Thoroughbred, Trotting and Greyhound racing in the United States have traditionally relied upon shared takeout from parimutuel wagering pool handle. This industry model has been an arrangement in place for most racing jurisdictions all around the world for generations.
In February 2020 Monmouth Park in New Jersey announced they had engaged Australian wagering partners and sought regulatory changes to allow fixed odds wagering on horse racing within the state. If approved, changes could play a major role in the future performance and sustainability of the industry across the country.
A selection of global regions provide case studies where introduction of fixed odds wagering bet types have complimented parimutuel offerings and stimulated sustainable net growth.
In markets of Australia and New Zealand especially, also parts of Europe, fixed odds and parimutuel wagering options have co-existed to fulfill demand growth for two decades.
According to the International Federation of Horse Racing Authorities (IFHA) facts and figures, thoroughbred racing handle in Australia and New Zealand has grown by 9.5% and 5.5% CAGR respectively in the 10 year period between 2008 and 2018. Australian racing handle combined across three codes of Thoroughbred, Harness and Greyhounds for 2017-18 was $25.8 billion (AUD) up from $11.0 billion in 1992.
In contrast, fragmented parimutuel only markets scattered across 40 authorized jurisdictions in the United States have collectively been flat, 0.04% CAGR from 2008-2018.
In a Wagering and Betting Discussion Paper released by the Office of Liquour, Gaming and Racing figures from Racing Australia’s Fact Book from 2009-10 to 2016-17 show changes in demand from bettors in Victoria, one of Australia’s two largest race wagering regions. Here consumer preferences continue to shift away from parimutuel pools toward fixed odds. Overall total wagering turnover has grown with rapid acceleration of fixed odds outpacing incremental decline of parimutuel trends.
As sports wagering opens up across more of the country, the American racing industry will be well served to leverage insight from the experience in other jurisdictions, such as Australia, to consider how best to meet demands of a future wagering generation here now.
Australian sports wagering has seen annual growth of 23% by comparisons to 3% for racing, even with Federal legislation which makes it illegal for gambling providers to offer online in play sports betting.