The 2019 Kentucky Derby will take place on May 4 at Churchill Downs Racetrack. As the sports world gears up for one of the marquee events on the calendar, in a year of legalized sports betting in New Jersey and several other states, there’s little doubt that the upcoming “Run for the Roses” will be especially crucial for the horse racing industry.
Horse racing, a very expensive sport to engage in and to build a business around, has declined in recent years. The industry depends on gambling for revenue. In 2017, the Pegasus World Cup Invitational was invented as an attempt to increase both interest and gambling revenue for the sport.
Long before the Supreme Court ruled to allow all states to legalize sports betting, the Kentucky Derby was a cash cow for the industry. Consider this:
- In 2018, the Derby set an all-time wagering record of $225.7 million for the six-day race week program and $149.9 million for the actual race.
- Both figures were a reported eight percent increase over the previous record set in 2017.
Not surprisingly, now that eight U.S. states allow sports betting and options for placing wagers online are plentiful, betting on the Kentucky Derby is expected to increase yet again. That said, horse racing insiders have some concerns about how their industry can best adapt to a world of legalized betting, in order to grow and thrive in coming years.
The Call For Fixed Odds
One major discussion topic involving horse racing and gambling is, should the sport adopt the fixed-odds model that’s so common in other major sports?
“Fixed odds” means, you know the price when you place a bet on an event — it’s “fixed” by the bookmaker — and that price does not change, regardless of what happens in the event.
By contrast, throughout history, horse racing has employed what is called pari-mutuel betting, in which all the bets go into a pool and are divided based on the results of the event. Odds in that case are determined by the amount wagered on each horse. The pari-mutuel model allots a cut of the pool to “the house,” which in this case means winners of the race and the track itself.
Why is the fixed-odds model preferable? Basically, it opens horse racing up to a much greater audience in a nation where sports bettors understand and are accustomed to fixed-odds wagering. With fixed odds, incorporating horse racing would be much easier for an online betting outlet.
A greater audience and easier access to wagering opportunities, of course, means more revenue.
In New Jersey, many casinos offering sports betting in Atlantic City already have moved away from the pari-mutuel betting model. It will be interesting to see if this trend continues, and how a horse racing industry that’s so reliant on gambling revenue evolves to keep up.
What does this mean for you?
If you’re a fan of horse racing who happens to struggle with a gambling problem, any expansion in betting opportunities and the potential to win greater amounts of money presents a challenge. The Kentucky Derby is the first race in the Triple Crown series and only the beginning of the mainstream U.S. racing season.
If you need assistance navigating this potentially rocky territory, remember you can always turn to 800-GAMBLER as a resource and support system. Call our helpline anytime and let us help you enjoy race day in a healthy way.