Innovative Wagers Help Racetracks with Handle

Attendees of the Global Symposium on Racing and Gaming heard about a variety of new wagering options from an international panel on the final day of the conference Dec. 7 in Tucson, Az.

As handle has remained stagnant recently after a significant fall from $16 billion annually in 2005 to $11 billion in 2015, new options are being tried across the world to entice players back to racing.

David Haslett, CEO of Sky Racing World in Australia, related several new wagers that have helped handle in that country go the opposite direction, from $11 billion in 2005 to $16 billion in 2015. Fixed-odds wagers make up 33% of the bets made in Australia, allowing gamblers to lock in their odds while creating more interest in morning-line and early-market odds.

Haslett also said that early cash-out wagers helps with churn. In the Cash-Out Quaddie wager on Pick 4s, for instance, bettors can cash out after each leg, or can partially cash out while keeping a percentage of their bets going forward in the sequence. Another wager is Flexi-Betting, which allows players more selections for a percentage of the ultimate dividend, which creates more winners and helps keep players engaged.

Also in Australia, Virtual Betting using animated races lets bettors play in between live races, with the animated races going off every three minutes. “This complements the live product while educating people on bet types,” noted Haslett. Maryland instituted this wagering and saw $160 million in sales last year, according to Haslett.

Klaus Ebner, manager of simulcast and track relations for the Woodbine Entertainment Group, said that the Ontario track is trying new wagering initiatives, including lowering the minimum wager on all wagers in 2012. Win, place, show, exacta, and daily double minimums were lowered to $1, and various exotic wager minimums to 20 cents. A year later the track lowered its win takeout to 14.95%.

“We listen to our customers,” Ebner said. “They wanted more turf racing, and we’ve seen a bump in wagering because of the large fields, competitive races, and better payouts. Higher quality also drives wagering.”

Ebner added that it is important for racetracks to find their niche, even if that means running races on weekdays to avoid competition from bigger outfits.

Andrew Offerman, director of racing at Minnesota’s Canterbury Park, explained the results of that track’s experiment with lowering takeout in 2016. Win, place, and show wagers saw their takeouts lowered from 17% to 15%, while exactas went from 23% down to 18%, for a blended takeout rate of 16.5%.

Total handle was up 5.3% for the year, but the racetrack overall failed to make up for the lost revenue from the lower takeouts, losing $320,000 this year compared with 2015. Offerman said that other variables such as wet weather, field size, competition from other tracks, post times, and a lack of a regular circuit wherein bettors could be more familiar with the horses make it difficult to gauge how big a factor the takeout rate was. He added that a decision on 2017 rates would be made in the first quarter of the new year.

Bart Barden, director of the U.S. exchange for Betfair, detailed the success of exchange wagering in New Jersey, saying that form of wagering, in which gamblers match bets against each other, increases churn while bringing new money and players into the game.

In the final panel of the conference, Steve Koch, executive director of the National Thoroughbred Racing Association’s Safety and Integrity Alliance, announced the release of a 28-page document detailing best practices at test barns. He noted that local rules and needs could lead to changes for various jurisdictions, and added that the document had been adopted by the NTRA Safety and Integrity Alliance as well as the Racetrack Medication and Testing Consortium.

Dr. Dionne Benson, executive director of the RMTC, stressed that paired samples (blood and urine) are better able to detect substances in the horse than blood-only testing.