Horsemen in Louisiana are planning to push once again for fixed-odds horse racing in the state when lawmakers meet next year, but they will need to find a new sponsor for their bill.
As the name implies, fixed-odds horse racing allows bettors to lock in their odds when they make a wager, unlike parimutuel wagering, where odds fluctuate based on the amount of money wagered on each selection.
House Bill 564 sailed through the Louisiana Legislature this spring, passing by a 93-9 vote in the House and 36-2 in the Senate. However, the Senate amended the bill to ban fixed-odds wagering markets for out-of-state races. The House rejected the change, and a conference committee could not reach a consensus before the legislative session ended in June.
Louisiana would become the third state to approve fixed-odds wagering for racing. New Jersey already has it in place, and Colorado gaming officials have also signed off on it.
The bill Louisiana lawmakers considered would allow fixed odds to work differently than it does in New Jersey, where MonmouthBets – a site tied to Monmouth Park, the state’s main thoroughbred track – is the only operator. HB 564 would allow state-licensed sportsbooks to include it on their platforms.
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Racing Needs To Attract New Bettors
In some states, the mention of fixed-odds racing brings resistance from horsemen but not Ed Fenasci. The executive director for the Louisiana Horsemen’s Benevolent and Protective Association told LouisianaBets.com in a recent interview that he supports it because he sees that racing no longer holds the same place among U.S. sports as it did a half-century ago.
“The parimutuel wagering model has been very good to horse racing for a number of years, but it’s not competing well with the other models that have been introduced in Louisiana,” he said.
According to the Louisiana Racing Commission, the total handle for horse racing in the state for thoroughbred and quarter horse racing was $74.9 million from July to December last year, and that figure includes money wagered from out-of-state sources. Louisiana sportsbooks and betting apps generated $1.06 billion over the same timeframe. So, Fenasci and other supporters see sportsbooks as a way to attract new betting customers to the sport. Under federal law, all sports bets must be made inside the state.
Many of those sports betting players are far younger than the typical horse bettor, too, Fenasci added.
“We’ve done a poor job as an industry appealing to the larger and younger customer base,” he said.
Sportsbooks have also expressed interest in racing, especially in the past year, primarily because the sport can be a content provider. According to Equibase, there were 33,453 races at U.S. tracks last year. That’s more than 91 per day, not including any international races.
Carstanjen: Parimutuel Bettors Take Advantage Of ‘Ineffiency’
Fixed-odds racing does have some critics. The most notable would be Bill Carstanjen, the CEO of Churchill Downs Incorporated. The Louisville-based company owns Fair Grounds Race Course in New Orleans.
Last month, Carstanjen appeared on an episode of Bet On Policy, Baby!, a gaming policy podcast hosted by West Virginia state Del. Shawn Fluharty and Indiana state Sen. Jon Ford. The lawmakers asked Carstanjen about fixed odds, and he quickly responded that a fixed-odds product would likely not offer astronomical odds, like 99-1, on some runners in a race that bettors can capitalize on in parimutuel wagering.
“Right now, there’s still a lot of inefficiency in the horse pools because it’s really the players playing against each other,” Carstanjen said. “It’s not a bunch of guys in Sweden setting the odds based on absolutely accurate, best data in the world. It’s a bunch of players from all over the country that are just betting based on their perception.”
Race tracks take a percentage of the parimutuel pool, usually between 15% and 20%, to cover race purses and other expenses before dividing the remaining money among the winning bettors.
Proponents of fixed odds counter that argument by saying their product would not cannibalize the existing parimutuel pools. Instead, it would also attract new bettors to the sport.
They also point out that purses are now subsidized in many states through alternative gaming, like slot machines, so the threat to parimutuel pools isn’t as severe.
New Sponsor Needed
Another thing working against supporters next year is House Speaker Clay Schexnayder, the prime sponsor of HB 564, is term-limited and unable to run for re-election this fall. That means proponents will need to find another lawmaker to carry the bill when the legislature reconvenes in Baton Rouge next year.
Fenasci remains undaunted.
“I think this is the future of horse race wagering,” he told LouisianaBets.com. “This is what can be a big boon. Now, it has to be done carefully, and we have to make sure that the economics of it are worked out properly. But I do think that this is what’s going to appeal to that larger customer base.”
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