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New Jersey is one of only two states in which fixed-odds betting on horseracing is available, but gamblers have been slow to embrace the bet type ever since the first fixed-odds wagers were accepted three years ago at Monmouth Park Racetrack.
Despite the early struggles, Dennis Drazin, who owns the racetrack in Oceanport, New Jersey, still believes that legalizing fixed-odds horseracing betting will benefit the state’s racing industry, especially by categorizing these types of wagers as a horse bet and not a sports bet.
“The reason why we went for the New Jersey Division of Gaming Enforcement [DGE] as a regulator of fixed-odds betting) was logical … because the ultimate vision is the parlay of horseracing into sports betting,” Drazen said during the Gaming Law, Compliance, and Integrity Bootcamp held on March 3 and 4 at Seton Hall Law School in Newark.
The DGE regulates New Jersey’s sports-betting market, as well as land-based casinos and online gaming.
“By way of example, a pick four on the Haskell Stakes, you could be three legs of the race into a ball game that is taking place that night,” he told attendees on March 3 during a panel discussion on account wagering in New Jersey.
Governor Phil Murphy, a Democrat, signed a bill to legalize fixed-odds wagering on horse races into law in August 2021, two months after it passed the state legislature.
Regulations governing fixed-odds wagering were adopted on an emergency basis in November by the DGE, which was granted primary regulatory authority instead of the New Jersey Racing Commission.
Drazen was joined on the panel by Sara Ben-David, acting executive director of the New Jersey Racing Commission, Melanie Frank, vice president and deputy counsel with the New York Racing Association, and Bill Pascrell III, a partner with Princeton Public Affairs Group.
Until 1927, all American horseracing was fixed-odds, Pascrell said, but that changed when the French pari-mutuel tote system was adopted by U.S. racetracks and it has been in place ever since.
Colorado is the only other state that regulates fixed-odds betting on horse races, but it does so under a different system.
“In Colorado, they took most of our regulatory regime, but they are interpreting it as a sports bet, which I think is kind of weird,” Pascrell said. “The reason we don’t want it as a sports bet is because of the massive taxes.”
The Colorado Limited Gaming Control Commission authorized fixed-odds betting on racing in late 2023. Fixed-odds bets on horse races in Colorado are available on bet365’s sports-betting app, so gamblers in the state have already been able to build parlays combining both horse races and other sports.
New Jersey sports-betting revenue is taxed at either 9.75 percent or 14.25 percent, while Colorado taxes bets at 10 percent, along with a 0.25 percent federal excise tax on each wager.
Other states that may consider a fixed-odds sports-betting bill are New York and Louisiana. Last month, West Virginia took a step toward modernizing its racing industry with a bill proposing to legalize fixed-odds betting on both horse and greyhound racing.
The introduction of wagering on horses in a fixed-odds format is not expected to replace or reduce pari-mutuel, but supporters argue it will put horseracing in front of sports bettors.
“It does not cannibalize the tote. There is no proof of that,” Pascrell said. “What you have to understand, horseracing with the pari-mutuel tote system is a bit antiquated.”
Under the pari-mutuel system at U.S. tracks, odds can fluctuate after a bet is placed and even before a race is finished.
Fixed-odds, on the other hand, do not allow any changes after a bet is made so bettors know how much they are set to win at the time of placing the wager.
“So, we believe that fixed odds which run parallel, as it does in his state and Colorado, with the tote system, is a complement to it,” Pascrell said.
The U.S. racing industry has experienced a steep decline over the last two decades with the number of tracks declining from more than 200 to fewer than 100 nationwide. In December, the closure of Freehold Raceway left the Meadowlands as the only harness racing track in New Jersey.
Pascrell admitted that fixed-odds was “not the panacea, not bulletproof but a great complement that helps operators, helps purses, and hopefully will help the rich tradition of American horseracing”.
