Amid the widespread sports betting build-up, the horse racing industry in the US continues to make a massive impression behind the scenes. As legal sportsbooks have proliferated in the country and as more states regulate their markets, fixed odds horse race wagering has become a hot topic.
So much so that DraftKings in conjunction with Churchill Downs Incorporated are teaming up to introduce a new pari-mutuel betting on horse races product. This new partnership will allow the 2 brands to take advantage of the market which still has a lot of untapped potential.
Under the terms of the deal, TwinSpires, which is a subsidiary of Churchill Downs will supply advance deposit betting technology to DraftKings. Draftkings, on the other hand, will launch a new horse racing app titled DK Horse that will allow lovers of horse racing to place their wagers on the standalone app.
Churchill Downs will also provide DraftKings with pari-mutuel betting rights to horse racing content that is under the control of Churchill Downs, which includes content from the Kentucky Derby, as well as the Kentucky Oaks. Churchill Downs will also secure additional horse racing content that will be populated on the new DK Horse app.
For now, the new DK Horse app is expected to remain separate from DraftKings already well-established sports betting product. However, DraftKings has plans to integrate within the DraftKings suite later this year. The DK Horse app will first launch in 21 states and is expected to be up and running before the 149th edition of the Kentucky Derby, which will kick off in May 2023.
The brand new DK Horse app will allow DraftKings to engage with the growing horse racing market while engaging with pari-mutuel horse betting. This will also be an excellent opportunity for DraftKings to attract new customers via marquee horse racing events and tournaments.
Horse racing betting activity is the highest it has been in years
For decades, pundits in the horse racing industry have been predicting the demise of horse racing in modern times. However, the exact opposite appears to be happening. Not only have purse sizes grown tremendously over the last few years, but so has the combined betting handle.
Just take a look at the numbers. As per the recent data shared by Equibase, in 2022, the horse racing industry in the country generated its largest yearly betting handle numbers since 2009. In 2021, the Thoroughbred racing association recorded considerable boosts in revenue handles totaling an excess of $12 billion.
Plus, last year in July, the Horse Racing Integrity and Safety Act was made into law. Based on industry experts, the Horse Racing Integrity and Safety Act is exactly what the industry has been waiting for to heighten safety measures and improve industry standards, which had been dropping for years before the Safety Act was ratified.
The Safety Act has been designed to make several valued adjustments to the industry. For instance, the Act will see that the testing of drugs is moved away from law enforcement agencies and will instead be controlled by a centralized program. This process is aimed at making the drug testing process more homogenous than it is currently.
The history of the horse racing market in the country goes back centuries. As such, introducing these much-needed changes is exactly what the market needs to catch up and modernize. Indeed, the horse racing industry has a deep economic impact that cannot be understated.
Horse race tracks in the country alone clear close to $3 billion in revenue each year. Most tracks also employ hundreds of thousands of people. Plus, horse racing enthusiasts bet approximately $11 billion each year and this number is expected to balloon in 2023 with the legalization of fixed odds bets.
The debut of the legal fixed-odds horse racing market has been a massive help to the industry. In August 2021, Senate Bill S3090 in New Jersey was signed into law thus legalizing fixed odds betting in New Jersey. Based on the fixed odds betting law in Garden State, 50% of all the profits generated from fixed odds are re-directed to the racing industry.
In New Jersey, fixed odds wagers on horse races are offered thanks to a collaboration between the New Jersey Thoroughbred Horsemen’s Association, Darby Development, and BetMakers Technology Group. Since May 2022, sports betting and racing have been placing both pari-mutuel and fixed odds bets on horse races at Darby Development’s Monmouth Park through the different self-service terminals located all over the track.
The initial rollout of fixed odds betting in New Jersey was complemented with a new website and mobile app that was powered by both Equibase and BetMakers. BetMakers also has a fixed odds betting app integrated within its sportsbook, as well as out-of-state tracks that are controlled by the Global Racing Network division.
Since its legalization, all relevant stakeholders have been benefiting from the fixed odds market. This includes the betting operators, the horsemen, as well as the punters themselves. Thanks to New Jersey’s rollout model, the rest of the country now has a blueprint that it can follow.
Colorado is following New Jersey’s steps. Last year in March the Colorado Limited Gaming Control Commission approved adjusting the state’s sports betting laws to pave way for an 18-month trial run of fixed-odds wagering on horse and greyhound racing. As such, Colorado and New Jersey still remain the only 2 states in the country that permit fixed-odds bets on horse and greyhound racing as an alternative to the conventional pari-mutuel model.
As advancements in the horse racing industry continue to be made, 2023 will no doubt be a great year for the horse racing sector. The punters’ betting funds continue to support the growth of the market and as a new era for the US Thoroughbred racing kicks off, the horse racing sector has never looked brighter. The legalization of fixed odds betting has certainly helped to modernize the market and will no doubt help to attract even more younger supporters.