For the longest time, horse racing had a monopoly on the regulated sports betting market in a variety of areas. However, as regulations have changed across the world and with sports betting coming more into the fore, how has that affected the horse racing world?
Understanding the complicated horse racing industry can be tricky for new users, so we’ve put together this piece to explain the different betting systems, along with what horse racing operators can learn from sportsbooks!
Fixed Odds v Parimutuel Wagering
For users who are only familiar with betting on sports, horse racing is quite different in terms of how its betting typically works. Horse racing uses parimutuel betting, as opposed to fixed-odds betting which is more common in other sports. Parimutuel betting is different that fixed-odds betting in that the final payout for the user isn’t determined until all bets are in. Depending on the prize pool (the total amount of bets), the payouts will change, which can lead to payouts changing all the way up until just before a race begins, depending on total bets. On the other hand, with fixed-odds betting, as soon as a user places a bet, they know exactly how much they stand to win.
Horse racing is one of the few sports that uses the parimutuel wagering system, which explains why the horse racing industry has been considering adjusting to fixed-odds wagering, as it is more in line with traditional sports betting. This change has already been seen predominantly in Australia, which has seen prize money levels double over the last decade by offering fixed-odds to clients.
By incorporating fixed odds and sports betting, along with improving the overall customer experience of players, can help operators position themselves to target new markets. – Grant Houldsworth, Sky Racing World, Marketing Director
Australia isn’t alone, as certain states in the US have begun to change regulations to allow for fixed-odds wagering as well. New Jersey approved it back in 2021, while Colorado has a proposal that could see them have it available as early as May. While long-time horse racing lovers are accustomed to parimutuel wagering, the more casual sportsbook user is likely accustomed to fixed-odds wagering, making it something to consider for horse racing operators looking to reach more casual sport fans.
Connecting with Sportsbooks
Horse racing has long been a regulated way to gamble in a variety of markets, while sportsbooks have only begun to become regulated in some markets like North America. With the interest in sports betting rapidly growing, horse racing operators should consider ways to bridge the gap between their sport and casual sports fans.
One way to do this is to combine offerings, giving users access to horse racing and sportsbook odds in one place, whether it’s a physical location or online app.
An example of this can be seen with The Meadowlands Racetrack in New Jersey, who have seen their traffic increase by having both options available. Speaking to CanadianThroughbred, their owner had this to say: “If you come to The Meadowlands on a day when there’s horse racing and sports betting and something people really want to see… it has livened up the place, which is important.”
Another concept that could help connect horse racing operators with sportsbook players is having shared wallets. If players can bet on horse racing, while not having to create additional accounts or jump from app to app, that would be greatly reduce some of the friction that players have. Offering popular and secure payment services can also help here.
While horse racing has long been included in the sports world, it provides a far different product than a typical sporting event. With many quick, exhilarating races to bet on, it can seem very different to a user who’s used to betting on a single game over the course of a night. That’s not the only difference, as sports generate revenue through a variety of avenues, while horse racing relies on gambling to finance their entire operation.
With regulations rapidly changing in both the horse racing and sportsbook verticals, it’s vital for both sides to continue learning from each other and adopting the most popular concepts into their own product.