing.
“The burden to lead this charge sits almost exclusively with horsemen’s groups in individual states,” says Bernick. “Racetracks themselves cannot be expected to lead the way on behalf of the sustainability of the sport. Tracks will happily take sports bets, and some already are, but it doesn’t mean they will act in the best interest of the industry – from horsemen on the track to breeders and everyone in between. deals must be struck and racing must compete in this newly legal space.”
Earlier this week, TIF released a primer on the topic of takeout, aimed at informing all industry stakeholders of the impact of the sport’s long-standing pricing model. CLICK HERE to read “Takeout 101.”
Today’s release is the third white paper presented to the industry by TIF since September. The first two reports covered the topics of pari-mutuel breakage and the rules interference philosophy applied in North America. Since those papers were published, TIF continues to advocate for change on those topics and will update the public on advances in each of those areas as warranted. For more information, please visit RacingThinkTank.com
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