A pilot project to introduce fixed-odds wagering to Colorado horse racing has received approval for a two-year extension.
Earlier this month, members of the Colorado Limited Gaming Control Commission granted the additional time, which supporters say is necessary to determine whether the product can develop a new revenue stream for the state’s racing industry and attract new fans to the sport. The extension comes as the initial 18-month timeframe was set to expire.
Much of the initial time on the project was spent working with representatives from Arapahoe Park, Colorado’s only track, and the state’s horsemen, Michele Fischer, vice president of SIS Content Services, told commissioners. SIS works with tracks worldwide to get their races available for wagering at sports and race books.
By the time all parties got on board, the pilot had only a few months left. Fischer said that would not be enough time to get any Colorado sportsbooks up and running with the content.
Only In New Jersey, For Now
While fixed odds wagering on horse racing is popular around the world, it’s a relatively new endeavor for U.S. tracks. Currently, fixed-odds wagering is just in New Jersey, where Monmouth Park operates an online site that includes odds for its races and select other tracks, including Tampa Bay Downs and Penn National Race Course — Penn National is owned by PENN Entertainment, which just launched ESPN BET Colorado. Efforts to pass fixed-odds legislation in Louisiana died in that state’s legislature earlier this year.
A key concern about fixed-odds wagering in the U.S. has been the acceptance of horse owners and trainers. In pari-mutuel wagering, tracks will set aside a portion of the betting fund to cover purses and administrative costs. That money is called the takeout, and the amount can be 15% or higher, depending on the type of wager.
There is no takeout in fixed-odds wagering, and hold rates are smaller depending on the odds given. Horse owners and trainers in some states have raised concerns that fixed-odds wagering could cannibalize pari-mutuel pools. Fischer told commissioners that pari-mutuel wagering, though, is on the decline in the U.S. Last month, October wagering was down 9% from last year, and for the year, it’s down 5%.
“Whether this is passed or not, horse racing has a big problem,” she said. “And so, hopefully, what we’re doing will help horse racing in Colorado.”
Colorado Sportsbooks Interested
Colorado’s fixed-odds product will work differently than New Jersey’s. Instead of being available at just one site, Fischer said any licensed Colorado sports betting operator can participate. She added one sportsbook is ready to launch, and others were waiting based on the outcome of the meeting.
Fixed-odds supporters say having races available directly on Colorado sports betting apps will make it easier to attract new fans.
“Folks that wager on a sportsbook — everything is fixed odds on a sportsbook — those new casual players, they just don’t want to bet on pari-mutuel wagering because the odds change,” she explained.
Under the rules of the pilot, either the horsemen or the track can put an end to the project. However, Fischer said she does not anticipate that happening. A lobbyist for Bally’s Corp., which owns Arapahoe Park, endorsed the extension at the meeting.
“Bally’s appreciates the Colorado Limited Gaming Control Commission’s ongoing efforts to modernize rules that allow the industry to adapt to constantly changing market conditions, all while ensuring fair treatment of industry stakeholders and rigorous consumer protections for all Coloradans,” Jake Zambrano said. “If the pilot program has expanded, Bally’s intends to participate by partnering with proven operators in the fixed-odds horse racing space.”