National HBPA Conference Panel Calls Fixed Odds “The Future of Horse Racing Wagering”

Pingpong, anyone? How about horse racing instead?

Dave Basler sees betting on table tennis in Asia and envisions it being replaced with horse racing in America’s burgeoning sports books.

“We can fill that void a lot of times during the day so that they don’t have to play table tennis from China or cricket from Australia — things that people have no idea about,” Basler, the executive director of the Ohio HBPA, said Thursday during a morning session of the National HBPA Conference at Oaklawn Racing Casino Resort. “That’s not just attractive to sports books, that’s attractive to horsemen and racetracks for the opportunity to increase our revenue.”

Eric Hamelback, CEO of the National Horsemen’s Benevolent & Protective Association, at the 2018 conference cautioned horsemen that sports wagering was coming and the racing industry needed to be prepared. Shortly thereafter, the U.S. Supreme Court struct down the ban on sports wagering. Thirty states now have passed such legislation, including Arkansas.

Now, he says the U.S. racing industry must turn its attention to implementing fixed odds. That’s a divergence from the pari-mutuel industry that currently is the linchpin of American horse racing, while sports betting is based on fixed odds that allow players to lock into a price in advance of an event.

“It’s here, it’s on us,” Hamelback said. “Now we need to really move and pivot and focus on how to deal with it.”

He said later, “I still can’t get my head around how much money is wagered on pingpong. Pingpong!”

How much? In fact, $63.5 million was bet on table tennis in 2020 in Colorado, a number that mushroomed to $101.6 million last year, according to Colorado Department of Revenue-Division of Gaming.

The panel also included Louisiana HBPA executive director Ed Fenasci. Sports betting began in Louisiana last fall, with an online component starting in January. Basler’s home state of Ohio is scheduled to start sports wagering Jan. 1, 2023 after passing the enabling legislation in December.

“Pari-mutuel wagering is not going to be in the sports books,” Basler said. “Fixed-odds wagering will be. So we need to take advantage of that ability to bring in customers and get our product in front of millions and millions of potential new fans.”

Fenasci said sports books have the ability to be more creative than pari-mutuel wagering, including with parlay bets.

“Who knows what is going to become the popular wager, right?” he said. “Two grays will win today at the Fair Grounds. This trainer is going to win a race and this jockey will win two races. You can marry a hockey game with the fifth race at the Fair Grounds and marry that to maybe a college football game betting on LSU.

“This is the future of horse-race wagering in the United States. Not this year, five years from now. This model of sports book wagering has competed very well with other forms of gaming. The parimutuel model has been eroding over the last 30 years. It’s not standing the test of time when other forms of gaming come in and capture the attention of the customer base.”

Fenasci said the apps for betting online with sports books is “the type of interaction that is going to appeal to 20- and 30-year olds…. We want shelf space on these new e-commerce sites. We want horse racing to be there prominently displayed for people who may not have had the opportunity in the past to consume that product.”

Basler said fixed odds could make “an unbettable race now a bettable race.”

“There’s a graded-stakes race with six horses and a 3-5 shot in there,” he said. “There’s a good chance the bookmaker will take the 3-5 shot out of the pool entirely and price everybody else as if that horse weren’t in the race. There are a lot of things that we don’t have the ability in parimutuel pools that fixed odds can offer and perhaps enhance our product.”

Former Ladbrokes executive Richard Ames is CEO of British-based Sports Information Services and president of its U.S. subsidiary SIS Content Services Inc., both of which provide content and production services to the betting industry. He said Australian racing went from being overwhelmingly parimutuel to a decade later seeing “probably 55, 60 percent” of wagering through fixed odds.

“We know consumers like the idea if they place a bet at 6-1, that’s what they’re going to get,” he said.

Panel moderator Michele Fischer, an industry consultant who spent years working for the tote-betting company Sportech Racing and now serves as vice president of SIS’ American operation, said some horsemen are surprised to hear that U.S. races already are being distributed in overseas sports books. While the Stronach Group-owned GWS is the largest exporter of U.S. content, she said SIS is the world’s largest horse-racing content distributor in the world. It is fairly new to the American market, however.

SIS currently distributes on a 24-hour cycle more than 30,000 horse races and 38,000 greyhound races a year at 118 tracks in 16 countries.

“The sports book wants to have a volume of content,” Ames said. “They want to have access to thousands of races.”

He said there are different models on how racetracks and horsemen are compensated for having their races in sports books, including a fixed fee, revenue-sharing or getting a percentage of betting proceeds.

In a subsequent interview, Hamelback said it’s important for both horsemen and domestic sports books to understand that, even if it’s not parimutuel, bets on horse racing are still covered by the Interstate Horse Racing Act of 1978. That law gives horsemen the right to say where their race signal goes in the United States. It does not apply to betting on U.S. races in other countries.

“A wager on horse racing is subject to the Interstate Horse Racing Act,” Hamelback said. “It doesn’t say a parimutuel wager. Doesn’t say a fixed-odds wager. Doesn’t say anything other than a wager.”

Hamelback and others said to expect some cannibalization of existing parimutuel wagering but that the expansion of the market should more than compensate as far as revenue to horsemen.

“Why should we consider this?” Fischer asked rhetorically. “Horse racing had a fabulous year in terms of handle in 2021, the highest it had been since 2009. In some states, we have a false comfort. Purses are very high – you look at Kentucky with HHR (historical horse racing) booming there. It’s doing well in Virginia. But when you look at the big picture across the United States, the simple answer is horse racing is not self-sufficient. We’re using alternative gaming to support our purses.

“This is an opportunity to become more self-sufficient, because we’re betting on horse racing — not betting on a VLT machine or HHR machine.”

The conference continued Friday, concluding Saturday morning with a meeting of the full board of the National HBPA. — Jennie Rees

Clabes: Engage with lawmakers year-round

Establishing, fostering and continuing lines of communication with lawmakers on the local, state and federal level is essential for horsemen looking to develop sustainable relationships with legislators, panelists told attendees Thursday during the second day of the National HBPA Conference in Hot Springs, Ark.

“Sometimes those no-ask meetings (with legislators) are the most important things you can do,” said Angel Moore, managing member of Moore Firm of Charleston, PLLC, which represents Mountaineer Park HBPA.

Moore’s sentiments were echoed by her two fellow panelists and the moderator of the discussion “Interactions with Political Representation” Thursday at Oaklawn Park. Moore was joined on the panel by Joe Clabes of Clabes and Associates, which represents the Kentucky HBPA, and Judge Bill Walmsley, president of the Arkansas HBPA and a member of the Arkansas Senate from 1970 to 1982. Jennie Rees, a five-time Eclipse Award-winning Turf writer and currently communications specialist for the Kentucky and National HBPA, moderated the discussion.

“It’s important that you are engaging (lawmakers) year-round,” Clabes said, adding that maintaining those lines of communication could be crucial at times of need.

The panel emphasized the importance of horsemen doing their part by interacting with legislators, especially their own representatives.

Walmsley, who sponsored approximately 60 pieces of legislation during his years in the Arkansas Senate and was appointed to the Arkansas Court of Appeals for a two-year term in 2012, also emphasized the importance of timely political donations.

“You waste your money if you give it to them after they’ve won,” Walmsley said, remembering his own story of receiving a $1,000 check after he’d won re-election. He later added that donations of time and effort are almost as important as cash.

“Not only contribute, but also get out and help get (a candidate) elected,” he said when asked by Rees how to help a candidate that looks like a certainty at the ballot box.

Walmsley also cautioned against mass mailing or flooding legislators with emails to support a cause or in an attempt to write new laws. He said a couple dozen of personally written messages are more effective.

“Don’t make me go through 5,000 of the same emails … saying the same thing,” Walmsley said. “I’m not going to pay a whole lot of attention to it.” — Tom Law

Arkansas’ Walmsley feted as “Living Legend”

Bill Walmsley, the Arkansas HBPA president and former National HBPA president, was honored Thursday as an HBPA Living Legend. Walmsley was interviewed by another HBPA stalwart, Washington HBPA executive director Mary Ann O’Connell, about lessons learned during his long tenure.

O’Connell asked how the national horsemen can get more respect and “not just a seat at the table but a voice at the table?”

Said Walmsley: “There’s a certain element within this industry that we’re never going to get the respect that we’d like to have. The Jockey Club types are simply going to look down on us because they regard trainers as employees and not real participants in this industry. They philosophically have a disagreement. And if you’re any farther west than Keeneland, you’re a cowboy in racing. You’re not going to change those positions. I think what we do is go ahead and make our position. When they’ve done something like HISA (Horseracing Interstate Integrity & Safety Act), we go after them the place we can go after them: like in court. We’re doing it the proper way, and we go with that.

“Beyond that, having people who are professional – Eric Hamelback – being your face helps a whole lot. This organization has grown up a whole lot.”

In other presentations Thursday: Executive director Pat Thompson provided an update on the National Racing Compact that allows horsemen the ability to get quickly licensed in 26 racing jurisdictions; National HBPA general counsel Peter Ecabert advised on safeguards to keep affiliates healthy and financially sound; and Louisiana HBPA executive director Ed Fenasci discussed that affiliates medical benefit plan. — Jennie Rees

Note: National HBPA CEO Eric Hamelback is a featured guest on Friday’s final show of Kentucky Racing Spotlight, presented by the Kentucky HBPA, airing on Louisville’s ESPN 680. The show can be heard 6-7 p.m. ET Friday this link. It also will be archived with all past shows at davisinnovation.com/kyracing.

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